Published: 07/06/2002, Volume II2, No. 5808 Page 11
Healthcare companies are having a tough time in the US, where they are failing to expand their markets.Could that be the real reason they are coming to the UK? Howard Berliner reports from New York Just when American healthcare delivery is thoroughly discredited in the US, it finds a venue in the NHS.
US managed-care companies are making record profits at present - but this is more a reflection of their ability to receive higher insurance premiums from employers than any great efficiency of service provision.
The most common question asked today by those in the health policy field in the US is what comes next - now that managed care has failed either to control costs or improve care?
This is not to say there is nothing of value in the way healthcare is delivered in the US, just that industry is taken in by its own hyperbole and marketing pitches.
The idea that the NHS is considering expanding its capacity by contracting with US firms is not one that has received any attention at home. This is not surprising since few companies would tip off their competitors to what they are doing without having a formal deal in place.
While profit rates are currently quite high for most firms, the depressed economy makes it highly likely that there will be a substantial amount of contraction in the industry, thus the move to find new outlets for business is logical.
In the 1980s, a number of USbased, for-profit hospital chains looked to establish a base in the UK, hoping to capitalise on the growth of private health insurance and the need for elective surgical and diagnostic procedures.
By most accounts, these ventures were not successful and most, if not all, have closed or been sold to other providers.
What would the NHS get by bringing in US firms?
The health industry in the US would certainly claim the advantages would be increased efficiency and effectiveness of service delivery, but most patients would be hardpressed to agree.
Those Americans who have good access to healthcare (those who have high-quality health insurance) would see only high costs, decreasing time spent with doctors, and a substantial amount of duplication caused by lost medical records and insurance forms.
Most doctors would be wary of their relationships with corporate partners and fear incursions into their clinical autonomy. Others might be buoyed by the possibility of financial incentives - owning a piece of the company as a way of making more money.
The US has passed two sets of regulations called the Stark antikickback laws in an attempt to alleviate some of the problems caused by direct ownership. These put major restrictions on the ability of doctors (or close family members) to own diagnostic and treatment facilities to which the clinician could refer patients.
The corporate clinical laboratory with which my personal doctor's practice is associated has changed three times in the past two years as a result of lost test results and generally slow and shoddy performance.
The longed-for computerised laboratory test reporting is a thing of the (distant) future, and office staff are still required to do a substantial amount of manual manipulation in order to get records into correct folders on a timely basis.
While the fax machine may be waning in other industries, lost medical test results are keeping it going in the health sector.
The real problem that comes with the adoption of US medicine is a different orientation towards healthcare.
Not-for-profit hospitals in the US at first ignored the growth of proprietary chains, but soon saw their margins reduced and their paying patients going elsewhere.
While still retaining the structure of voluntary hospitals, the not-for-profits soon began to emulate their rivals (and thinking about margins was just the first step).
They competed for patients through expensive marketing and advertising campaigns, increased the salaries of senior executives while cutting service staff, and began to see themselves as businesses rather than healthcare institutions.
Of course in the US, with so many uninsured and underinsured patients, a concern with money is (seemingly) natural, and this may not be the case in firms working under the aegis of the NHS, where all patients are the same. Yet it is a mistake to set in motion economic incentives and forces and believe that they will not have an impact on the larger health system.
Kaiser is perhaps the best managed-care system in the US. It is well regarded by consumer groups and unions, but it is also one of the few remaining grouppractice models, an approach that has been otherwise rejected by the market.
Managed care organisation Kaiser Permanente is renowned for its use of automated multiphasic screening for all patients and its focus on preventive care, something few other managedcare organisations even attempt.
Perhaps this makes it the ideal candidate for transplantation to the NHS and the system that will cause the least disruption of traditional values. But where Kaiser treads, less reputable firms are bound to follow.
Howard Berliner is professor of health policy and management, Milano Graduate School, New School University, New York.