A British Perspective on Patient Choice

by Len Fleck, Ph.D.

Margaret Holmes-Rovner asks the question, “Does increased patient choice serve the interests of health care reform?” I want to address that question from the British perspective, specifically, the perspective of NICE (the National Institute for Clinical Excellence) and the NHS (National Health Service). Britain spends only half as much on health care (as a fraction of GDP) as we do in the US, roughly 8% vs. 16.5% (2006). But the British health care system is besieged with the same costly advances in medicine that we face in the United States. Given their other social priorities, they cannot afford to buy as much of this expensive care as we do.

The role of NICE (created in 1999) is to do very careful evidence-based cost-effectiveness studies of all these new medical interventions for purposes of determining what will or will not be covered by the NHS. NICE is comprised of experts from a range of medical and nonmedical disciplinary areas who are ultimately responsible for deciding what will or will not be included as part of NHS coverage. They are deliberately isolated from typical interest group pressures and political horse-trading, which could skew their judgment, but they have a sophisticated approach to eliciting representative public input, especially with regard to value trade-offs integral to these judgments.

To return to Holmes-Rovner’s question, one clear outcome of NICE is that it does restrict patient choice, but it is in the service of health care reform (making wiser, fairer, more cost-effective choices). One major reason why health reform efforts have consistently failed in the U.S. is that we have a highly fragmented system for financing health care, which means that we cannot have effective, wise, or fair mechanisms for controlling health costs or making difficult rationing decisions.

In theory managed care plans ought to have strong motivations to control costs. In practice (because of widely circulated medical horror stories in the 1990s) managed care has minimal capacity to make painful rationing decisions (for fear of losing “customers” to competitors who would be perceived as being more “patient-friendly”). Likewise, managed care plans cannot afford to alienate physicians by being miserly in reimbursements since that too could result in lower quality care and “customer dissatisfaction.”

Employers have at their disposal effective but unwise mechanisms for controlling health costs, such as high copayments or deductibles, as in Health Savings Accounts. What the RAND experiments showed, however, was that patients faced with such cost-control measures were just as likely to make wise choices as unwise choices so far as reasonable medical self-interest was concerned. Cost barriers are indifferent and uninformative with regard to the value of the health care behind those barriers.

One would expect government to have the capacity to put in place fair and effective cost controls, but the Medicare prescription drug benefit (Part D) is powerful evidence for the exact opposite of that expectation. The rhetoric of the Bush administration was that patients would be given the choice of several hundred prescription drug plans, and this was clearly preferable to a single government-determined plan. But the reality was massive consumer confusion, escalating costs, and increased inequities in access to needed healthcare. This was primarily because Big Pharma built into the legislation authorizing Part D a prohibition against Medicare bargaining directly with the large pharmaceutical makers. The result has been drug discounts for consumers in the vicinity of 15% instead of 50%, and ten-year projected costs to Medicare for Part D of about $800 billion instead of $400 billion.

Finally, with a highly fragmented financing system each insured patient “stands alone.” Moral arguments aimed at persuading patients to give up what “society” or some set of “healthy experts” regard as marginally beneficial non-costworthy care will fall on deaf ears, especially if that service is a covered benefit for that patient. Why, such a patient will ask, should they give up a benefit (even a very marginal benefit) if they have already paid for it? A society-wide deliberative conversation could both educate and motivate better (fairer, more cost-effective) decisions in such circumstances, but the isolation of individuals in insurance plans practically prevents such conversations. Consequently, health costs within plans increase rapidly, thereby driving more individuals into the ranks of the uninsured where they have no choices, informed or uninformed, a very nasty outcome. Better to choose NICE.