For and against

Education and debateSocial insurancethe right way forward for health care in the United Kingdom?ForAgainst

BMJ 2002; 325 doi: (Published 31 August 2002)
Cite this as: BMJ 2002;325:488

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Currently, the NHS is funded from general taxation. This allows for money from more sources to be injected in to healthcare resources. If social insurance is to be introduced, we may assume that only the working population is contributing to it and thereby excluding the scheme to those who are unemployed and those who has never been in employment – e.g. those with congenital illnesses or chronic diseases.

This type of system will inevitably increase the difference in health status between the rich and poor. It will not do us any favour in improving the overall health of our nation. This will further erode the principle of equity that we have been so proud of.

From the view point of the medical profession, social insurance will be poorly fitted among those with altruistic philosophy. From the angle of health manager, it may not be the most cost effect solution to replace our current NHS.

Assuming that there is low unemployment and most of us contribute to social insurance. Aren’t we then more or less go back to tax based system where a general pool of money is constantly being fought over to provide the necessary services? There will come a day when social insurance contribution will have to keep increasing just like private medical insurance. Demand will be high because everyone who has contributed to it feels that they need to get something back from it. Wouldn’t this just drive up the cost of healthcare?

Providing better funding structures and developing a more elaborate system of evaluating cost effective healthcare may be more practical then to incur the huge initial set up cost for introducing social insurance scheme into our current NHS.

It would be difficult to measure clearly the differences in the standard of care between the UK and other European countries. With private health care, perverse incentives exist. Treatment and investigations are often driven by demand and profit rather than by clinical indications. When political interference may restrict some of our practices in the UK, argument can often be made using clinical freedom to act in the best interest of our patients.

Rationing may not sound acceptable but it may be inevitable. If we look again, it exists in one form or another in different healthcare systems. Queuing and waiting list are examples of rationing and they exist in one form or another under private insurance like the HMO schemes or the Preferred Provider scheme. Cost containment will remain a key issue for the years to come as medical technology gets more sophisticated.

It is likely that most voters and politicians would like to see the NHS remain a tax funded system. Any changes away from it could do irreversible damage to the system much like our other privatised public services – Railtrack for example.

We would be better off concentrating our debate on how best to improve our services instead of seeking and arguing for alternative methods of funding and managing which we may all live to regret later.

Competing interests: None declared

Taik P Chuah, General Practitioner

Chai H Kang

Cavendish Health Centre, London, W1G 9TQ

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4 September 2002

For two reasons I can't believe that the foto suggesting a consultation in a German practise is true. Paramount to out -patient medicine here, is ECONOMICS. The doctor portrayed really squanders films with 15 pictures/sheet. I would make do with 45. Furthermore demonstrating CT results to a lay person can be so time-consuming (generally most medical colleagues don't understand these pictures either) that it is just not on. In particular, the radiologist in Germany, unlike the referring doctor, is not paid for a consultation, so he likes to give the exam result to the patient and tell him to talk about it with his referring doctor, who will be paid.

I should add, that social security medicine lets me function in my role as a treater of disease in a very satisfying fashion: if a patient is suffering, I can call him in for his examination straight away and play my part in alleviating his pain without delay, which unfortunately seems not to be the case in state medicine.

Competing interests: None declared

timothy g morley, radiologist in practice

marl germany D-45768

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Martin McKee et al. in their article and rapid response make a formidably comprehensive case against Britain switching to social insurance funding of health care. Two points are worth underlining. First, the sheer administrative cost of an insurance-based system. Second, the likely British reluctance to pay out-of-control health care costs, which tend to accompany insurance-based systems.

Using insurance to fund health care entails huge volumes of transactions that the NHS avoids. Individuals pay premiums to insurance funds, pay fees to doctors, hospitals, labs and pharmacies and claim reimbursement from insurers. It may be hard to quantify European administrative costs, but US health insurance staffing gives some sense of the burden. Aetna, the USA’s largest health insurance firm, employed 37,000 staff for a membership of 17.5 million people in 2001.(1) Scaling that up for the UK population would require over 100,000 staff. That is equivalent an additional 10% of the NHS’s current staff, without counting the impact of paperwork on employers and the public. Any advantages of an insurance-based system are speculative, but the extra administrative overhead and hassle for patients are certain to be incurred.

France’s social insurance system has no mechanism to control total health spending and promote value for money because neither the joint managers of the key insurance fund – the Force Ouvriere union and the employers – nor the State accepts that responsibility (2). Results include wasteful duplication of services and excess capacity: too many small hospitals, 10 times as many dermatologists as England, and so on (3). The situation of out-of-control spending in Germany is not very different. While the British may regret that Treasury control has arguably kept the NHS budget too low for current elective surgery demands, it is not clear that they want their health spending to jump an immediate 50%, to bring them to the French level (4).

Social insurance is a strange and exorbitantly costly idea for tackling the NHS’s problems.

Julian Bene

No competing interests

1. Martinez B., Aetna to Cut an Additional 16% of Staff ,Wall St Journal, 14 December 2001

2. De Kervasdoue J., La Sante Intouchable, Pub JC Lattes 1996, pp 50-55, 83 - 84

3. De Kervasdoue op cit, p 78-79

4. D’Intignano B., Sante et Economie en Europe, Pub PUF 2001, p 22

Competing interests: None declared

Julian M. Bene, Management consultant

Atlanta, GA, 30306 USA

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30 August 2002

Dear Editor,

Your readers may have wondered if the authors of the cases ‘for’ and ‘against’ were dealing with the same issue. Unfortunately we were not.

Some history may help to explain this. When we were first contacted by the BMJ it was just after the publication of the Wanless Report, which argued for increased NHS funding from general taxation. This elicited a hostile response in certain political circles, with some, in particular the Adam Smith Institute, arguing for greater private insurance, with competition between insurance funds, and more self-payment. We were told that the Adam Smith Institute were preparing an article setting out their arguments, that had previously appeared in one of their reports (reference 2 in our paper). As a consequence, we addressed our arguments to the points they had made. Unfortunately, as we later learned, they were unable to produce an article that met the requirements of the BMJ, in terms of the rigour of their evidence and arguments. At that stage David Green and Benedict Irvine were invited to take over their task. The position adopted in their article is quite different from that of the Adam Smith Institute. As a consequence, our article cannot be considered a response to theirs. In fact, our original manuscript was somewhat longer than that eventually published and in it we addressed many of the points made by Green and Irvine. As we were unable to respond properly at the time, we would now like to address some of the issues raised in their article.

Value for money: Knowledge of how much one pays for a health care system is a measure of transparency, not value for money. The latter requires an understanding of what that money is buying and what the alternatives are.

This is not a simple matter. Indeed, unlike systems like the NHS, the actors in social insurance systems have shown a marked reluctance to publish performance measures and as the debate about the new disease management programmes in Germany shows, there is often considerable resistance to the concept of evidence-based medicine.

Strangely, under ‘incentives’ Green and Irvine concede that France and Germany have been criticised for providing poor value for money! It is also not the case that social insurance systems are funded solely from the earmarked contributions listed on one’s pay slip. In Germany, for example, major capital investment is funded from taxation. All countries find alternative sources to pay for some groups that would otherwise be uninsured.

Standard of care: Green and Irvine quote Wagstaff and van Dooslaer’s paper of 1993 but seem unaware of the more recent work by van Doorslaer et al., published this year [1], which shows no clear relationship between equity of access to care and either amount of, or system of health care funding after adjustment is made for health need. Green and Irvine also seem to take it for granted that health care is uniformly of a higher quality in France and Germany than in the UK. While access to elective surgery may be faster, there are many unanswered questions about preventive interventions and the management of chronic diseases. For example, immunisation rates are uniformly lower in countries with social insurance than in those with tax based systems. These elements of a health system are of especial benefit to the poor.

Patients as customers: this presupposes that the patient is the best judge of health care. Yet, as we saw in the Shipman case, many of Harold Shipman’s patients were very satisfied with the quality of care provided even though he was murdering their relatives. Health care is a complex product and Green and Irvine seem unaware of the extensive evidence of information asymmetry, which leads patients to make choices that are not ultimately in their best interests. In fact, if the goal is to allow payment to “any provider chosen by the consumer” this can be achieved with any funding system. The question is whether, in the light of developments in evidence-based health care, this is really a good idea. It is true that satisfaction with the health care system is generally high in countries with social insurance systems but it is also high Scandinavian countries, where funding is from taxation.

Incentives: Here Green and Irvine seem to agree with our analysis that social insurance systems have faced some problems in ensuring value for money. The requirement in Germany to contract with any provider, a position supported by Green and Irvine in the previous paragraph, compounds this problem.

Effect on professional duty: We agree that a balance between professional regulation and autonomy is necessary but developments here have been influenced by events such as those at Bristol and have little to do with the system of funding.

Balancing expectations and resources: We are surprised that Green and Irvine rely on the extensively criticised rankings of responsiveness in the 2000 World Health Report. The problems with these scores have been addressed at length elsewhere but it is sufficient to note that they are generally regarded as having very little validity.

There is one other important issue that Green and Benedict have not addressed, but which is crucial when considering adoption of social insurance in the UK. Social insurance is based on a close relationship between employers and employees, which has its roots in the system of industrial governance that pertains in the countries concerned. This is also manifest in very “un-British” attributes such as trade union representatives on company boards. Creation of a social insurance system in the UK would require a completely different form of industrial system and one which, when it has been suggested, has provoked strong opposition from the current leaders of British industry. Consequently, we believe that introduction of social insurance into the UK would be all but impossible at present. There are, of course, many other models that could be adopted, including a system of hypothecated taxation. This would increase transparency but would not be social insurance. As we note in our article, every system is unique and there is a danger in drawing general conclusions from settings that differ so widely.

Martin McKee, Elias Mossialos

1. van Doorslaer E, Koolman X, Puffer F. Equity in the use of physician visits in OECD countries: has equal treatment for equal need been achieved? In: Smith P, ed. Measuring up: improving health system performance in OECD countries. Paris: Organisation for Economic Co- operation and Development; 2002. p. 225-248.

Competing interests: None declared

Martin McKee, Professor of European Public Health

Elias Mossialos

London School of Hygiene and Tropical Medicine, London WC1W 7HT

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