Archive for mai, 2011

French Health Service

Vendredi, mai 27th, 2011

In the previous article (refer to Categories/Chairmans Blog/NHS Reform Problem in the right-hand index column) the point was made that, using the example of the French health service, which has been highly rated by the World Health Organisation (WHO), the introduction of private sector competition in the British National Health System (NHS) is not necessarily a change for the worse. The Prime Minister has also made the case that modernization is essential to save the NHS from rising costs leading to a funding gap of some £20 billion by 2015. In addition, serious concerns have now been raised by the Care Quality Commission (CQC) about the way some NHS hospitals treat elderly people. The CQC has said that three hospitals had broken the law by failing to meet essential standards of care on dignity and nutrition. We will see how the increasing number of elderly people requiring care is already of concern to the French state when we address the French health service further below.
However, the British Medical Association (BMA) representing the medical profession has already called for scrapping of the government proposed Health Bill, saying that required changes can be achieved without legislation. The Deputy Prime Minister & Liberal Democrat party leader Nick Clegg, has added a call for collaboration rather than dog-eat-dog, open competition, in the provision of health services.
Taking the standard of excellence given to the French health service by the WHO, it is instructive to look at the health and other dependency problems also facing the government in France (Les Echos Mercredi 18 Mai, 2011). The number of elderly people dependent upon state care is expected to double by 2060 (+35% by 2030). This is anticipated to result from an increase in life expectancy amongst the elderly which will be accompanied by similarly increasing problems of incapacity whether e.g. with respect to their health and/or ability to look after themselves. From 2025 the problem will worsen when the population bulge from the baby-boomer generation born at the end of WWII will begin to reach 80 years of age and require increasing care.
The French health service itself is considered by the French Health Insurance association to have worsened over the last 30 years and requires rapid structural reform. A protocol agreed on 15 October, 2009 allowed for the opening up of an optional, intermediate level of fees between the sector 1 state level and the higher sector 2 level of private practice. This applied to specialists such as surgeons, anesthetists, gynecologists & obstetricians who would in turn commit to a minimum 30% of their work being charged at the rate reimbursed to their patients by the French state social security. For their remaining work, their fees should not exceed the state social security rate by more than 50%. The association of complementary health insurance would then have encouraged its members such as not-for-profit mutuelles, health insurance companies and institutions to cover these excess charges over and above the state level, the objective being to gain the support of the great majority of practitioners to remain within this optional intermediate level of fees.
However, the net result by 2010 is that the excess fees charged and not reimbursed by the social security already represent €2.5 billion (17% of total specialist fees) and the average excess charged has reached 54%, compared with 52% in 2009 and ………25% in 1990. The Health Insurance association, therefore, considers the current market for health services a sham in which the main aim of resetting the tariff structure seems to be only to produce fees increasingly in excess of the social security level. Further, the data for 2010 shows that within certain areas of expertise the great majority of new practitioners have opted for the private sector 2 :
• 87% of new surgeons
• 82% of gynecologists
• 66% of anesthetists
On average 58% of the medical profession (excluding general practitioners) have chosen sector 2 in 2010. For surgeons, their excess fees already represent 32% of their total remuneration. Over the last 10 years the most rapid progression within sector 2 has been observed amongst anesthetists and radiographers even though for the latter this only represents 14% of their total practitioners. There is also a regional effect with the average excess fees of private surgeons already reaching 150% above the state level in Paris & its surrounding areas, 110% in the Rhone region and 90% in Alsace.
The question for the Coalition government in the UK is whether it can rely on the BMA to do any better amongst its members to secure change on a voluntary basis i.e. through collaboration and not legislation?

NHS Reform Problem

Mardi, mai 17th, 2011

In the previous article on this blog (refer Categories/Chairman’s Blog/Constitutional Reform in the right-hand index column), we quoted the point made by Bill Emmott , writing in The Times, that before proposing a solution first define the problem that must be solved. The reform of the NHS (see also Categories/Chairmans Blog/NHS Reforms in the right-hand index column) proposed by the government is another case and point.
Polls show that satisfaction levels with the NHS amongst those who use it are currently the highest they have been in recent times. This makes it difficult for people to understand the actual problem that requires this government reform as a solution. It is also a matter of people in general being resistant to change preferring instead e.g. to be grateful to wait in the queue for health care available to all, rather than taking a risk on a change for the worse. This is despite the World Health Organisation (WHO) concluding that France and Holland offer a much better health service through a mixed system of public, private and charitable funding.
The non-profit-making, health insurance companies (Mutuelles) in France, provide insurance complementary to that of the State social security and are often are set up for particular professions e.g. students, teachers etc. Since they then cater for a much larger segment of the population over which to spread their risk than the private insurance schemes of the UK, their charges are proportionally lower and more widely affordable. Private sector competition in the NHS is not necessarily by definition then a change for the worse. Nor should there be necessarily a great fear encouraged by political opportunists, of ending up with something akin to the American health system which supposedly would refuse to treat someone too poor to pay for life saving treatment. President Obama has also already used up a lot of political capital to ensure improved access to health insurance for poorer people.
The Prime Minister has added authority from his successful No campaign in the Referendum on The Alternative Vote (AV) but here it was easier to lobby against change, and indeed also essential if reports are true that the Conservatives had concluded that they would lose out under a system of AV, with significantly more Liberal Democrats likely to give their second preference vote to Labour than to the Conservative party. He now has to convince the public that not only is the NHS safe under a Conservative–led government but that improvements are also necessary and can be implemented while still ring-fencing its finances against the current budget cuts. As it is, with professional staff associations and unions accusing the Health Secretary of trying to destroy the NHS or privatize the NHS, his reform bill has been halted and a consultation process is underway to find allies in the medical profession but likely to result in heavily diluted legislation (as also was the case with President Obama who finally had to compromise).
Yesterday, the Prime Minister was already making the case that modernization was crucial to save the NHS from rising costs that pointed to a £20 billion funding gap by 2015. The only option as he put it, is to change and modernize the NHS, to make it more efficient and more effective, and to focus more on prevention, on health, not just sickness. These are fine words but there are still quite raw memories passed down of what it was like before the advent of the NHS for those who could not afford to pay for treatment and this fuels fears of a similar outcome in the future. However, there are still major problems to be resolved such as the increasing costs of treating the elderly as this proportion of the population continues to expand with improving life expectancy. It is also not acceptable in a developed country in Europe that people are forced to pay privately just to get an appointment with a GP or a dentist within a reasonable time or that for non-emergency treatment they can wait months to see a specialist, for the results of medical tests or for a follow-up operation, indeed for the latter in the past sometimes years.

Constitutional Reform

Jeudi, mai 12th, 2011

According to Bill Emmott writing in The Times, Monday 9th of May (Memo on Reform), a difficulty facing all advocates of constitutional reform is that without some crisis facing the country it is difficult to convince people that there is a constitutional problem that needs to be solved.
This then explains in a way the heavy defeat of the Yes campaign for the Alternative Vote (AV) in the referendum of last Thursday (Refer also to articles under Categories/Chairmans Blog/Alternative Vote in the right-hand index column). Here the difficulty in presenting a case for electoral reform was that the need for governments to be properly representative of the people as argued by the Liberal Democrats, seems to have already been met by the existing first-past-the-post voting system, which resulted in a Coalition government consisting of two parties supported by more than 50% of the voters in the 2010 national election. As indicated by the referendum results, an AV system that then just results in a coalition containing more Liberal Democrats than now seems not worth changing the voting system for the vast majority of people.
Having lost the AV referendum, therefore, Nick Clegg the Liberal Democrat party leader and Deputy Prime Minister, should tread carefully with his proposals for direct election by Proportional Representation (PR) to the House of Lords, possibly the biggest constitutional and cultural anachronism in the country but the latter by itself not sufficient argument for change. He would do better instead to make the case for a stronger check on the House of Commons, by a legitimate, elected and stronger Upper House.
Electing peers to the House of Lords could then change the balance of power in Parliament with PR in turn making the Lord essentially more representative of the people and, therefore, more legitimate than the Commons, the latter currently unchecked by any constitutional role for the Head of State (The Monarch) and little restrained by the current House of Lords (notwithstanding e.g. the 11th May rejection by Peers of the Government Bill for Elected Police Commissioners).
In a similar way, Alex Salmon with his Scottish Nationalist Party (SNP) now a governing majority in the Scottish Parliament, should think carefully about what problem he is aiming to solve with his plans for a referendum on Scottish independence from the UK, given that most Scots seem currently against it, they can fly the Scottish flag when they want, have a strong sense of national identity, control e.g. their own health care, legal and education systems and could not have afforded the recent British taxpayer-funded bail-out of their major banks i.e. RBS and HBOS.

Budget: Aims & Achievements.

Mercredi, mai 4th, 2011

To support MPs debating the Finance Bill (developed from the Budget) in the House of Commons on the 3rd May, and to establish a system of monitoring yearly progress towards improving the longer term growth prospects for the UK economy, the Treasury Select Committee has established certain criteria. Such criteria include:
• Fairness
• Growth
• Competition
• Certainty & Simplicity
• Stability
• Practicality & Coherence.
Tax experts from the professional associations and institutes for accountancy and taxation were then invited to evaluate the Budget against the above criteria which are considered important for good tax policy.
Now the Chancellor in his Budget has emphasised his twin aims of e.g. ensuring fairness in taxation and encouraging growth in the economy and the tax experts in general support the cut in corporation tax, the increase in entrepreneur tax relief and the limiting of tax haven status for foreign subsidiaries of UK multinationals.
However, the increased tax burden on middle-income (£40,000 - £50,000) households when also withdrawing their tax credits and child benefits is viewed as unfairly taxing them (The Squeezed Middle?) proportionally more than those on higher incomes. Again, the surprise windfall tax on North Sea oil companies although considered simple and clear does not on the other hand support the need for tax policy stability and growth in the economy. The unexpectedness of the tax rise could also impact competiveness. In addition, the changing level of the bank levy, the latest change in force from 1st January, adds instability and uncertainty to the long term tax regime as far as the banks are concerned. Further, to reduce capital allowances to offset the effects of corporation tax cuts on the overall tax take, introduces incoherence within the business tax system when this also results in e.g. unincorporated businesses being penalised by this capital allowance reduction.
It will be interesting to see if the Treasury Select Committee succeeds in this Budget monitoring role which is similar to the Congressional Budget Office in the USA but without proportionally similar resources.