The National Health Service provides some lessons — both good and bad — around models of coverage expansion.
On a recent trip to Great Britain to learn about the English National Health Service (NHS), we observed the increasing areas of overlap between the American system of primarily private insurance and the English system of primarily public insurance. Although we do not support nor expect the United States moving to a fully public system, such as that favored by some adherents of “Medicare for All,” we could envision the United States adopting some form of universal coverage that is based upon the Medicare Advantage infrastructure. The NHS provides some lessons — both good and bad — around models of coverage expansion.
The United States is an outlier among First World nations insofar as it lacks a guarantee of universal coverage. The key difference between the British and American systems is that everyone in the United Kingdom receives cradle-to-grave health coverage — and copays at the point of service are rare. We saw up close the way that universal coverage brings stability to the healthcare system. There is strong support for the NHS throughout Great Britain that goes back to its founding during the post-World War II recovery and the country’s communal spirit after the war — it’s a spirit of “we’re all in this together” rather than the coverage and pricing that divides Americans between the healthcare haves and have-nots. The NHS is one of the few nationalized services that survived the Conservative governments of the 1980s and 1990s, during which the airlines, rail systems and coal mines were sold off to the private sector.
Residents of Britain tend to see healthcare for all as part of their national culture, so much so that the country embedded a celebration of the NHS in the ceremonies that opened the London 2021 Summer Olympics.
The universal coverage that is a hallmark of the NHS has significant benefits. There is no going back and forth between having health insurance coverage and not having it or switching from type of coverage or insurer to another. This lack of “churn,” as health insurers call it, leads to greater efficiency in administration and better control of healthcare costs. Medical bankruptcies, which are common in the U.S., are far rarer a phenomenon in the U.K. In addition, thanks to universal coverage and the absence of consumer churn, the proportion of healthcare spending that goes toward administrative overhead in the U.K. is one-fourth that of the overhead in the U.S. – 1.9% versus 8.9%. That difference of 7 percentage points is significant. With the size of the U.S. healthcare economy at $4.5 trillion per year, that suggests a potential savings of $315 billion per year in avoidable paperwork. That’s more than the entire Medicare annual outlay for prescription drugs.
The NHS also has the ability to negotiate directly with drug companies. The lack of churn and stability in the population it covers allows the service to craft creative pricing arrangements. For instance, Janssen Pharmaceuticals agreed to a contract with the NHS whereby the company paid money back for any patient who used their drug Velcade (bortezomib) for multiple myeloma and saw a return of their disease after four treatment cycles. These sorts of creative, value-based contracts are among the reasons the NHS’s annual drug outlay is among the lowest per capita among Organization for Economic Cooperation and Development countries: $517 USD annually per capita, compared with $1,432 in the U.S.
While churning between insurance companies and uninsurance is uncommon in commercial and Medicare coverage, it is practically a defining characteristic of the Medicaid program. In 2022 Congress passed the Consolidated Appropriations Act, which requires all states to cover eligible children on Medicaid for a full year regardless of their parents’ income. Some states have gone further to cover eligible children up to age six. Bills have been introduced in the House and Senate that would likewise require all states to cover all eligible adults for a full year. Reducing the level of churn in and out of Medicaid would reduce administrative costs and allow more innovative use of value-based purchasing arrangements for both healthcare services and pharmaceuticals.
Although the NHS eliminated many waiting periods when Labour Party leader Tony Blair was prime minister in the late 1990s and early 2000s, subsequent underinvestment and workforce shortages have led to a recurrence of significant wait times for diagnostic and nonemergency surgeries. In both the U.S. and the U.K., the intersection between the healthcare system and the social sector is often a point of substantial friction, especially where there are insufficient supports to help people transition out of care and live independently in their own homes. People in the U.K. who cannot take care of themselves safely at home during recovery are likely to remain in the hospital until adequate in-home supports are in place. This reduces health system capacity and extends wait times for nonurgent procedures.
Here in the United States, we also struggle with the way unmet social needs influence the healthcare system. People who are covered through Medicaid face economic insecurity and often lack access to basics such as affordable housing, healthy food and safe neighborhoods. It’s unsurprising that people with Medicaid coverage generally have worse health outcomes compared with people who are privately insured.
Community-based Medicaid managed care organizations (MCOs) have been leading the way in addressing health-related social needs for decades. MCOs have increasingly collaborated with government programs, community-based organizations and creative partnerships to meet social needs and improve health outcomes.
While Britain and the U.S. have differences in the underlying structures of insurance coverage, we face common challenges related to the workforce, addressing social needs and preparing for changes in the world around us. Both nations have accelerated the use of technology to address quality gaps and racial disparities in access to care and health outcomes. The intercultural exchange in studying other systems provides insight into the strengths of our own system and highlights some of the areas where we could learn from others.
Margaret Murray, M.P.A., is CEO of the Association for Community Affiliated Plans and a member of the Managed Healthcare Executive editorial advisory board. Nancy Wise, M.P.H., MBA, is president of Spring Street Exchange.