HBI Deals+Insights / Healthcare Reform

Public healthcare systems – more like oil rigs than tankers

Public healthcare systems are so slow moving that they are often seen as oil tankers, lumbering giants who take forever to turn. But in some ways they look and behave more like oil rigs. They are immoveable.

Item one.  A new book on the effect of the recession on European healthcare systems.  As often as not, the academic authors conclude that the worst recession in seventy years had almost no impact on healthcare provision.  In many ways that is comforting – Europeans are not about to lose access to free healthcare.

But it is also worrying. The recession did not increase the appetite for serious structural reform.  Countries cherry picked the easy stuff (the move to generic pharmaceuticals, or pay cuts or freezes for workers), but generally didn’t meddle further.

Item two. A new report from Lord Carter outlining how the English NHS could save £5bn a year, mainly through better procurement. Is the name oddly familiar?

Yes, indeed!  This is the same Lord Carter who produced a 2008 report on diagnostics suggesting root and branch reform with hospitals pooling lab services. Since then there has been little progress in the UK NHS lab sector.  Depressingly, the Carter’s report on that subject was the third in a decade to examine the problem!

And reports on improving procurement come out even more frequently – about one every two years for the past 30 years.  Again there has been little sign of serious change.

Reforming public healthcare provision is like persuading a unionised factory, which is the only supplier of an item, to change its production technique. The situation is made worse by the fact that the consumer (the patient) thinks the item should only come from that one factory (the public sector). Worse still, the workforce is led by a very high status profession, whose expertise is rarely questioned.

Worse yet, all developed countries have the same problem! So there are very few examples of how to do it differently. We may have to wait ten years while low cost mass market alternatives are launched in Emerging Markets. Mexicans and Indians seem to believe that dialysis can be done for $15 a session. Turkey wants MRIs to cost €20.

My hunch? High quality healthcare can be delivered to our populations for a fraction of the cost we are currently paying in Europe, let alone the USA. And by a fraction I mean half or a quarter.

We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.