A Sustainable Health System
What can we learn from international experience?
Summary of ippr policy seminar 10th April 2006
All developed countries face similar challenges in maintaining health systems
that are affordable, equitable and responsive to public needs and demands. In
this seminar, ippr set out to learn how two other tax-funded systems, Canada
and Sweden, deal with these tensions. These countries were chosen for
several reasons: first, their health services have an iconic status similar to the
NHS and a strong emphasis on equity; second, both countries combine good
health outcomes with health spending that was stable as a proportion of GDP
in the 1990s. Like the UK, spending on health has increased in Sweden and
Canada since 2000. The aims of the seminar were twofold:
*to learn more about the economics and politics of the Canadian and Swedish
health systems and consider what the UK could learn.
* to explore how Canada, Sweden and the UK maintain a sustainable health
system in an age of rising demand and public expectations and the measures
taken to achieve this.
Presentations were made by:
Professor Anders Anell, Director, The Swedish Institute for Health
Economics
Professor Alan Shiell, Senior Health Scholar, Alberta Heritage Foundation
for Medical Research, University of Calgary.
Dr Will Cavendish, Head of the Strategy Unit, Department of Health
These notes summarise the key themes from the discussion, rather than all the
detailed points from the presentations. Slides from Professor Anell’s and
Professor Shiell’s presentations are available to download at www.ippr.org.
These notes represent ippr’s interpretation of the discussions, but not
necessarily ippr’s policy position. The seminar was held under Chatham
House rules and the notes have been structured to represent this.
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This seminar was the second in a series of three for the ippr project Great
Expectations: Towards a Sustainable Health System Beyond 2008. The project will
report in Autumn 2006.
Great Expectations: What can we learn from Sweden?
Professor Anders Anell, Director, The Swedish Institute for Health
Economics.
See slides
Context- Distributive justice was the most important goal when the Swedish
healthcare system was created. The 1982 Health Care Act incorporates equal
access to services based on need and expresses a vision of equal health for all.
In Sweden, there are three independent levels of government – the national
government, the county councils and the municipalities – and all three have
some responsibility for the healthcare system. There are 21 county councils
responsible for hospitals and primary care services and 289 municipalities
responsible for care of older people.
A Sustainable Health System: What can be learnt from Canada?
Professor Alan Shiell, Professor and AHFMR Senior Health Scholar,
University of Calgary
See slides
Context - The Canada Health Act 1984 upholds five principles:
comprehensiveness – (the provision of “medically necessary” services),
universality, public administration, portability and accessibility. However the
phrase “medically necessary” has created uncertainty: different
interpretations among the thirteen provinces mean there are variations in
coverage on dentistry, eye care and long-term care.
Under the auspices of the Act, Canadian provinces receive transfer payments
from central government to maintain public health insurance plans for
citizens. However, there are some variations between provinces, for example
Alberta and Ontario have additional social insurance.
A Sustainable Health System: the English Patient
Will Cavendish, Head of Strategy, Department of Health
In his response, Dr Cavendish summarised the principle challenges facing the
NHS in achieving medium-term financial sustainability, the current approach
to achieving sustainability, and how this relates to the common challenges
that all health systems face. The Government has increased NHS spending to
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historically unprecedented levels and by 2007-8 the NHS is likely to be
spending at least the European average share of GDP on health. This has
brought improvements: 100 new hospitals since 1997, a 20% increase in
elective admissions and a 20% increase in doctors and nurses. But health costs
are running ahead of the economy. The main pressures on spending are
workforce pay and rising drug costs. All developed countries face these
pressures. The OECD predicts that total spending on health and long-term
care will rise across OECD countries by 3.5 - 6% points. In the UK the 2007
Comprehensive Spending Review will determine departmental allocations for
2008-9, 2009-10, 2010-11. Future pressures on finances will come from an
ageing population (rise in death rates), chronic disease and current life-style
trends that exacerbate chronic illness.
There is much that the government can do and is doing to ensure the
medium-term financial sustainability of the NHS. In particular: (1) changing
the balance of the healthcare system to promote better health and prevention.
This includes better chronic disease management and moving care closer to
home. (2) Secondly, there is a stronger focus on efficiency and productivity.
The challenges are to remove inappropriate variation in surgical intervention
thresholds, improve disease management and prevent trusts in financial
difficulty from increasing volume when extra activity does not reflect need.
Currently, there are large and inexplicable variations in costs for procedures,
for example the HealthCare Commission calculates that 74,000 operations
could be moved to day surgery where there exists large variation in practice.
(3) Also, sustainable cost reduction will be supported by modern IT and good
financial management.
The health reform programme is designed exactly to achieve these goals. The
main components are payment by results, patient choice and plurality of
providers, practice based commissioning, integrated care and provider
networks and better skill mix among medical workforce.
Informing this, the NHS can learn a lot from other OECD health systems
introducing similar changes. In particular, the NHS can learn from
prevention and health promotion, models of chronic disease management,
tariff systems, the balance between local and national responsibility and
improving efficiency.
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Overview - Some Common Issues
As several participants observed, the question of how to achieve a sustainable
health system is not a new one. In his presentation, Professor Shiell cited
Albert Weale’s “inconsistent triad” and the tensions inherent in trying to
achieve comprehensive coverage, universal and equal access free at the point
of care, and high quality care. He quoted Weale:”perhaps we can have only a
comprehensive service of high quality, but not one available to all. Or a
comprehensive service freely available to all, but not of high quality. Or a
high quality service freely available to all, but not comprehensive” (Weale,
BMJ 1998 316).
All health systems have problems. In Sweden several issues were identified:
weak primary care and an inequitable distribution of primary care services,
variations across regions in access to drugs. Also in Sweden, there is much
discussion about how to integrate care to improve services for older people.
In Canada, there are problems with low income groups’ access to services.
International comparisons show that Canada is less equitable than the UK, as
there are more people who fail to get medical services and prescription
medicines. However, Canada was more equitable than Australia and the US.
However, participants felt improvements had been made on a number of
fronts. In all three countries, the scope of the healthcare system is expanding:
there is access to new treatments and certain groups are receiving more care.
Yet the striking point is that in all countries, the public are sceptical about
improvements. In the UK, there has been much discussion of the “I’ve been
lucky” syndrome, where people rate their own experience of the NHS
favourably but think the health service in its entirety is getting worse. This
experience is mirrored in Sweden and Canada. For instance, in Sweden 42%
of people think that healthcare services are worse than ten years ago,
compared to 16% people who thought they are better. In Canada, between
one fifth and one quarter of all respondents believe the system should be
“completely rebuilt”. However, it was argued that these figures need to be
viewed alongside people’s positive experiences of using the healthcare
service. There remains support for the principals of Canadian Medicare.
There was some discussion about the nature of the problems. One participant
observed that the biggest challenges were political, i.e. the challenge of
maintaining popular support. The work of the political economist Robert
Evans was cited. Evans has suggested that the biggest challenge is a political
one that arises from vested interests arguing that the system is in crisis.
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There is scope to make health systems more efficient. However making
savings does not address the fundamental questions around making trade
offs between competing priorities.
Just as all countries face common challenges, all countries are using the same
levers of reform, for example, developing preventative services, efficiency
reforms, purchaser provider split and using tariff systems. However, it was
argued that health systems are shaped as much (if not more) by external
events than conscious efforts at reform. In both Sweden and Canada, the main
driver to cost containment had been the recession of the 1990s rather than
political reform. For example, in Sweden, the recession drove significant
improvements in acute care bed use in the 1990s. It was argued that political
rhetoric is as important as the actual changes introduced by policymakers.
Participants discussed the influence of electoral cycles.
Drugs
There was some discussion about the cost of new drugs. One participant
asked ‘whether drugs are always a problem (for sustainability) and what
could be done?’ There were various responses from round the table. Drugs
are both a problem and a solution and the success of drugs (e.g. Statins)
encourages a desire to go further and faster. However, there is considerable
capacity for improving how we use drugs, for example wasted medicine. In
Sweden, there is a Pharmaceutical Benefits Board to address issues around
drugs and costs. However, this focuses too much on drug expenditure and
too little on the benefits of drugs. Interestingly, when the board made the
decision not to subsidise some drugs, there was no debate in the media. It was
only when local politicians discussed the issues that a public debate followed.
Another response considered that health systems lack the institutional
capacity for weighing up different kinds of evidence about interventions.
Priorities are distorted because of the evidence base, so drugs get subsidised
over preventative interventions. According to the speaker, this has happened
in Australia, where the Government undertakes economic evaluations of
drugs, but not preventative interventions.
Prevention
There was some discussion on the effectiveness of prevention and how far
prevention would ‘save’ health services (i.e. guarantee their future
sustainability). Various participants commented on the importance of
differentiating between health promotion and primary and secondary
prevention. It was suggested that better management of chronic disease
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would have a significant impact in improving health and making better use of
resources. However, several people around the table expressed the view that
“prevention” in whatever form will not reduce costs to health services
substantially.
Safety
One participant raised the issue of safety and suggested the group needed to
move beyond the assumption that safety is an implicit part of quality debate.
It was argued that if the public knew of NHS safety statistics, there would be
greater demand “to invest in the safety infrastructure”. Participants agreed
there was a need for an open national debate on safety
Other participants pointed out that there is no evidence that the NHS has a
worse safety record than other countries or that safety has got worse. Over the
last ten to fifteen years, the evidence has improved and there is much greater
awareness of the problem. There was some discussion about how to address
the problem. It was suggested that airlines present a useful comparison. The
aviation industry achieves high safety levels due to a policy of blame free
investigation of accidents. At present, health system procedures discourage
people from reporting system level errors. It was suggested that the big
challenge was putting in place regimes where quality is at the centre. It was
an error to think the Department of Health could prescribe safety from the
centre. Instead patients, the public and political pressure will help to drive
change. This is part of the “evidence based revolution” that is taking place in
healthcare.
Decentralisation
In his presentation, Anders Anell said that the major difference between the
UK and Sweden is decentralisation. The Swedish healthcare system is more
decentralised, which is a result of policy trends in the 1980s and 90s. This
allows for some significant variations; for example in some country councils
more than 50% hospitals are in private ownership, but in others there are
almost none. However, it was anticipated that Scandinavian countries would
become more centralised, partly due to public concern about variations in
access to drugs between different regions. At the end of the year, it is likely
councils would be reorganised into larger regions. In Canada,
decentralisation was also a trend of the 1990s, flowing from the belief that
decentralisation made services closer to the people.
It was suggested that one of the advantages of a decentralised system is the
diffusion of blame when things go wrong. That is why so many countries
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found it to be an attractive policy option. However, political leaders have to
reconcile inconsistent attitudes among the public to decentralisation. As one
participant commented “everyone wants devolution, provided they get what
they want”. People understand their entitlements to services according to
what people elsewhere in the country get. Again these are long-standing
issues for all health systems, and perhaps, they have become more acute as
the speed of information has increased.
Decentralisation is especially problematic in relation to access to drugs. In
Sweden, there is an ongoing public debate about variation in access to
treatment of oncology drugs, such as Herceptin. The Stockholm region spends
21.44 Swedish Krona (SEK) per capita on five new oncology drugs compared
to 16.08 SEK in the Western Region. This reflects different priority setting on a
regional basis. However these priorities are not transparent and therefore not
accepted by the general population. However, there is no evidence that
treatment outcomes are different. The media make the link between money
and successful outcomes. Likewise, losing beds is seen as a disaster, but there
is little debate about health outcomes. In Sweden, it is likely that there will be
increased use of national guidelines and less discretion for decision makers at
the local level.
Among contributors, there was recognition that there is a fundamental
tension between national standards and local decision-making in all health
system and that no one had a clear account as to how to reconcile these
tensions. However, it was observed that tensions have been exacerbated,
when national politicians do not support local decision-makers in setting
priorities. As one participant observed “there will always be a market for
politicians who have another solution”.
The discussion also considered the role of local government in relation to the
NHS. In particular, there was consideration of the vision put forward in the
White Paper, Our Health, Our Care, Our Say and its emphasis on a local
strategy for health and wellbeing agreed by the director for public health and
the director for adult social care. Participants raised questions about how this
local strategy would work: who are the directors accountable to? There was
some discussion about the role of local government and whether it was robust
enough to take controversial decisions about health services. Some put
forward the view that local politicians have a defensive reflex when it comes
to health and are less likely to manage people’s demands as they might in
other areas.
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Democratic Debate
Throughout the session, there was discussion about how explicit health
systems should be in setting priorities. Some argued that the UK system has
never been explicit about spending priorities, because democratic
mechanisms have rendered being explicit unnecessary. But, there was interest
in engaging the public in priority setting. As one person asked: “is there a
middle way between ‘a fudge’ and an explicit wish list of services?”
This led to some discussion on drawing up lists of core service. There was
scepticism this could be done. As various people commented, this has been
tried many times before and there are very few obvious procedures to rule
out (e.g. tattoo removal). These procedures are marginal to the budget. There
was some agreement that there will remain an element of greyness within the
system. However, this greyness does not mean that the decision making
process should be hidden from the public. There should be ways to consult
the public and build on existing public awareness of the limits to provision.
Participants considered that it was essential to ensure that public involvement
was done well and cited examples where it had been tacked on as an
afterthought, for example public involvement in foundation trusts.
Some participants also suggested it was important not to overlook effective
public engagement in health issues, for example the role of specialist bodies
such as the Human Fertilisation and Embryology Authority and success in
getting out the ‘five a day’ message. The imperfect way that health debates
unfold is part of our democratic discussion and should not be construed as a
crisis.
Reform Agenda
The seminar closed with a discussion on the reform agenda. It was suggested
that the DH is attempting to do too much too quickly and in the process
ratcheting up expectations about what can be achieved on a number of fronts.
Is there a contingency plan and what reforms will the Department pursue as
priorities or decide to go slow on? One participant suggested that there needs
to be more analysis of the capacity of the system to absorb changes.
Another participant suggested that Ireland was an example of where reform
had happened quickly on many fronts and national politicians had failed to
achieve some of the targets that were set.
The ‘deal’ for health was the NHS got more money for quick reform. Viewed
from another angle, it is possible to say the reform process has been too slow,
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for example the development of Foundation Trusts. The current reform
programme will help to build a more sustainable system.
Acknowledgements
ippr is grateful to all participants who attended the seminar and would like to
extend special thanks to Anders Anell, Will Cavendish and Alan Shiell for
their time and effort.
We would also like to thank our funders for their generous support in making
this work possible: GlaxoSmithKline, Merck Sharpe & Dohme, the Proprietary
Association of Great Britain, and Wyeth.
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