"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Saturday, 23 April 2011

Are UK private hospitals capable?

Recently Deloitte produced a document aimed at Americans who are considering "healthcare tourism" that is, going abroad for elective treatment. There are two things that struck me.

The first thing is Figure 5:

This says that the cost of surgery (and the stay in hospital) for a hip replacement is $43,000 in the US and $9,000 in India (there is no indication here of how this "average" figure is calculated, but clearly if the patient has other medical issues - co-morbidity - then the cost will be more). The document goes to great lengths to say that the foreign hospitals are to US standards, even to point out that they have "partnerships" with US hospitals where the clinicians are trained.

Most of the activity in NHS hospitals is paid through what is known as "payments by results" (this is actually, payment by activity because they are paid for what they do rather than for the outcome of the treatment). The tariff for hip operations are between £716 ("minor hip procedure") to £8,152 ("major hip procedure" involving a major complication or patient co-morbidity). Using an exchange rate of £1 = US$1.65 the NHS rates are $1,181 to $13,451, ie similar to the rate for India and far lower than the US rate.

The government says that in the new NHS market private providers will be paid the NHS tariff. Clearly this presumes that the private sector can do these procedures for the NHS tariff (and still make a profit!). So if the UK private hospitals are so cost effective, surely they would be the destination of choice for US healthcare tourists? After all, we speak the same language (well, we speak it better, jk), our cultures are similar (Friends is shown prime time in both countries) and our clinicians are trained as well, or better, than those in the US (notwithstanding Madonna's ignorance). Surely Americans should be chartering planes in their thousands to get a hip replaced and then do a coach tour of Olde Englande? They're not.

This is the second thing I noticed when reading the the Deloitte report. The document estimates that 6 million Americans went abroad for treatment in 2010. The report addresses the issue of safety and quality by mentioning the Joint Commission International accreditation and interestingly not a single UK hospital has JCI accreditation (but 24 Irish hospitals are listed). Consequently the Deloitte document does not even consider the UK as a destination for US healthcare tourism.

Six million patients and barely a single one of them comes to the UK for our incredibly cost effective, but high quality treatment, why is that? The Care Quality Council does not warn UK patients against using private hospitals, so one assumes that quality is good. So perhaps it is cost? Medical Care Direct is essentially a broker of private healthcare in the UK, their website gives a list of "guide prices" for common procedures and for hip operations they list:

Total hip replacement (Primary with or without cement) £6,800 to £10,450
Again, one assumes that this is without any major complications.* In US$ this range is $11,220 to $17,242. Again, it should be cost effective for an American to come to the UK for a hip operation (they're going to Singapore for the treatment at that price).

[*Since I am not a doctor, I cannot verify these figures. However, they do look a little odd since hip replacements are listed as being £6,800 to £10,450 yet knee replacement is listed as £9,300 to £14,600, ie knees are more costly than hips; the NHS tariffs are £696 to £3,222 for knee operations that is, less than half of hip costs. From this, I suspect the website has got the wrong cost for hip operations.]

There is one other possible reason why Americans are not queuing up to have their hip replacements in the UK: capacity. Capacity is determined by the numbers of surgeons, and if the limited number of surgeons are spending all their time clearing the 18 week NHS waiting lists they are not available for performing the same operation for bargain seeking Americans. It is interesting that the 18 week target is now effectively optional and hence the NHS waiting lists are growing.

All of this makes me wonder if the Lansley/Letwin healthcare market is possible. If the UK private healthcare providers are not already exploiting the droves of Americans seeking cheap, high quality elective healthcare, how can they be in any state to provide the NHS with much cheaper, equally high quality elective healthcare?

1 comment:

  1. Quite. However I am not worried about outside coming in but how our health care is available and at what cost to our people. If a private payment allows for someone to go to India or Singapore or Ireland then fine, but what about the people of the UK? Some can afford the payments to other countries for quick and cheaper private health care. Maybe if all health care was cheap and covered by costs of insurance and or health saving schemes, as it could have been if the private market was functioning as it “should” have been. It was not functioning for the benefit of people who were low waged or worse out of work and in the poor houses – before that it did not function for the low waged and pauper. The end result of market failure to provide health care to the masses is the 1948 NHS Act – I have yet to be dissuaded by this truth. The fact that we now need to change it or to supplement it as population increase and demographic changes occur does not mean it failed. The fact the private sector has to be buttered up to provide such facilities without them already trying to tells another story to the adage of free markets, free markets, free ruddy markets. History. History. Ruddy History.

    Charities and mutuals, religious institutions and philanthropic idealists had to be around to take up the fallout from the free market provision of health care. All well and good maybe. But in the modern world of reality in the 21C do we really want to be begging at the door for our meds. and health care treatment because we cannot afford it when we suddenly need it?