NCPA - National Center for Policy Analysis


July 26, 2010

Even as Great Britain's new coalition government said it would make enormous cuts in the public sector, it initially promised to leave the National Health Service (NHS) -- the country's government-run health care scheme -- alone. But in one of its most surprising moves so far, it has done the opposite, proposing what would be the largest reorganization of the NHS since its inception in 1948. 

Practical details of the plan are still sketchy.  But its aim is clear, says the New York Times: 

  • To shift control of England's $160 billion annual health budget from a centralized bureaucracy to doctors at the local level.
  • Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers.
  • The plan would also shrink the bureaucratic apparatus, in keeping with the government's goal to obtain $30 billion in "efficiency savings" in the health budget by 2014 and to reduce administrative costs by 45 percent.
  • Tens of thousands of jobs would be lost because layers of bureaucracy would be abolished.  

In a document, or white paper, outlining the plan, the government admitted that the changes would "cause significant disruption and loss of jobs."  But it said: "The current architecture of the health system has developed piecemeal, involves duplication and is unwieldy.  Liberating the NHS, and putting power in the hands of patients and clinicians, means we will be able to effect a radical simplification, and remove layers of management." 

The health secretary, Andrew Lansley, also promised to put more power in the hands of patients: 

  • Currently, how and where patients are treated, and by whom, is largely determined by decisions made by 150 entities known as primary care trusts -- all of which would be abolished under the plan, with some of those choices going to patients.
  • It would also abolish many current government-set targets, like limits on how long patients have to wait for treatment.  

The plan, with many elements that need legislative approval to be enacted, applies only to England; other parts of Britain have separate systems. 

Source: Sarah Lyall, "Britain Plans to Decentralize Health Care," New York Times, July 24, 2010. 

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