EUROPE: Falling Sick: Britain's National Health Service

Once a world-renowned model of successful nationalized health care, Britain's National Health Service (NHS) now faces an uncertain future. Despite the best defenses of the Labour government, the Conservative opposition has outlined a number of inherent failures in the NHS: the lack of a family doctor

service, inefficient long-term care services, and diminished priority for cancer patients. Similarly, an independent King's Fund report from March 2004 blames the Labour government for failing to meet the public's priorities on elderly care, waiting times, and patient choices. Given the developed world's aging population and burgeoning demand for increasingly scarce health services, Britain must create a new, innovative framework for nationalized health care-a framework that developing countries will not overlook.

The Labour government claims responsibility for many of the improvements in the NHS since its landslide 1997 victory. Labour asserts that it will spend a higher percentage of GDP on health care than any other European country: 9.4 percent as opposed to EU average spending of 8 percent. However, this raises the question of whether the increased spending on health care is actually improving the system or only allowing service costs, namely wages, to keep pace with similar costs in other services-based industries in the British economy. Furthermore, Labour, claiming to have added 100,000 doctors and nurses since 1997, has declared that over 99 percent of patients will be able to see a general practitioner within 48 hours and has pledged to build 100 new hospitals by 2010. However, these promises are at this point merely rhetorical. Effective health care that is integrated into the dynamic global economy needs to deliver.

Britain's strong, services-oriented economy may explain deficiencies within the NHS. As services become more productive, the wage level must increase to maintain an adequate labor force; consequently, health care costs must also increase to prevent the loss of personnel to other economic sectors. Thus, the Conservatives argue that Labour's nearly 30 percent increase in spending in reality only constituted a 5 percent increase in the number of hospital treatments.

The Conservatives also contend that Labour's style of health care administration is far too centralized and bureaucratic, a major problem given Britain's aging population and growing rate of health care innovation. An aging population will increase demand for health care, and a lack of proper competition will make it difficult for hospitals to bring in new, more efficient technology. An inflexible, centralized system simply cannot handle this situation. To counter Labour's claims of having added 100,000 new doctors and nurses since 1997, the Conservatives declare that a record 30,000 nurses leave the NHS each year. As a result, the Conservatives propose to decentralize and privatize the health sector. These measures, both vital in keeping pace with the global economy, would allow centralized health systems more flexibility to improve quality and patient satisfaction.

Meanwhile, discontent continues to accumulate outside the political sphere. According to the King's Fund report, "There are still problems with a funding system that is perceived by the public to be complicated and unfair." Due to funding problems and rising costs in other services-based industries, the quality of Britain's NHS has not improved significantly under the Labour government. In 2000, the Royal Commission on Long-Term Care recommended that all personal care for the elderly in England be free at the start of treatment-a recommendation that was ultimately rejected. Currently, only the neediest elderly will receive publicly-funded assistance at home; those with "mild to moderate needs" must rely on alternative resources.

The outcome of the debate regarding Britain's NHS will have important political implications not just for the United Kingdom but also for the future of nationalized health care systems worldwide. Perhaps realizing the importance of decentralization and market flexibility, the Labour government has now implemented a fledgling Private Finance Initiative to relieve pressure on health care funding and improve the quality of care. However, this initiative has not been successful because the British people largely continue to rely on public health care. Paradoxically, it is partially Britain's robust services sector that causes the NHS to appear lackluster; in France and other European nations, nationalized health care appears to be thriving and effective, but their services sectors are far from noteworthy. Britain faces an interesting trade-off: maintain publicly funded health care and suffer a dampened economy, or take a chance on US-style private health care and have a more competitive economy. To the British voter, neither pill seems easy to swallow.