Economic Grand Rounds: Observations on Britain's National Health Service

The initial, and perhaps most important, step for me was to learn the basic structure of the NHS. The NHS is a tax-supported government entity whose responsibility is to provide comprehensive medical care to all citizens of the United Kingdom. The Department of Health is the overseer of health care delivery. When the NHS was established in 1948, all services, including prescriptions, were delivered to the patient with no direct payment by the patient. The government allocated money directly to local hospitals and clinicians, who were then responsible for providing care to their local community. At that time most psychiatric hospitals were large institutions that operated well away from most patients' local communities. Several of these large hospitals continue to operate, although the plan is to continue to replace them with local community-based care. Outpatient services are provided by local general practitioners who serve as gatekeepers for all specialty services, including psychiatry. The stated goal of the NHS is to maintain the general practitioner as the individual who provides the majority of care, with referral only of the most difficult cases (1).

Several dramatic changes were introduced into the NHS by the governments of Margaret Thatcher and John Major. One key reform was to eliminate direct payments to local hospitals and practitioners and to replace them with payments to local health authorities who became the purchasers of health care services for the local community. The impetus for this change was the belief that it would introduce competition into the NHS, so that local authorities could negotiate prices and services with local providers while having the ability to contract for services outside the local community.

The provider organizations, known as trusts, administer hospitals, clinics, and some nursing homes, among other facilities. London, for example, is geographically divided into different trusts responsible for providing services to the population for which they have contracted with the local authority. It appears that almost all health care is still provided locally, although, in general, less money is being paid to providers than before the reforms. The local authority pays the trusts using a formula that takes into account the population and expected need, with slightly higher funding going to more socially deprived areas.

Other reforms that have recently been introduced into the NHS have been the development of private health care and a concept known as fundholding by general practitioners. The fundholder is a general practitioner or group of practitioners who receive a lump-sum payment for a group of patients under their care, and they in turn contract directly with other providers. Individual patients are allowed to decide whether to participate in the fundholding system. In this case, the fundholder, not the local health authority, acts as the purchaser of services for its patients and negotiates rates of payment and availability of services.

Options for private health care have also been recently introduced. Individuals can purchase health insurance plans or pay out of pocket either to have a private physician or to stay in a private hospital. Currently, some private psychiatric hospitals are operating in England.

I have provided only a general overview of the structure of the NHS and its recent reforms, but I find it helpful to think about its financing as a government-administered capitation system whereby all demands for care must be met with a predetermined amount of funds.

The public's reaction to the NHS and recent reforms became especially apparent in the recent parliamentary election in May 1997. During the election, concerns about the NHS and its future and stability were some of the most contentious and emotionally charged domestic issues discussed. Although both the Labour and the Conservative parties were adamant that they would maintain a commitment to a publicly funded NHS, they were equally adamant that there would be no tax increases to make up its financial shortcomings.

In general, the public is becoming increasingly concerned over long waits for services and widely reported shortages of physicians and nurses. However, little public outrage seemed to be expressed when reports appeared that some patients were denied care because funds were lacking. An understanding seems to exist among British citizens that a publicly funded health care system cannot provide everything for everybody. One of the Labour party's central promises during the election was to shorten NHS waiting lists and to increase clinical funding by reducing administrative costs. The Labour government has also committed itself to the previous Conservative government's pledge to increase funding by only .3 percent per year for the next few years.

The Labour party also expressed grave concerns over the general practitioner fundholders, believing that this arrangement is creating a two-tiered care system. The future of fundholders is in doubt under the new Labour government. In fact, the first significant legislation passed by the new Labour government during the summer of 1997 dealt with changing the structure and financing of the NHS.

During the election, the press also reported numerous problems with the NHS. Besides financially driven denials of care, low levels of staffing and a relatively low average per capita spending were prominently reported. The United Kingdom allocates approximately $1,300 per person per year in health care spending, significantly lower than most other European countries and lower than the average $3,800 per person per year spent in the United States. One prominent publication referred to the NHS as "third rate."

But what about the reaction of psychiatrists and other clinicians? As I stated earlier, most of the people I met work in inner-city London where waiting times are longer, need is greater, and delays in hospitalization are not uncommon. The clinicians with whom I spoke are, like many of their American counterparts, disillusioned with the way the system is being run and with the financial limitations on the care they believe is clinically indicated. They see the recent reforms as doing more harm than good and believe that yearly budgets are not adequate to cover their patients' needs.

Some clinicians feel that the competition has resulted in hospitals receiving less money for providing services while being asked to offer more services to an aging and sicker population. Many social services remain underdeveloped and underfunded, and clinicians in the inner city see worsening social conditions exacerbating or even causing psychiatric illness. A recent review found a significant lack of high-intensity services such as home-based care and day treatment (2). The same review also found poor coordination of social and psychiatric services.

Although the system officially supports a continuous range of psychiatric services and coordination of legal, social, and medical services, few programs are in place to effectively provide for many patients' needs. At times I am hard pressed to see a difference between English and American clinicians in their attitudes toward the lack of an extensive system of community care. Like their American counterparts, many British clinicians feel overwhelmed and frustrated and are sometimes unable to adequately meet the psychiatric needs of individuals from economically deprived communities.

I was struck by the similarity of our problems, which was highlighted even more by one conference I attended entitled "A Mental Health Service With Ambitions." The subtitle was "The Whining's Got To Stop: New Local Partnerships for Patients With Mental Illness." Whining about the current situation of mental health care, instead of acting on it, is another concept that seems applicable to both sides of the Atlantic. We also seem to share a general disillusionment about our ability to provide the health care that we were trained to provide. While I was in England, a report on attitudes toward the NHS of physicians under 40 years old revealed that they generally felt as though they were being turned into technicians by intrusive "managers with clipboards," who were more concerned with productivity and financing than with providing good patient care.

Many of these problems and concerns are now being openly debated in the United Kingdom, with most clinicians and citizens arguing for increased funding for the NHS. There has been much talk by the new Labour government about improved funding and manpower for clinical services, but only time will tell if these improvements will occur.

Our shared disillusionment is striking, both with our ability to provide the extensive psychiatric care we believe necessary and to cope with the overwhelming social problems of psychiatric patients in a health system inadequate to met their needs. With vastly different attitudes and expectations from our health care systems, and radically different mechanisms of funding, both America and the United Kingdom seem to have arrived at a strikingly similar set of problems. It all makes me wonder if it is possible in today's world to provide the range of services and support that psychiatrists have been trained to provide and many people need without a significant amount of clinician frustration and disillusionment. Whether health care is funded solely through tax dollars or private insurance funds, it appears that we must seriously question our own expectations as clinicians and policy makers about the level of psychiatric and social care we can realistically fund and provide.

Dr. Pate is a child psychiatry fellow at Children's Hospital, 300 Longwood Avenue, Boston, Massachusetts 02115 (e-mail, [email protected]). Steven S. Sharfstein, M.D., is editor of this column.