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Getting more for their dollar: a comparison of the NHS with California's Kaiser PermanenteCommentary: Funding is not the only factorCommentary: Same price, better careCommentary: Competition made them do it

BMJ 2002; 324 doi: http://dx.doi.org/10.1136/bmj.324.7330.135 (Published 19 January 2002) Cite this as: BMJ 2002;324:135

Abstract

Objective: To compare the costs and performance of the NHS with those of an integrated system for financing and delivery health services (Kaiser Permanente) in California.

Methods: The adjusted costs of the two systems and their performance were compared with respect to inputs, use, access to services, responsiveness, and limited quality indicators.

Results: The per capita costs of the two systems, adjusted for differences in benefits, special activities, population characteristics, and the cost environment, were similar to within 10%. Some aspects of performance differed. In particular, Kaiser members experience more comprehensive and convenient primary care services and much more rapid access to specialist services and hospital admissions. Age adjusted rates of use of acute hospital services in Kaiser were one third of those in the NHS.

Conclusions: The widely held beliefs that the NHS is efficient and that poor performance in certain areas is largely explained by underinvestment are not supported by this analysis. Kaiser achieved better performance at roughly the same cost as the NHS because of integration throughout the system, efficient management of hospital use, the benefits of competition, and greater investment in information technology.

What is already known on this topic

What is already known on this topic Comparisons of healthcare systems in different countries have to be undertaken with great care but can be instructive

The overall healthcare system in the United States is more expensive than the NHS and population health outcomes are no better

The US healthcare system comprises many discrete and unique subsystems, including the health maintenance organisations

What this paper adds

What this paper adds An integrated, non-profit health maintenance organisation in California (Kaiser Permanente), with over six million members, costs about the same as the NHS but performs considerably better

Kaiser's superior performance is mainly in prompt and appropriate diagnosis and treatment

These findings challenge the widely held view that the NHS is efficient and that its inadequacies are mainly due to underinvestment

    Getting more for their dollar: a comparison of the NHS with California's Kaiser Permanente

    1. Richard G A Feachem, director (rfeachem{at}psg.ucsf.edu)a,
    2. Neelam K Sekhri, chief executive officerb,
    3. Karen L White, programme development officera
    1. a Institute for Global Health, University of California, San Francisco and Berkeley, CA 94105,
    2. b Healthcare Redesign Group, Alameda, CA 94502
    3. Health Care Policy Programme, King's Fund, London W1G 0AN
    4. Institute for Healthcare Improvement, 375 Longwood Avenue, Boston, MA 02215, USA
    5. Graduate School of Business, Stanford University, Knight 214, Stanford, CA 94305-5015, USA
    1. Correspondence to: R Feachem

      Abstract

      Objective: To compare the costs and performance of the NHS with those of an integrated system for financing and delivery health services (Kaiser Permanente) in California.

      Methods: The adjusted costs of the two systems and their performance were compared with respect to inputs, use, access to services, responsiveness, and limited quality indicators.

      Results: The per capita costs of the two systems, adjusted for differences in benefits, special activities, population characteristics, and the cost environment, were similar to within 10%. Some aspects of performance differed. In particular, Kaiser members experience more comprehensive and convenient primary care services and much more rapid access to specialist services and hospital admissions. Age adjusted rates of use of acute hospital services in Kaiser were one third of those in the NHS.

      Conclusions: The widely held beliefs that the NHS is efficient and that poor performance in certain areas is largely explained by underinvestment are not supported by this analysis. Kaiser achieved better performance at roughly the same cost as the NHS because of integration throughout the system, efficient management of hospital use, the benefits of competition, and greater investment in information technology.

      What is already known on this topic

      What is already known on this topic Comparisons of healthcare systems in different countries have to be undertaken with great care but can be instructive

      The overall healthcare system in the United States is more expensive than the NHS and population health outcomes are no better

      The US healthcare system comprises many discrete and unique subsystems, including the health maintenance organisations

      What this paper adds

      What this paper adds An integrated, non-profit health maintenance organisation in California (Kaiser Permanente), with over six million members, costs about the same as the NHS but performs considerably better

      Kaiser's superior performance is mainly in prompt and appropriate diagnosis and treatment

      These findings challenge the widely held view that the NHS is efficient and that its inadequacies are mainly due to underinvestment

      Footnotes

      • Editorial by Smith

      • Funding The posts of RGAF and KLW are funded by the University of California. NKS is an independent consultant.

      • Competing interests All authors have been affiliated at one time, in some manner, with at least one of the institutions compared in this paper. RGAF used the NHS between 1948 to 1995. NKS was an employee of Kaiser Permanente from 1981 to 1994 and consulted with Kaiser intermittently until 1998. KLW was a member of Kaiser Permanente for one year during 1998-9.

        Commentary: Funding is not the only factor

        1. Jennifer Dixon, director
        1. a Institute for Global Health, University of California, San Francisco and Berkeley, CA 94105,
        2. b Healthcare Redesign Group, Alameda, CA 94502
        3. Health Care Policy Programme, King's Fund, London W1G 0AN
        4. Institute for Healthcare Improvement, 375 Longwood Avenue, Boston, MA 02215, USA
        5. Graduate School of Business, Stanford University, Knight 214, Stanford, CA 94305-5015, USA

          Footnotes

          • Competing interests None declared.

            Commentary: Same price, better care

            1. Donald M Berwick, president and chief executive officer (dberwick{at}ihi.org)
            1. a Institute for Global Health, University of California, San Francisco and Berkeley, CA 94105,
            2. b Healthcare Redesign Group, Alameda, CA 94502
            3. Health Care Policy Programme, King's Fund, London W1G 0AN
            4. Institute for Healthcare Improvement, 375 Longwood Avenue, Boston, MA 02215, USA
            5. Graduate School of Business, Stanford University, Knight 214, Stanford, CA 94305-5015, USA

              Footnotes

              • Competing interests None declared.

                Commentary: Competition made them do it

                1. Alain C Enthoven, professor (enthoven_alain{at}gsb.stanford.edu)
                1. a Institute for Global Health, University of California, San Francisco and Berkeley, CA 94105,
                2. b Healthcare Redesign Group, Alameda, CA 94502
                3. Health Care Policy Programme, King's Fund, London W1G 0AN
                4. Institute for Healthcare Improvement, 375 Longwood Avenue, Boston, MA 02215, USA
                5. Graduate School of Business, Stanford University, Knight 214, Stanford, CA 94305-5015, USA

                  Footnotes

                  • Competing interests ACE has been a consultant to Kaiser Permanente for 28 years. He does not believe that his conclusions will affect their financial results.

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