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2011.02.17

The overview of the healthcare reform in the Cameron Administration

  • Megumi Kashiwagi
  • Research Director
    Megumi Kashiwagi
  • [Expertise]
    Public Finance and Social Security

The new coalition government came to power in the UK last June for the first time in fifteen years. The Cameron administration announced an austerity plan that would reduce the budget deficit in relation to GDP will be 1.2% by 2015 compared to 11.3% in 2009/10 as soon as he took office. It was decided to raise tax and cut expenditure. The 2010 Spending Review was published in October where it was announced they will cut the budget by £81bn by 2014. Specifically, department budgets other than health and overseas aid will be cut by an average of 19% over four years. The Child and Working Tax Credits will be frozen for three years. Housing subsidy will be reviewed. The UK government is therefore looking at middle and long-term solutions to their deficit problems. Introducing immediately the combination of raising tax and cutting expenditure will be a good reference in Japan. The UK citizens are complaining about the policy, but a fiscal restructuring is absolutely necessary.

However, the position of health is slightly difficult. The NHS allocated a 0.1% increase from2011 to 2014 while achieving a 45% reduction in management costs.

The UK was a birthplace of the NHS(National Health Services)and although its residents often criticize it, they are also very proud of what it stands for. Past governments treaded very carefully with the NHS policies and the Cameron's coalition government is no exception to this. The sustainable healthcare policy decides a life of a government.

Cameron's slogan is "Big Society". He thinks that citizens can take responsibility for their life and in addition they can be socially and environmentally responsible. That is, the traditional role of the state shifts to society. The reasons are 1)local authorities need to have more flexible operations based on the situation in each local area, 2) increasing local governments' and individuals' freedom is needed. Cameron would like to introduce autonomy and liberation to the NHS. Cameron's vision of health is illustrated in Table1.

Table 1 The Cameron's health policy
From Compliance To Commitment
States a minimum performance standard that everyone must achieve States a collective improvement goal that everyone can aspire to
Uses hierarchy, systems and astandard procedures for co-ordination and control Based on shared goals, values and sense of purpose for co-ordination and control
Threat of penalties/sanctions/shame creates momentum for delivery Commitment to a common purpose creates energy for delivery
Based on organizational
("If I don't deliver this, I fail to meet my performance objectives")
Based on relational commitment
("If I don't deliver this, I let the group or community and its purpose down")
Source: Gary Belfield and Helen Bevan (2010)

The white paper last June"Equity and excellence: Liberating the NHS"was written about autonomy and liberation as follows;

●Patient choice. Patients will have access to the information they want, to make choices about their care. They will have increased control over their own care records.

●"Payment by Results"

●To strengthen democratic legitimacy at local level, local authorities will promote the joining up of local NHS services, social care and health improvement.

●Spending decisions by local GP-led clinical consortia (from 2012)

●Consortia will control 80% of the NHS budget.

●Cutting bureaucracy. Cash savings of £20bn will be needed by2014, which will be reinvested to support improvements in quality and outcomes.

●They will radically delayer and simplify the number of NHS bodies, and radically reduce the Department of Health's own NHS functions. They will abolish quangos that do not need to exist and streamline the functions of those that do.

The Cameron's administration carries on previous healthcare policy course and aims to destroy political interests and change bad practices and systems through promoting local GP-led clinical consortia.

I took the NHS for example, it is important to undertake structural reform and reduce political and personal interest in order to reduce the fiscal deficit. Outdated systems can't survive in a global society because they can't respond flexibly to changes in society. The UK began to undertake structural reform for surviving in the age of globalization.

We have discussed about bad practices and systems since bid-rigging cases and the Social Insurance Agency deceived the public with its sloppy management of pensions. However, political interests, bad practices and bad systems still exist in Japan.

Moreover, we have to decrease the central government's role and promote local autonomy. Without this, local governments can't become independent and as a result, the budget amounts of central and local governments will continue to increase.

The UK's current administration policy is a good reference for Japan who is currently studying a regional system.


Reference
Gary Belfield and Helen Bevan (2010) The Transformation of England's National Service
Department of Health (2010) Equity and excellence: Liberating the NHS
HM Treasury (2010) Spending Review 2010, Cm7942

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