SAME DIFFERENCE A COMPARISON OF INTERNATIONAL HEALTH SYSTEMS ENGLAND • U.S. • GERMANY INTRODUCTION ........................................................................................................................01 HEALTHCARE IN ENGLAND, THE U.S. AND GERMANY ....................................................02 THE CHANGING ENVIRONMENT .................................................................................. 08 COMMISSIONING RESPONSES .................................................................................. 13 CASE STUDY: UK........................................................................................................ 15 CHANGING CARE MODELS: PROVIDERS .......................................................... 16 CASE STUDY: U.S. .............................................................................................20 CHANGING CARE MODELS: PRIMARY CARE ............................................22 TECHNOLOGY ..........................................................................................24 CASE STUDY: GERMANY .....................................................................26 CONCLUSION ..................................................................................28 UNDERSTANDING THE TERMS WE USE ...................................30 REFERENCES ............................................................................ 31 PRODUCED BY THE BDO CENTRE FOR GLOBAL HEALTHCARE EXCELLENCE & INNOVATION NOVEMBER 2016 A COMPARISON OF INTERNATIONAL HEALTH SYSTEMS | SAME DIFFERENCE 01 INTRODUCTION A CHANGING LANDSCAPE Healthcare stories dominate headlines around the world. Recently there has been a focus on increased demand caused by growing and ageing populations, the introduction of new technologies and the need to contain spread of conditions such as obesity and diabetes. Whether it’s the Affordable Care Act in the U.S., reforms of the English National Health Service (NHS) or the Hospital Structure Act in Germany, healthcare systems are constantly evolving their local responses to address these international problems. Using BDO’s experience working with and advising clients in these countries, this paper provides an insight into factors that are currently impacting on their healthcare systems and how the countries are adapting to meet the common challenges. The paper identifies three key themes which are significantly impacting the design and delivery of healthcare across the three countries: Although there will always be local CHANGING ENVIRONMENT differences, we think the paper reveals a 01 Significant demographic shifts, financial and political pressures and significant degree of similarity between disruption through new market entrants and technology. the challenges facing England, the U.S. and Germany and the approaches that can be taken to address them. CHANGING PAYER/COMMISSIONER BEHAVIOR We hope the paper will facilitate the transfer 02 A shift in how those who commission and pay for healthcare organise of learning between these nations and to coverage that incentivizes improved quality and safety outcomes. other areas facing similar challenges with their healthcare systems. CHANGING CARE MODELS A trend towards integrated working across acute, community, primary and 03 mental health settings which breaks down traditional silos and promotes place and person-centred care. STEVE SMURTHWAITE PATRICK PILCH ALEXANDER MORTON PARTNER, MANAGING DIRECTOR, PARTNER, BDO UK BDO USA BDO GERMANY +44 (0)20 7486 5888 +1 212-885-8006 +49 221 97357-158 [email protected] [email protected] [email protected] 02 SAME DIFFERENCE | A COMPARISON OF INTERNATIONAL HEALTH SYSTEMS HEALTHCARE IN ENGLAND, THE U.S. AND GERMANY We have chosen to compare ENGLAND CLINICAL COMMISSIONING GROUPS healthcare systems in England, the The National Health Service is the public Clinical Commissioning Groups (CCGs) U.S. and Germany because they have healthcare system in the United Kingdom. purchase medical treatment and related broadly similar cultural, political One of the key pillars of the welfare state, it services from healthcare providers, including was introduced in 1948. but not limited to: and economic systems. However • Urgent and emergency care they operate completely different Funded largely through taxation, medical treatment in the NHS is free at the point of • Elective hospital care funding and delivery processes for delivery for patients who are UK citizens and • Rehabilitation care their healthcare commissioning and those 'ordinarily resident' in England, which • Community health services provision and there may be benefits includes citizens of the European Economic Area (EEA). • Mental health and learning disability from understanding the approaches services. being developed in each country in There are limited exceptions where patients may be charged for pharmacy prescriptions, CCGs were established under the UK’s Health dealing with the challenges they face. dental treatment and certain non-routine and Social Care Act 2012 to assume the role blood tests. of primary payer/commissioner for health services. CCGs are clinically led groups that Approximately 15% of healthcare spend in include all of the General Practices (GPs) in the UK is by insurers and private consumers. their geographical area. The aim of this is to Two-thirds is private medical consumption give GPs and other clinicians the power to eg pharmacy, and the rest is private medical influence commissioning decisions about local 1 insurance. services for their patients. There are 209 CCGs Health policy in England is directed by the covering the whole of England. Secretary of State for Health, an elected CCGs receive their share of national funds for Member of Parliament, and implemented by purchasing healthcare from the DH based on a the Department of Health (DH). formula which includes population, morbidity Readers should note that only the NHS and economic indicators. in England is under direct purview of the national government. The NHS in Scotland, PRIMARY CARE Wales and Northern Ireland are accountable Primary care is most people’s first point of to their own governments and have slightly interaction with health services, and accounts different systems. This paper will focus on for 90% of patient interaction.2 The term is England. Where possible it will use data from often used interchangeably with GP Practices, England, however there are cases where this is however it also includes dental practices, unavailable and so the UK figure has been used. community pharmacies and optometrists with retail outlets. A COMPARISON OF INTERNATIONAL HEALTH SYSTEMS | SAME DIFFERENCE 03 Initially primary care was commissioned by local health economy to deliver a range U.S. NHS England but increasingly this is being of community based services including While both England’s and Germany’s undertaken by CCGs, with some specialist district nursing, community clinics and healthcare systems are largely publicly services continuing to be commissioned rehabilitation funded, the U.S. healthcare system is centrally. • 10 ambulance trusts (including 5 NHS supported through private insurance and FTs) – Ambulance trusts deliver urgent government insurance programmes as well as TRUSTS and planned healthcare and transport people paying for services 'out-of-pocket'. Hospitals and other healthcare providers in services to patients, taking an average 17.1 Total private health expenditures in the U.S. England are mainly managed by NHS Trusts emergency calls per minute in 2014/2015. represented approximately 33% of total or NHS Foundation Trusts (FTs). These Trusts There is also a relatively small private sector healthcare spend in 2014. Most Americans provide a wide spectrum of care, including delivering diagnostics, elective care and access private health insurance through their acute, community, mental health and rehabilitation. employers as well as through state sponsored ambulance services. health exchanges. The federal government All NHS Trusts and NHS FTs are publicly SOCIAL CARE remains the largest payer for services for the owned and managed. Foundation Trusts differ The majority of social care is currently provision of care under the Medicare and from other Trusts in that they are independent commissioned by municipal councils which Medicaid program, which covers almost 25% 4 legal entities and have unique governance are not part of the NHS. Councils may also of Americans. arrangements, enabling greater decision provide social care themselves our outsource Medicaid is a federal and state programme making over finances. However, regulators services to the private sector. administered through the Centers for Medicare may remove these ‘freedoms’ if their financial and Medicaid Services (CMS) and provides or quality performance is assessed as publicly funded healthcare coverage to low- ‘inadequate’.3 income individuals that financially qualify. At time of writing, there are: Medicaid is jointly funded by the federal and • 154 acute non-specialist trusts (including state governments and administered by state 101 NHS FTs) - Hospitals employ a governments. Medicaid provides payment significant part of the NHS workforce, with for medical and behavioral health care from some providing regional and specialist primary care to long-term medical coverage services and custodial care costs. • 56 mental health trusts (including 43 NHS Medicare is a federally funded and FTs) - Mental health trusts provide health administered programme also administered