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May 2, 2017

Council International Study Mission, Part One: Two Health Care Systems, One Challenge

Council International Study Mission, Part One:  Two Health Care Systems, One Challenge

This is the first in a three-part series highlighting the recent Nashville Health Care Council International Health Care Mission to the United Kingdom. Click here to read Part Two and Part Three

In a more than 15-year tradition of international study missions, few times and locations have presented a more dynamic backdrop for global learning and the exchange of ideas than London during the week of March 27, 2017.

To set the scene: As the delegation of more than 30 Council member executives entered the U.K., the U.S. House of Representatives pulled legislation to repeal the Affordable Care Act, reviving headlines about America’s need for a solution to address spiraling health care costs and the demand for increased access.

Meanwhile, the U.K. embarked upon “the most complex piece of constitutional and political change in more than 40 years” as the now-majority Conservative Party began its formal negotiations to exit the European Union, better known as Brexit, when it triggered Article 50 on March 29, 2017.

Later that week, the National Health Service (NHS), Britain’s beloved but financially challenged health care system, unveiled an update on the NHS Five-Year Forward View. This sweeping, much anticipated strategic plan is designed to address an anticipated £30 billion shortfall in funding and increased demand for access through efficiencies, lower administrative costs and increased use of technology.

Evoking Winston Churchill in his “two countries divided by a common language” statement, the U.S. and the U.K. face similar challenges: a new political majority and the need for a more sustainable, affordable health care system.

Study Mission Areas of Focus
Convening industry leaders to collaborate during such a transformative time is at the heart of the Nashville Health Care Council’s mission. Our international study missions are designed around three strategic goals: education, networking and promoting Nashville as the health care industry capital. During our time in the U.K., we brought together leaders to examine:

  • The Political and Media Landscape: an overview of the political and media environment in the U.K. and how it challenges the need to reform health care
  • The National Health Service:
    -Overview of how the system is organized, governed and funded
    -Key challenges and opportunities within the NHS
    -Quality and outcomes measurement
    -On-site visits to NHS health care facilities
  • Investing in the U.K.: the outlook from private equity and entrepreneurs
  • Innovation at Work: NHS and private-sector innovation in health care delivery and insurance
  • Nashville’s U.K. Success Stories: HCA Healthcare UK and Acadia Healthcare

The Changing U.K. Landscape: Brexit’s Impact
Spurred by immigration and sovereignty, Brexit is the single biggest issue currently impacting the U.K. Its reach cannot be overestimated. Already, for example, the value of the pound has dropped 15 to 18 percent. Leaders predict Brexit will consume the British government for the next two years, which is the timeframe leaders have to negotiate a formal exit from the European Union and develop new trade agreements with the countries within it.

The climate of uncertainty created by Brexit permeates across all sectors of the U.K.’s economy, from health care and government to immigration and business. It is also unsettling for the 7,000 to 8,000 U.S. companies with operations in the U.K., which have the single market very much at their heart. And, because 52 percent of the population (most of whom live in rural areas and are part of the Conservative Party) voted for Brexit, the country itself is split on the issue from a political perspective.

NHS: Political Football
Financial challenges at the NHS are the second-largest issue facing the U.K. Given the national pride British people share for the NHS (one speaker claimed, “It’s the closest thing we have to a national religion in England”), how to tackle the NHS’ challenges is a “hot political football.”

To gain an appreciation of this tension, consider that 78 percent of U.K. citizens believe their health system is the world’s best. Moreover, the NHS is among the top three things Brits are proudest of (along with the history of Great Britain and the Queen). Yet the majority say financial challenges at the NHS are the biggest problem facing the country.

The NHS, which was restructured in 2013 and will celebrate its 70th anniversary next year, receives £120 billion in annual funding, which is about 9 percent of Britain’s GDP. Private health care expenditures equate to roughly £40 billion, most of which is in the social (nonhospital) care setting.

Faced with a budget shortfall, the U.K. is trying to tackle debt and balance finances by 2021. All government departments must identify savings of 20 to 25 percent. Local government budgets for example, have been cut by 30 percent, which is particularly challenging because they pay for social care. This is intensified by a growing elderly population and inefficiencies in their care. For example, one out of every four care homes for elderly is predicted to close over the next four years. Meanwhile, 22 percent of occupied hospital beds in the NHS are occupied by elderly people who could be cared for by social care. And 70 percent of NHS trusts are in deficit.

Like the U.S. health system, NHS officials are searching for innovative ways to create efficiencies and economies of scale through closer coordination, increased use of technology and new models of care delivery. They’re looking to move from a volume-based to a value-based health system that ensures the highest quality of care to those they serve.

Stay tuned for “Part Two” of the Council’s report on the 2017 International Health Care Study Mission, to be published tomorrow. To view photos, click here.

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