My name is Chris Birchenough and I am delighted to have been asked to write an article for LYFZ on healthcare. I have a reputation for being a bit of a polymath and political junkie. For some of you, or maybe most of you, you may be put off at the admission that I am staunchly Conservative, but please do hold your judgement as you may find yourself pleasantly surprised (or dare I say enlightened) by what you read. In this article, I hope to briefly lay out my current insights into the state of healthcare in the UK and some possible options to improve it going forwards.
Firstly, let us look at healthcare here in the UK. Most people can recite a horror story about a hospital stay or attempt to access some form of service and most people can recite a story of a time when they were amazed by the level of care they received.
Anecdotally, the NHS seems to be a real mixed bag and common sense would dictate that this is because it simply is. Standards and outcomes in the NHS seem to vary greatly by geographic area or area of medicine. We all generally understand why this is; some parts of the NHS are run better than others, or receive better funding from Government, the NHS is a planned service and as a result there is always someone who must anticipate changes in demand for certain services and designate finances accordingly. Those of you who have ever studied the economics of the Soviet Union, will understand the issues with attempting to predict demand and supply. It can be done, but it is clunky and not as efficient as an organic system that a market would provide.
This brings us to the elephant in the room, privatisation.
There are a number of private healthcare models around the world. Looking across the pond, I think we can all agree that the American model of health insurance simply doesn’t work. Life expectancy in America is lagging behind, at an average of 78.5 years. It ranks 40th behind Turkey and Ecuador and this is despite spending more on healthcare than any other nation in the world (over $11,000 per capita). Clearly the American system is not for us and quite frankly, it shouldn’t be for America either. Any yet, looking back at the UK for a moment, we spend just under half of the US expense and for that we gain (only 2.9 years extra in average life expectancy), we still sit at the lower end of developed nations on this metric.
So where should we look to for ideas to improve healthcare in the UK?
In terms of life expectancy, the top 5 nations are Japan, Switzerland, Norway, South Korea and Singapore. Of these nations, Norway and Switzerland both spend significantly more than the UK on their health systems, so their ranking is perhaps unsurprising.
Japan only spends marginally more than the UK on healthcare for the best life expectancy in the world!
This is impressive and would perhaps indicate that Japan is where we should be looking for inspiration, however in doing so, the answer to Japanese success is really quite obvious: Their diet and lifestyle is far healthier than our own in general. Culturally, they have a very different approach to life. This is clearly a key observation that I shall return to later, but in terms of practical actions, there is little to take away.
The country that I find most interesting on the above list, is Singapore. You may have heard about the Singaporean healthcare system, but for those who have not, I will briefly explain how it works before giving you my conclusions.
Singapore only spends 4% of GDP on healthcare, as opposed to the UK’s 7.5% or the USA at 17.7%. It’s system is a mix of both Private and Public in both financing and delivery. Healthcare is divided into 5 classes that allow access to varying levels of care. The top level of care will net you a fancy private room with your own choice of doctor. The lowest level of healthcare in Singapore looks very much like the NHS standard, a ward with about 6 other patients and whatever doctor is available.
Those who choose the lowest level of care pay only 20% of the cost, whilst those wanting a private room have to pay for that themselves. There are a range of options in between, with varying levels of Government financial support.
Individuals in Singapore are required to put 20% of their wages into a savings account, which is then further supplemented by contributions from their employer equivalent to around 17% of the employees wage. This account is split into three sections: the first section is for home purchase, insurance and education, the second is the equivalent of a pension and the third section is to pay for medical expenses. These accounts earn interest at a rate set by the Government which is capped at $43,000, at which point you can divert your savings to whatever you like.
Singapore also runs a number of grant programs, such as the parenthood package that pays out up to $8,000 per child as a lump sum. They will also run child development accounts where the Government will match whatever you pay in to save for your child’s future. Sometimes they will simply top up your account if they think healthcare costs have risen faster than expected.
Furthermore, Singapore operates a safety net for catastrophic illnesses, which costs you between $33 and $370 per year. In return, you receive up to $200,000 of healthcare cover on top of your other accounts and insurance. It then operates a further safety net for those who have depleted all of these options, this option will provide you with the aforementioned base level of care.
Singapore allows private hospitals’ own care packages to operate, however, these options are highly regulated in order to prevent care costs from inflating, as hospitals compete on wages to attract the best doctors.
This is a basic overview and from it, I would point out the following: The UK would NOT be advised to try and create a carbon copy of the Singapore system, Singapore is after all a small city state with a very high GDP per capita, however there are some very important lessons we can learn here:
1) Private and Public systems can work together to provide better outcomes if regulated well, the competition gives people choice and in turn, drives hospitals to be more efficient, welcoming and effective.
2) Singapore’s savings account system has a profound effect on how people access the system, when incentivised to save and spend your own money, people choose to take better care of themselves and only access services when they need to, rather than waste time and public money on over the counter medication.
3) A tiered system of healthcare allows the wealthy to subsidise the care of others due to profits made from those choosing private rooms.
My overall view is that when it comes to the NHS, both sides are half right. Though the Conservatives have rightly given up on any substantial privatisation of the NHS, there is still a debate to be had about how we could implement private enterprise within our own system. But in doing so, we must take notes from the regulations pioneered in Singapore and recognise the lessons learnt in America about how free market approaches simply don’t work with healthcare.
It is clear that Singapore’s savings account system has a lot of positive effects. We may not wish in this country to create a carbon copy of their system, but perhaps putting the money we pay in national insurance back in the hands of individuals, would create some real incentives to change our lifestyles for the better, this is clearly an area worth exploring.
In the UK, we all believe in the idea of healthcare being free at the point of use. Both Henry Willink, the Conservative minister who first proposed a National Health Service, and Aneurin Bevan, who enacted it into law, agreed on this principle. As a nation, we would never accept a system like many that exist in the world – where some go without. However, we must not allow this belief to cause us to shun all debate over how healthcare should work. The triumph of Singapore is that their system is not static. Singapore has been open to change its system as and when it is needed, they are pragmatic and forward looking in their approach. This, perhaps above all else, has been our greatest failure, and we must endeavor now to foster an open conversation on healthcare with a collaborative attitude.
Opinions welcome. Got a different view? Get involved.