Introduction

The UK government seems to draw much of its inspiration for health policy from the United States. Hence the recent love affair with Kaiser Permanente's care pathways and the recent affirmation of the belief that choice and payment by results will move England towards a patient led NHS.1 Using evidence from the US and Canada, we question this source of inspiration, raise the possibility that the current policy trajectory will lead to greater private financing of health care, and outline why the United Kingdom should be wary of this. We then suggest a solution to financing that retains some aspects of managed care and current policy but rejects others. Our solution recognises the cash limits of the NHS and its twin goals of equity and efficiency.

Did managed care work in the US?

It is easy to interpret managed care in the US as having led to greater efficiency in terms of outcomes and cost.2 However, managed care organisations like Kaiser Permanente have essential differences from the NHS. Crucially, they operate in a free market without universal coverage. They are not obliged to take all comers; patients who represent the “best risk” can be creamed off by targeting groups who make low use of health services. This practice is reinforced by relatively healthy consumers self selecting into the lower cost plans offered by managed care with little threat to their health. Controlling for income or socioeconomic group when comparing Kaiser with the NHS2 does not adequately remove this source of bias.3^–5 The best risk people from high (or low) income groups will somehow select into Kaiser, whereas the NHS has to look after everybody.

Furthermore, …