A Comparative Analysis of the UK and USA Healthcare Systems

Introduction

This essay critically and comparatively presents the differences in the UK and USA health care systems in terms of their funding and provision, delivery mechanisms, and policy approaches to health care. The systems that are followed in the two countries are vastly different and rooted in different policy decisions and approaches. The UK system is driven by a policy of providing universal health care at zero cost through a system of general taxation while the USA system is driven by the use of social insurance for funding of health care. This essay argues that although there are some drawbacks of both systems, on the whole the UK presents a better system in terms of access to health care by all beneficiaries.

Health care in the USA and the UK: The contrasts

Policy context

The policy context of the way health care system is organised in the USA and the UK are very different (Mossialos, et al., 2018). In the USA, there is no policy to provide universal health care access to all and to a great extent the ability to access health care is determined by individual circumstances, with the poorer people not having the same access to health care as those who are financially better off. Any health care reforms based on the idea of providing social insurance to the underprivileged have largely remained unpopular because of the resistance by the traditional American ideas of individual responsibility for managing their own health care (McDonough, 2012). Consequently, health care remains unaccessible for a significant number of poor sections of the USA. The previous Obama government tried to correct this problem by introducing some reforms in the form of the Patient Protection and Affordable Care Act, which came to be seen as a controversial law and still managed to leave out a significant number of Americans from insurance coverage (Davidson, 2010). The law was introduced to provide some subsidies in the insurance sector so as to increase the insurance base, but the insurance still remains the most expensive in the industrialised world (Davidson, 2010). Health insurance is expensive in the USA because it is inclusive of administrative costs and profits for the payer, both of which have doubled in the last 3 decades (Davidson, 2010, p. 26). One of the policy suggestions with respect to American health care is in the adoption of taxation system on the lines of the Canadian and the UK health care systems (Holtzblatt, 2009). The idea behind this policy change suggestion is to provide universal health care as is available in the UK. In the USA, taxation and funding for health care are not linked to each other, except in the way the income tax laws allows exclusions of employer health care insurance; deduction of self-purchased insurance policies; and deduction of medical expenses (Holtzblatt, 2009, p. 171). There is no provision for funding of health care through taxation as there is in the UK. However, such policy suggestions remain unpopular in the USA (Holtzblatt, 2009). The criticism of the current policy approach to health care in America continues in that the health care system is seen as a contradiction with contradictory outcomes, costing more money, employing more technology but underserving approximately 20 percent of Americans (Johnson & Kane, 2010 ).

On the other hand, the policy approach to health care in the UK is based on welfare principles introduced by Lord Beveridge after the Second World War (Greener, 2009). The policy is based on the need to provide universal health care coverage to all beneficiaries through the NHS, at zero cost to the patient. In the recent times, some policy changes have been suggested in the UK as well to counter some of the criticisms levelled at the universal coverage system in the UK. There have been suggestions made to increase spending on prevention of diseases and well being (Ham & Murray, 2018). A patient co-payment system is also being suggested to counter the mismatch between supply and demand for primary care services in the NHS and driven by the claims of unsustainability of the universal zero cost (Toop & Jackson, 2015). The question of how far NHS maintains universality in the UK is also moot now because of the devolution that has led to the countries within the UK following different policy paths where they make different choices about the structure, funding, and governance of the health care systems (Bevan, et al., 2014). This can be illustrated by the point that Scotland provides free personal care and general medical prescription but similar provision is not applicable in England (Bevan, et al., 2014). Nevertheless, the nature of funding of health care remains the same in all of the UK.

Resourcing and funding

The question of how health care is funded in the UK and the USA provides an important contrast to the two systems. These contrasts and the impact of how funding impacts health care are discussed in this section of the essay.

The UK health care system is funded through a system of general taxation. The NHS was established in 1946 after the end of the Second World War as a part of Lord Beveridge plan to respond to the growing health disparities in the UK public health care system (Greener, 2009). At the time of the establishment of the NHS, the question of its funding was an important issue and the policy makers of the time made a deliberate choice to use general taxation as the preferred system for funding of the NHS. The basis for this choice was the use of the redistributionary principle, which requires that the taxes levied on the basis of the incomes of the citizens be used to contribute towards the funding of the NHS, with those having higher incomes contributing more to the funding through higher taxation. In other words, the health care of the poor was subsidised through the higher burden of NHS funding being borne by those who were in better material circumstances. The advantage of this system of funding through general taxation is that the NHS is able to provide health care without barriers to all citizens and beneficiaries but on the other hand, those who are bearing the higher burden for health care funding through higher taxes do not get any extra services than those whose health care is subsidised (Greener, 2009). The advantage of this system is that the health care access and quality remain equal for all citizens and beneficiaries.

In the USA, the funding of health care is done through a system of insurance, where people pay for insurance to private insurance companies that are involved in the business of providing medical costs. However, payment of insurance is dependent on the financial abilities of the individual and this has meant that the poor who are unable to pay for insurance have found that primary health care has remained difficult to access (Davidson, 2010). For those who have no health insurance, primary care remains expensive and prohibitive, which has led to some community hospitals in the USA trying provide health care services to the poor (Davidson, 2010, p. 7). There is no universal health care provision in the USA unlike the UK, where NHS is accessible at zero cost to all based on the system of general taxation funding. One of the criticisms of this system is that poor patients without insurance and ability to pay hospital or visitation fees do not interact with the doctors and primary care providers, which had adverse effect on their health condition (Davidson, 2010). Due to this reason, it is argued that the American health care system is deeply flawed as it remains inaccessible to a significant number of Americans.

Provision and governance

In the USA, the way the health care system is organised has led to the creation of the concept of health care as a commodity, which is one of the principal criticisms of the American health care system. The health care system in the USA, unlike in the UK, is largely privatised and market linked where health care is looked at as a system that also leads to revenue generation and competition in health care (Rooney & Perrin, 2008). The market linked health care system and commodification of health care has led to some undesirable consequences such as increase in private debt and personal bankruptcies due to health care costs in an expensive system (Davidson, 2010, p. 29). There are also some concerns about the prevailing regulatory mechanisms for the health care sector (Jacobson, Napiewocki, & Voigt, 2011). Health care in the USA is regulated at state and federal level to ensure that there is accountability within the health care system (Jacobson, Napiewocki, & Voigt, 2011). The Joint Commission and the National Committee on Quality Assurance make regulations in this context, which are applicable to all health care providers in the USA (Jacobson, Napiewocki, & Voigt, 2011). At the same time, there are voluntary standards followed by the hospitals, leading to a combination of public and voluntary standards, which have been blamed for leading to confusion and for failure to ensure ideal quality standards (Jacobson, Napiewocki, & Voigt, 2011). In the UK, the governance is based on a number of regulatory mechanisms introduced by the NHS.

Structural changes to the NHS were made under the Health and Social Care Act 2012, although the funding remains the same. Regarding the quality of the health care, one of the criticisms of the NHS is that as 75 percent of the budget is allocated to staff payments, there is little room for improvement in the health care (Greener,, 2009, p. 114). UK’s health care funding has come in for its share of criticism but alternatives similar to the American system of social insurance have also not been found appropriate (Duckett & Peetoom, 2013). One of the criticisms of the UK health care system related to its funding model is that it is more restricted in context of health care spending as compared to the American insurance based model (Greener, 2009, p. 113). This criticism stems from the government control over the NHS budget, which leads to a situation where at times funding is led by supply and not by demand (Greener, 2009). The American insurance based system sees the opposite of that as funding is led by demand (Greener, 2009). Due to this contrast between the UK and the USA systems, it is argued that NHS is unable to meet the needs of the patients at all times as there may be budgetary restrictions that come in the way of NHS meeting the demand (Greener, 2009, p. 113). Therefore, in the UK, patients may have to be put on waiting lists as the NHS may not be able to respond to the demands due to budgetary restrictions.

The second criticism of the UK system is that it may create conditions (such as waiting lists), due to which patients may choose to seek private health care, which would lead the patients to pay for health care costs instead of relying on the NHS to foot the bill (Greener, 2009). As the same physicians who are on NHS may also be providing private care, there is a possibility of conflict of interest, which is one of the long standing criticisms of the NHS system (Klein, 1984; Greener, 2009). While these may seem to be serious criticisms of the way the NHS is funded, the alternative of the American insurance system is also found to be unviable because the NHS does meet the expectations of patients at a zero cost, which is not something that can be said of the American health care system which remains inaccessible to a significant number of poor people (Greener, 2009, p. 115). Therefore, the system in the UK irrespective of the shortcomings, is found to be more equitable than the one in the USA.

Conclusion

To conclude, the systems in the UK and the USA are widely divergent in terms of the policy, funding nature and the governance system. The UK system is based on the general taxation system through which the NHS is funded, and which allows universal health care to all beneficiaries of the NHS. However, there are some concerns about the sustainability of the system because NHS budget is created by the government and most of it is used to service the salary of the workers. Despite these criticisms, the system remains more viable than the American system because it is accessible to all and does not deny the poor the opportunity to quality health care.

References:

Bevan, G., Karanikolos, M., Exley, J., Nolte, E., Connolly, S., & Mays, N. (2014). The four health systems of the United Kingdom: how do they compare? London: The Health Foundation and Nuffield Trust.

Davidson, S. (2010). Still broken: Understanding the US health care system. Stanford University Press.

Duckett, S., & Peetoom, A. (2013). Canadian medicare we need it and we can keep it. Montreal , Quebec, Canada: McGill-Queen's University Press.

Greener, I. (2009). Healthcare in the UK: Understanding Continuity and Change. Bristol: Policy Press.

Ham, C., & Murray, R. (2018). The NHS 10-year plan: how should the extra funding be spent? London: King’s Fund.

Holtzblatt, J. (2009). The Challenges of Implementing Health Reform through the Tax System. In H. Aaron, & L. E. Burman, Using Taxes to Reform Health Insurance: Pitfalls and Promises (pp. 171-210). Washington D.C.: Brookings Institution Press.

Jacobson, P. D., Napiewocki, L. M., & Voigt, L. A. (2011). Regulating the US health care system: Failure in motion. Journal of health politics, policy and law, 36(3), 583-589.

Johnson, D., & Kane, N. (2010 ). The US Healthcare System: A Product of American History and Values. In E. R. Elhauge, The fragmentation of U.S. health care causes and solutions (pp. 323-342). Oxford : Oxford University Press .

Klein, R. (1984). The politics of ideology vs. the reality of politics: The case of Britain's National Health Service in the 1980s. The Milbank Memorial Fund Quarterly. Health and Society, 82-109.

McDonough, J. E. (2012). Inside national health reform. Berkeley : ; New York : Milbank Memorial Fund c : University of California Press .

Mossialos, E., McGuire, A., Anderson, M., Pitchforth, E., James, A., & Horton, R. (2018). The future of the NHS: no longer the envy of the world? The Lancet, 391(10125 ), 1001-1003.

Rooney, J. P., & Perrin, D. (2008). America's Health Care Crisis Solved: Money-Saving Solutions, Coverage for Everyone. New York, NY: John Wiley & Sons.

Toop, L., & Jackson, C. (2015). Patient co-payment for general practice services: slippery slope or a survival imperative for the NHS? Br J Gen Pract, 65 (635), 276-277.

Dig deeper into A Comparative Analysis of Public and Private Health Insurance with our selection of articles.