Derek Bang, practice leader of health care advisory services at the Crowe Horwath LLP accounting firm in Indianapolis, spent a week in March studying health care in the United Kingdom, especially its universal health care program. He was surprised by the “daily barrage of criticism” he heard about the National Health Service, but also found that the United Kingdom and United States face very similar issues when it comes to constraining growth in health care costs. He wrote an article about his experience for the Healthcare Financial Management Association.
IBJ: You note in your article that cost growth is unsustainable in both the United Kingdom and the United States. But since the United Kingdom spends roughly half as much of its gross domestic product on health care as the United States, won’t the United Kingdom be able to absorb high cost growth longer?
A: I don’t think they can. In fact, they were much more direct about controlling those costs than we have been to date in the United States. In the United Kingdom, it’s a much more immediate pain when costs grow because it’s funded through tax [compared with the mix of tax-based, employer-based and individual funding in the United States]. Over there, if costs go up, they only have one option: either raise taxes or hold costs.
IBJ: If the United States immediately adopted national health care like the United Kingdom, would the United States see a big drop in health care spending?
A: It depends. You would also have to take along the same assumption that we were willing to give up and accept a potentially lower level of service than we get today. If we adopted their model—which includes waiting 18 weeks for elective surgery or four to six weeks for pap smear results, or [knowing] if you have a certain cancer and you’re above a certain age, you’re just going to die—it would be a step backward. ... The level of amenities is very different. As a people, here in the United States, I don’t sense that we’re willing to make that kind of sacrifice.
IBJ: In your article, you propose three main policy solutions to rapid cost growth: pay doctors and hospitals for results, achieve greater efficiency through electronic medical records, and encourage patient lifestyle changes. Which of those is the most feasible and therefore most likely to make a big impact quickly?
A: If I had to choose one, which is difficult, I would have to say, pay for performance. But when I say quick, I’m thinking a decade. There are so many ingrained systems that we have in our health care delivery environment today. The ability to tweak the system without causing significant trauma probably exists more there than anywhere else. But we’ll probably need all those things together to really bend the curve.