Controlling the Costs of Care

Great Britain spends around 10% of its GDP on health care, almost half the percentage spent by the United States. Like Canada, Britain has made its health funds go further than they otherwise would through national and regional planning and by keeping salaries relatively low. Because the government owns a large proportion of health care facilities and employs a large proportion of health care personnel, it can base decisions about developing, expanding, and locating high-technology facilities on a rational assessment of how best to use available resources and can avoid the unnecessary proliferation of expensive facilities. Similarly, because it is such a large buyer, the NHS can negotiate drug prices effectively with pharmaceutical firms.

In addition, England has attempted to restrain government health care expen- ditures by promoting the privatization of care. Privatization was initially promoted in the late 1990s by a liberal government that saw it as a way to quickly expand the numbers of health care providers and access to health care. More recently, con- servative governments have adopted privatization as a way to reduce government expenditure and expand the nation’s market economy. Private companies can now run primary care practices funded by the NHS, private hospitals can compete for NHS contracts against public hospitals, and NHS hospitals can now offer a variety of services on a cash basis. In addition, officially commissioned groups of general practitioners in each region are now required to put services (such as nursing home or hospital care) up for bid rather than deciding based on their own judgment whether to use for-profit or NHS services. Finally, and as in Germany, both private and public hospitals have been pressured to control costs by a DRG sort of system.