The financing of the UK healthcare system

The financial backing of the UK health interest trunkSince the recession, the UK debt and deficit has been at an all time high, where by the end of 2009 UK debt was reported to be 950.4 billion, equivalent 68.1 gross domestic merchandise (gross domestic product) and the deficit was 159.2 billion, which equated to 11.4% gross domestic product (Figure 1).1 With that in mind it is a incident that all customary sectors al dispirited for be facing spending cuts to reduce the g all all overnments debt and deficit. Since the NHS receives its funding from the government, it is logical that it will face spending cuts too. in that respectfore, it is significantly important to use stintings as bingle of the determinants in the apportionment of already limited healthc atomic number 18 resources.Figure 1. Shows the UK government debt and deficit as percent age of GDP, from 2006 until the end of 2009.1political economy is concerned with efficiently allocating the limited available res ources, between alternative uses, to achieve maximum effectiveness.2 There is an of all time increasing number of different technologies and medical preventatives that cannot all be utilise to treat illnesses. The limited resources in the healthc ar services, delegacy decisions on resource allocation mother to be do c atomic number 18fully so that maximum effectiveness can be achieved. In order to efficiently allocate resources, one has to realise the economic rating of the different alternatives before implementing the one that is the most effective and follow-effective.3wellness economics is used to improve peoples health, which is how it differs from normal economics, in that it is not ab discover analysing consumers demand and lend, but analysing benefits of medical interventions in resemblance to their costs. In health economics it is also much difficult to measuring stick health bycomes in relation to financial outcomes in financial economics. Outcomes of healt hc be interventions ar usually measured in musical note set life years (QALY).3Patterns of financing health careThere are two methods of financing healthcare, which are national financing and private financing.4 Public financing of healthcare raises capital through taxation of the public ( bow 1). The NHS is funded mainly through public financing. Private healthcare is where the capital is raise through the patients using the health services. The patients each pay themselves or are usually insured, so the insurance company pays their healthcare bills ( put over 2). The healthcare clay in the ground forces raises capital through private financing.5Table 1. Describes the different methods and sources of public financing in healthcareSources of Public FinancingDescription of FinancingGeneral Tax Revenuese.g. UK, Italy, New ZealandFinance is raised by taxation the cost of raising gold is lowGeneral taxation pays all the bills so patients do notLow cost per capitaTwo types of general taxationRegressive Falling more on the poor than rich people Includes tax on items such as tobacco, alcohol and volunteer(a) events etc.Progressive Falling more on the rich than poor people Includes tax on luxury products purchased by the richDeficit FinancingRaised by, issuing bonds with long term low interest repayments and bilateral or multilateral aid loansBorrowing and spending funds that are repaid over a period of timeDeficit financing supplements general tax revenueIt is used on the development and expansion in healthcare infrastructureEarmarked TaxesTax on a particular product such as lottery and gambling for particular services such as healthcare well-disposed Insurancee.g. France, Germany and AustriaThe state acts as insurerFinanced by employer and employee payroll deductionSocial insurance is establish upon collective adventure of insurance groupGovernment might also contribute to social insurancePublic wellnesscare Insurancee.g. Canada, Taiwan and South Korea Uses private sector volunteerrs but payment made by government run insurance classs.Capital disbursement are financed from tax revenuesIt is cheaper and much simpler to administer than the American for-profit insurance.Wealth is transferred only from low to high risk groups, not from those with high income to low incomesTable 2. Describes the different methods and sources of private financing in healthcareSources of Private FinancingDescriptionPrivate wellness InsuranceSocial device in which a group of individuals transfer risk to another ships company in order to combine loss experienceby Risk PoolingRisk FundingSystem of third party payments has the effect ofincreasing demandIncreasing of pricesInefficient allocation of resources absorber Financed SchemesEmployers directly finance healthcare for their employees counselling on accident stripe and occupational health.They pay for private sector health servicesEmploy medical personnel directlyProvide necessary facilities and equipmentEmployees families are also covered.Community FinancingIt is volunteer in its naturePayment for healthcare is made by members of the communityResources are controlled directly by the communityDirect Household ExpenditureHealth ingestion constitutes a large share of GDP throughPeople buying more health servicesPeople buying high timbre health servicesGovernment services charge fees from usersRaises household costs causing inequityA study produced by the world health organisation concluded that in healthcare services that were in public funded, the uptake was lower. This was as a percentage of GDP and per capita. It also concluded that the tribe as a whole gained get out health outcomes, universal standards were in place and costs of treating illnesses were reduced by change magnitude emphasis on preventative primary care.6Healthcare systems in UK and ground forcesIn the UK, the National Health Service (NHS) was developed in 1948, where for the whole population heal thcare was free and it is paid for by taxation, which means people would pay for it according to their means, not their needs.7The NHS is wholly funded by the government, through various methods such as taxation and national health insurance (Table 1). Only 1.3% of the core NHS expenditure is provided through charging patients, the other 98.7% is funded by the government, where 90.3% of that comes from taxation and 8.4% comes from national insurance.8 In the UK, only 11.5% of the population purchase supplementary private health insurance, whereas in the USA over 67% of the population concur health insurance.9 10In the USA the healthcare system is not funded by the government but rather by public and private health insurances. Private insurance which is mostly employment based, funds 67.5% of the healthcare budget and the rest is funded by public health insurance. The healthcare system in the USA is funded by the demand for good health, whereas the NHS is funded by the supply of he althcare. There are various programmes of public health insurance that are used to fund healthcare in the USA. These programmes include medicaid which helps the poor, medicare which helps the elderly and the disabled, state children health insurance plan which aims to help poor children and last other plans such as those that are offered to the military. Although these public health insurances are in place to provide help to the poor, elderly and disabled, 45.7% of Americans do not have health insurance.10The differences between the healthcare systems in the USA and the UK also differ in terms of health outcomes, availability and costs. In 2009 the total health expenditure in the USA was 15.7% of GDP in comparison to only 8.4% of GDP in the UK. Tables 3, 4 and 5 are demonstrate the differences between the two healthcare systems.11 Also, even though the USA has much higher(prenominal) health expenditure than the UK it still has a lower life expectancy at birth (78.8 years) compared to the UK (79.5).Table 3. Compares the healthcare expenditure of the USA and the UK healthcare systems in 2007.11IndicatorsUKUSATotal expenditure on health, % GDP8.416Total expenditure on health, Per capita US$ palatopharyngoplasty29927290Public expenditure on health, % total expenditure on health81.745.4Public health expenditure per capita, US$ PPP24463307Out-of-pocket expenditure on health, % of total expenditure on health11.412.2Out-of-pocket expenditure on health, US$ PPP343890Table 4. Compares the healthcare resources of the UK and USA healthcare systems.11IndicatorsYearUKUSAPractising physicians, density per 1,000 population20072.52.4Practising nurses, density per 1,000 population20071010.6Medical graduates, density per 1 000 practising physicians200637.726Hospital beds, density per 1,000 population20073.43.1Acute care beds, density per 1,000 population20062.82.7Psychiatric care beds, density per 1,000 population20060.70.3MRI units per million population2007(e)8.225.9CT Scann ers per million population2006(e) 7.632Table 5. Compare health and disease in between the UK and the USA.Indicators of HealthUKUSALife Expectancy at Birth (years)79.578.8Mortality Rate Under 5 (per 1000)5.77.8 matriarchal Mortality (per 1000)811DiseaseDiabetes Hospital Discharges per 100,00072197.9Cancer Hospital Discharges per 100,000994563Acute myocardial Hospital Discharges per 100,000153277The comparisons above show that increasing funding does not mean that the grapheme of health would improve. The USA spends much more capital on healthcare than the UK, but they still have a higher mortality rate for children under the age of 5. The table above demonstrate the fact that in NHS, the funds received are spent much more effectively than the healthcare system in the USA, display that more effective resource allocation decisions are made and hence better health outcomes are achieved. Also imputable to the lack of health coverage in the USA, around 45,000 people are killed all(pren ominal) year.12 Such figures do not exist in the NHS as healthcare services in the UK are free for everyone.Other means of showing how the NHS is better than the health service in the USA, is that in the UK, patients are treated in accordance to their illnesses regard slight of their social class, whereas in the USA more income means better treatment, which of course only benefits the rich. Also administration charges in health services in the USA which are publicly funded such as medicare and madicaid cost much more than the services in the NHS making it less(prenominal) readily available to all the poor, elderly or disabled.The enormousness of application of economic paygrade in the NHS, to provide decision makers with robust information to guide resource allocation decisions.The definition of economic evaluation is that it is a comparative digest of two or more courses of action in terms of two their costs and consequences.13 Hence in healthcare it can be thought of as a fas hion model to assess the benefits and costs of each alternative method of healthcare intervention. The limited resources such as people, equipment and facilities in the healthcare, provide a helpful framework where alternative uses of the available resources can be compared. Economic evaluation in healthcare aims to maximise the outcomes from available resources through aiding resource allocation.13There are three types of economic evaluations. These include cost-effectiveness analysis (CEA), cost-utility analysis (CUA) and cost-benefit analysis (CBA). Although these terms characterise different types of analysis, they do share or so similar components, which include a stated perspective, a comparison group, and evidence of effectiveness, evidence of costs and a method of combining both costs and effects collectively. The differences in the analyses are the ways used to measure and value health outcomes. When the health outcomes of comparative interventions are established to be t he same, then a cost-minimisation analysis (CMA), which is a sub-component of CEA is used, and only considers the inputs. This analysis aims to decide which intervention is the cheapest method of attaining the same outcome.13Resource allocation decisions in the NHS are very important because demand for healthcare exceeds the recourses that are available, which gives health authorities many challenges to face. ascribable to the acknowledged resource constrains in the NHS, economic evaluations have become a recognised part of constitution making.14 In England, the National Institute of Health and Clinical Excellence ( pleasant) is in charge of providing the national counselor for promoting good health and the treatment and prevention of ill health and provides clinical guidance to improve the quality of healthcare.15 In order to do that, the effectiveness and cost-effectiveness of comparative healthcare interventions are required to be considered.There is a large increase in proced ures and technologies for the prevention and treatment of diseases. Therefore, there are many alternatives of treatments and prevention of illnesses with variations in efficiencies and quality of care. Rational priorities in healthcare cannot be set for current and new resources. Hence, enough would consider whether the resources available are being used in the best way possible to maximise efficiency. Technology appraisals are recommendation by skilful on the use of existing and new treatments and medicines in spite of appearance the NHS, such as surgical procedures, medical devices etc. which the NHS is legally obliged to fund. These very important recommendations, are based on evidence of how well the treatments and medicines work (clinical evidence) and how well they work in relation to their cost (economic evidence), (i.e. does it represent value for money?).16Discuss the principles and an appropriate method for conducting an economic evaluation of breast crab louse topThe breast malignant neoplastic disease top programme aims at geting breast cancer at an early stage in women between the ages of 50-64, who are at a significantly increase risk of developing the neoplasm.An economic evaluation of the breast cancer screening program would need to compare to cost-effectiveness of the programme and of the treatment that would follow, with the cost-effectiveness of symptomatic detection of breast cancer and the appropriate treatment that would also follow. One would have to calculate the QALY of both the screening program and symptomatic detection, in order to achieve a vicenary measure of the benefits of the two interventions. In order to calculate QALY one would need to work out the quality of life during the disease stage and multiply it by the duration of the disease stage. This would provide a duodecimal measure so that two interventions aimed at the same disease can be compared. Then one would need to calculate the costs of each intervention. B oth of these would provide the cost effectiveness of each intervention and would show which is more cost-effective.3Evaluate the rationale of the screening programme targeted to women aged between 50 and 64 in the UK.It is established now that breast cancer is the most common type of cancer in the UK, where 45,700 women and 277 men were diagnosed with it in 2007. Over the last 25 years, the incidence of incidence of female breast cancer rose by 50%. It is much more common in women over the age of 50 were 8 out of 10 women diagnosed fall in that age group.1716,000 cases of breast cancer were detected in 2007/2008 through the NHS breast screening programme, and it is estimated that 1,400 lives are saved every year because of this programme. Approximately 2 out of 3 women with breast cancer sound more than 20 years with the disease. Where before 5 out of 10 women survived beyond 5 years now it is 8 out of 10 women. The graph (Figure 2) on a lower floor illustrates the decreasing morta lity of women diagnosed with breast cancer in comparison to the past. The earlier breast cancer is diagnosed the increased chance of survival. Approximately 9 out of 10 women diagnosed with stage I breast cancer survive longer than 5 years, whereas only 1 out of 10 women diagnosed with stage IV breast cancer survive beyond 5 years. Although so many lives are saved each year due to the screening programme, there were still 12,116 deaths from breast cancer in 2008 and 99% of these were in women.Therefore, it is crucial to detect breast cancer as early as possible to increase the chances of survival and the quality of life. In addition, detecting breast cancer at an early stage and treating it would be more cost less than the long term treatment of women diagnosed with later stages breast cancer.18The reason the screening program is for women between the ages of 50-64 is that this age group have a much higher incidence of breast cancer in comparison to younger age groups. The average a ge of menopause is 50 and this is the when the breast become less dark and cancer can be detected much easier. The compliance in the age group of women over 64 years old is low therefore it would increase costs and decrease the benefit of the screening program making it less cost effective.Figure 2. Demonstrates the age-standardised (European) mortality rates of breast cancer patients in the UK from 1971 until 2007.ConclusionIn conclusion this report has discussed the different patterns of financing healthcare (Table 1 2). The health system in the USA was compared with the NHS in terms of financing, availability and cost. It was determined that the NHS has a lower health expenditure as percentage of GDP than the USAs health expenditure. However, the effective use of these recourses through guidance provided by NICE after taking into account economic evaluation of the different available resources makes the NHS a better healthcare provider than the USAs healthcare system.The import ance of economic evaluations that are used to provide robust information to the NICE committee to aid in policy making decisions that are concerned with the allocation of the scarce resources of the NHS have been discussed. Also the principles and an appropriate method for conducting an economic evaluation of breast cancer screening was illustrated in this report.Finally, the importance of the breast cancer screening programme for women aged between 50-64 years was examined and the report demonstrates why the screening programme is so important and why this age group has been chosen for screening.