We’re all questioning the healthcare in the US. We’re debating going to a totally free market system or changing to a socialized system. We are debating what role the government should play in our healthcare. But the one thing we agree on is that we need major reform in the US. The next president elected has to face the issue and we need to make some decisions. We can’t continue on the path we’re on or else we’ll fall into more trouble. Thus this is an interesting post about the British healthcare system.  Until we have change we’ll be continually analyzing, discussing, what should happen or could happen.

But I have a great guest post from Plonkee of Plonkee’s Money.  I really appreciate the post and am happy to have an opportunity to share with you her thoughts on the subject. Check out her blog.

Guest Post: Plonkee’s Healthcare

In my role as resident English person in the personal finance blogosphere, I’m occasionally asked questions about British politics, lifestyle, and slang. Sometimes these turn into posts on my own blog, other times “vat tax” guest posts for someone else. This time, it’s all about healthcare and socialist governments in the UK.

Now, contrary to popular opinion on both sides of the pond, the UK is not the same as America but with red double decker buses, and the US is not the same as Britain but with yellow taxis. Universal healthcare might be a contentious issue in the US, but in the UK (as with the rest of Europe) it’s an accepted and uncontroversial public service. A lot like universal education.

In fact, my best description of how the National Health Service (NHS) works is to compare it to free education. Like basic schooling it’s paid for by taxes and is essentially free at the point of use. There are some things that you do pay for - out-patient prescriptions are a flat rate of £7.10 (~$12.50) and dentistry is charged in several bands, a basic exam costs £16.20 (~$28.70). Children, expectant and post-partum mothers do not pay any charges, and there is means-tested help for those on low incomes.

Almost everything is available on the NHS from ambulance services, organ transplants, free contraceptives, and infertility treatment.

In the UK, any newspaper article critical of the NHS invites a flurry of responses from people commending the service of their local hospital, without whom they, their mother/father/brother/daughter/son etc would surely have died. All these people are right. In general emergency care is excellent, there are several centres of international excellence including Great Ormond Street Hospital and Stoke Mandeville hospital, and infant mortality rates are lower than those in the US.

However, this does not mean that the system is perfect. Many of the problems are undoubtedly caused by the centralised organisation - if I were starting from scratch, I wouldn’t nationalise the hospitals, just the method of payment. For some services there are long waiting lists - in particular dentistry, and physiotherapy, but also some types of non-emergency surgery like hip replacements and so on. NHS hospitals are not 5 star hotels - you get bed in a ward, not a private room with a tv and the food legendarily sucks.

What do you do? Well, much like education, if you don’t like what’s being offered for free, you pay for it. You can get supplementary health insurance to cover the use of private hospitals, or private wards in NHS hospitals. You can also pay by cash for elective procedures, there are private maternity hospitals, and private midwives (in the UK these are extremely well-qualified individuals). Most people who can afford to pay for private dentistry because it is difficult to find an NHS dentist, and pay for physio for a minor injury as waiting lists are so long.

The British system is popular in the UK, even though most people think that it could be reformed. It would be political suicide to suggest that the core principles of the NHS:

• that it meet the needs of everyone,
• that it be free at the point of delivery, and
• that it be based on clinical need, not ability to pay

be altered. As my favourite *claim to fame* it is the 4th largest direct employer in the world (after the Chinese army, WalMart and Indian Railways). The operating budget is just over £90bn (~$160bn) which is just under £1500 per head (~$2,610). To put that into context, in the US federal, state and local governments spend just over £1,000bn on healthcare, around $3,300 per head.I heard a rumour that there was going to be an election in the autumn, so I looked it up on the internet and found that yes, Canada are having elections on the 14th October. Then someone else mentioned that the small country just to the south of Canada was also having elections a little bit later on in the year, and that one of the issues was universal healthcare.

As I said, in the UK universal healthcare is uncontroversial, and in fact the US system is often cited as why the market is not a good example. But, there’s probably a lesson to be learned for the NHS too. No other country has a similar system to the US, nor do they have a similar system to the UK - there’s probably a reason for that.

Personally, I favour something like the Dutch system, where everyone pays for basic insurance on a nominal/sliding rate system, and then you can top that up with cash, or additional insurance. The advantage in making health insurance universal is that it pools the risk across the whole population, it severs the link between employment and healthcare. The advantages of having to pay for other services is that it enables proper choice, and gives people more buy-in to their own healthcare.

I suspect that many Americans think differently to me. But then they always do, America and Britain are much more different than you might think.