- Email: [email protected]
washington Scramble to fix the US health-portability law
DISPATCHES
LONDON
A new financial inqjection for the National Health Service
T
e UK Health Secretary was in no doubt. The extra E500 million for the National Health Service announced in last week‘s budget would produce “the highest ever increases in operations in the history of the N H S and the biggest ever cut in waiting lists”. The NHS Confederation, which represents health authorities and hospital trusts, seemed to back him up by suggesting that 400 000 patients could be treated with the extra money for the new financial year that starts on April 1. If the budget was Day One of a new Labour govemment, the Health Secretary would have every reason to be proud. But, alas, there has already been 10 months of Labour government, which fatally announced before the election it would stick to the tough spending limits set by its Conservative predecessors for the first 2 years. A funding crisis has dogged the Health Secretary since his first day in office. He tumed on his fiiends, both publicly and privately, who were urging the government to increase health resources. Yet the spending plans drawn up by the Conservatives when it seemed clear they were going to lose and Labour was already committed to following them, were the lowest for 30 years. They did not add up and the Conservatives would not have followed them. Spending has always increased over and above planning totals. For the first few years of Tory rule in the 1 9 9 0 ~the ~ health service has never been so generously funded because the Conservatives increased spending to ensure their restructured internal market system did not fail. In the 4 financial years between 1991 WASHINGTON
and 1995, the average real terms rise of revenue expenditure increased by 3.6% a year. In 1991-92 for the launch of their scheme, it was 7.2%. But in 1997-98, the rise was well below 2% and for 1998-99, in the lead up to Labour’s N H S reorganisation, less than 1% was planned.
“the highest ever increases in operations in the history of the NHS and the biggest ever cut in waiting lists” Belatedly, Labour moved in with a E300 million emergency package to
get the NHS through the winter which has just passed and a E1.2 billion promise of extra resources for the new financial year. Now they have added another E500 million for the new year, which financial experts calculate will restore the NHS to the growth rate of 2.7% in the 1990s. Medics and managers alike welcomed the new package. The chief executive of the NHS Confederation said the resources offered “a good chance of solving the waiting-list problem” but if other vital improvements were to be made, more would be needed. His comments were echoed by the leader of the health service managers and the British Medical Association both of whom pointed to the need for a long-term commitment of 3% annual increases to ensure sustainable improvements. The Health Department is engaged in a comprehensive spending review which is due to be completed this summer. Policy analysts hope the present ad hoc approach to funding will be replaced by something more sustained to allow planning. The Health Secretary announced
most of the extra resources would be spent on reversing the rise in N H S waiting lists. Labour arrived in office with an “early pledge” to reduce waiting lists by 100 000. It has now become clear that the “early pledge” was a promise that was made early, not a pledge to act early. Last month, the Health Secretary admitted his “embarrassment” over the continuing rise in waiting lists. Far from being cut, they have risen by more than 100 000 to a new record of 1.3 million as elective surgery took second place to ensure that there were no blocks to emergency care during the winter months. Now there is to be a new assault with each hospital trust being set “local targets” to shorten the national list with “rewards for those who hit their targets and sanctions for those who do not”. The Health Secretary warned that waiting lists would continue to rise for the next two quaiters but promised that they would be shorter within a year: “It’s an ambitious target but I am contident that, providing we do not encounter a dreadful winter or major epidemic, it is a target which can be met.” The balance of the extra moneyE97 million in England-will be directed to both helping people avoid going into hospital through more minor surgery being carried out in clinics or surgeries and streamlining hospital services, particularly day surgery through better booking systems. All that was left was for analysts to remind the Health Secretary that reducing waiting periods and creating clinical priority lists were more important than a crude assault on the general waiting list. Malcolm Dean
Scramble to fix the US health-portability law
Aar
report showing that insurers e finding ways to avoid selling coverage to those guaranteed it by a 1996 law has sent both President Clinton and lawmakers scrambling to find a fix. According to the General Accounting Office, many Americans who lose their group health-insurance benefits are having difficulty purchasing individual policies, the very situation the Health Insurance Portability and Accountability Act was intended to alleviate. The GAO found insurers charg-
THE LANCET * Vol351 *March 28,1998
ing premiums up to six times their standard rates, and discouraging insurance agents &om selling to individuals covered by the law by decreasing or denying sales commissions. In some cases, insurers have simply delayed processing applications for so long that the individuals are no longer protected by the law, which requires new coverage to begin within 63 days after group coverage ends. The Clinton administration responded on March 18 with a letter to insurers warning them that
delaying applications or denying commissions is “inconsistent” with the law and w i l l be punished. But the law is silent about rates insurers may charge, with that regulation left largely to the states. That is not good enough for Congress, however. Senator Edward Kennedy (Democrat, Massachusetts), one of the original law’s co-authors, has introduced a bill to cap premiums at no more than 150% of the insurance companies’ standard rate. Julie Rovner
965
LONDON
A new financial inqjection for the National Health Service
T
e UK Health Secretary was in no doubt. The extra E500 million for the National Health Service announced in last week‘s budget would produce “the highest ever increases in operations in the history of the N H S and the biggest ever cut in waiting lists”. The NHS Confederation, which represents health authorities and hospital trusts, seemed to back him up by suggesting that 400 000 patients could be treated with the extra money for the new financial year that starts on April 1. If the budget was Day One of a new Labour govemment, the Health Secretary would have every reason to be proud. But, alas, there has already been 10 months of Labour government, which fatally announced before the election it would stick to the tough spending limits set by its Conservative predecessors for the first 2 years. A funding crisis has dogged the Health Secretary since his first day in office. He tumed on his fiiends, both publicly and privately, who were urging the government to increase health resources. Yet the spending plans drawn up by the Conservatives when it seemed clear they were going to lose and Labour was already committed to following them, were the lowest for 30 years. They did not add up and the Conservatives would not have followed them. Spending has always increased over and above planning totals. For the first few years of Tory rule in the 1 9 9 0 ~the ~ health service has never been so generously funded because the Conservatives increased spending to ensure their restructured internal market system did not fail. In the 4 financial years between 1991 WASHINGTON
and 1995, the average real terms rise of revenue expenditure increased by 3.6% a year. In 1991-92 for the launch of their scheme, it was 7.2%. But in 1997-98, the rise was well below 2% and for 1998-99, in the lead up to Labour’s N H S reorganisation, less than 1% was planned.
“the highest ever increases in operations in the history of the NHS and the biggest ever cut in waiting lists” Belatedly, Labour moved in with a E300 million emergency package to
get the NHS through the winter which has just passed and a E1.2 billion promise of extra resources for the new financial year. Now they have added another E500 million for the new year, which financial experts calculate will restore the NHS to the growth rate of 2.7% in the 1990s. Medics and managers alike welcomed the new package. The chief executive of the NHS Confederation said the resources offered “a good chance of solving the waiting-list problem” but if other vital improvements were to be made, more would be needed. His comments were echoed by the leader of the health service managers and the British Medical Association both of whom pointed to the need for a long-term commitment of 3% annual increases to ensure sustainable improvements. The Health Department is engaged in a comprehensive spending review which is due to be completed this summer. Policy analysts hope the present ad hoc approach to funding will be replaced by something more sustained to allow planning. The Health Secretary announced
most of the extra resources would be spent on reversing the rise in N H S waiting lists. Labour arrived in office with an “early pledge” to reduce waiting lists by 100 000. It has now become clear that the “early pledge” was a promise that was made early, not a pledge to act early. Last month, the Health Secretary admitted his “embarrassment” over the continuing rise in waiting lists. Far from being cut, they have risen by more than 100 000 to a new record of 1.3 million as elective surgery took second place to ensure that there were no blocks to emergency care during the winter months. Now there is to be a new assault with each hospital trust being set “local targets” to shorten the national list with “rewards for those who hit their targets and sanctions for those who do not”. The Health Secretary warned that waiting lists would continue to rise for the next two quaiters but promised that they would be shorter within a year: “It’s an ambitious target but I am contident that, providing we do not encounter a dreadful winter or major epidemic, it is a target which can be met.” The balance of the extra moneyE97 million in England-will be directed to both helping people avoid going into hospital through more minor surgery being carried out in clinics or surgeries and streamlining hospital services, particularly day surgery through better booking systems. All that was left was for analysts to remind the Health Secretary that reducing waiting periods and creating clinical priority lists were more important than a crude assault on the general waiting list. Malcolm Dean
Scramble to fix the US health-portability law
Aar
report showing that insurers e finding ways to avoid selling coverage to those guaranteed it by a 1996 law has sent both President Clinton and lawmakers scrambling to find a fix. According to the General Accounting Office, many Americans who lose their group health-insurance benefits are having difficulty purchasing individual policies, the very situation the Health Insurance Portability and Accountability Act was intended to alleviate. The GAO found insurers charg-
THE LANCET * Vol351 *March 28,1998
ing premiums up to six times their standard rates, and discouraging insurance agents &om selling to individuals covered by the law by decreasing or denying sales commissions. In some cases, insurers have simply delayed processing applications for so long that the individuals are no longer protected by the law, which requires new coverage to begin within 63 days after group coverage ends. The Clinton administration responded on March 18 with a letter to insurers warning them that
delaying applications or denying commissions is “inconsistent” with the law and w i l l be punished. But the law is silent about rates insurers may charge, with that regulation left largely to the states. That is not good enough for Congress, however. Senator Edward Kennedy (Democrat, Massachusetts), one of the original law’s co-authors, has introduced a bill to cap premiums at no more than 150% of the insurance companies’ standard rate. Julie Rovner
965