Update 9thJuly 2014: Dr Bohumil Drasar writing in The Times Letters says:
The administration of the NHS alone costs as much as a new high-speed railway, every year
Sir, We do need a proper conversation on health policy (letter, July 7). It must include administrative costs, the largest item of NHS expenditure. In 2010 it was estimated that 14 per cent of the NHS budget, about £15.4 billion, went on administration. This was probably an underestimate. The exact costs are hard to calculate — how, for example, does one cost the admin activities by frontline clinical staff — but this should be included.
For 2014 an estimate of £20 billion would be credible. To put it another way, the cost of managing the NHS for a year is similar to the projected cost of building the HS2 rail link from London to Birmingham or more than half the total education budget. This just seems wrong.
Bohumil S Drasar
Emeritus Professor of Bacteriology
Michael McCarthy writing in the BMJ (Health system report ranks UK first, US last (BMJ 2014;348:g4080)) reports his view of a report by The Commonwealth Fund. The “mission statement” of the fund reveals it’s affiliations: “The mission of The Commonwealth Fund is to promote a high-performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults. ”
New York, NY, June 16, 2014—Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives, according to a new Commonwealth Fund report. The other countries included in the study were Australia, Canada, France, Germany, the Netherlands, New Zealand Norway, Sweden Switzerland, and the United Kingdom. While there is room for improvement in every country, the U.S. stands out for having the highest costs and lowest performance—the U.S. spent $8,508 per person on health care in 2011, compared with $3,406 in the United Kingdom, which ranked first overall….
This report is an interesting political statement, and I guess the Commonwealth Fund is funded by the Democratic Party I the US. It does say however, how much they value the NHS and its universality. Mary McCarthy’s comments on the report reveal the complexity of comparisons on this nature, when there is incomplete and non comparable information. (as for Wales and England within the UK).
With relevance to General Practice: “The report said, “The widespread and effective use of health information technology (HIT) in the UK plays a large role in the country’s high score on the chronic care management indicators, as well as its performance on system aspects of preventive care delivery.”
In terms of efficiency the US scored last, spending 17.7% of its gross domestic product (GDP) on healthcare, with 7.1% of that spending going on administrative costs. By comparison, the UK spent 9.4% of its GDP on healthcare, with 3.4% of the spending going on administration.
“Although the UK ranked near or at the top of most measures of health system performance, it ranked second to last for healthy lives. The fact that France—which ranked near the bottom overall—was ranked the highest in healthy lives while the UK came near the bottom, may reflect a lack of comparable cross national health outcomes data, the report noted. “However, the indicators that are available demonstrate the healthcare system to be just one of many factors, including social and economic wellbeing, that influence the health of a nation,” it added.
The report concluded that its findings showed “a consistent relationship between how a country performs in terms of equity and how patients rate other dimensions of performance: the lower the performance score for equity, the lower the performance on other measures. This suggests that, when a country fails to meet the needs of the most vulnerable, it also fails to meet needs for the average citizen.”
NHSreality agrees that our system is better than the US, and also that we are potentially one of the best in the world as we write. What we dispute is the potential of the NHS to remain able to keep at the top of the league tables, even ones created by a pro NHS body! Technological advances and costs mean that the best care is often expensive, and to fund such care we need to ration out the cheaper high volume goods and services. This has the advantage of encouraging autonomy in patients, and bringing reality regarding health into their lives – as they will know what things really cost.
My Welsh Assembly Member, Paul Davies, has kindly asked, in a “freedom of information” request, what the Welsh Government says it’s non clinical overhead is. See the 3.4% claim above, which I suspect applies to England rather than the whole UK. The request was necessary because in the first instance, on direct writing, I was either ignored or asked to break down the individual trusts’ financial reports!
The claims for:
Abertawe Bro Morgannwg – 2.86%, Aneurin Bevan – 5.2%. Betsi Cadwaladr – 5%, Cardiff and Vale – 3%, Cwm Taf – 2.7%, Hywel Dda – 0.97%, Powys – 3.1% (letters available on request)
Which all goes to show that they really don’t know. Aneurin Bevan (the individual not the Trust) in his seminal chapter of In Place of Fear A Free Health Service 1952 Chapter 5 In Place of Fear claims an overhead of 3%. Assuming this was correct, I.T. should have bought overhead down! Only one board (Hywel Dda) seems to have fulfilled this expectation significantly, and his namesake board has the highest overhead of all, and is nearly twice as much. I suspect some independent investigative auditing work would be needed to reveal the truth, and that the figure is really much higher across the board(s) (sic)..
I suspect that Powys, with no hospitals, has a higher number of cleaners than Hywel Dda with 4 hospitals. I suspect Powys to be reasonably correct and all the others to have even higher “reality” overhead… This is a scandal waiting to be investigated properly.