The last two days have brought contradictory and enlightening news about the favorite medical system of new CMS head Donald Berwick.  Over the weekend, the New York Times reported that Britain’s National Health Service would “decentralize,” a statement that some misunderstood as an end to the single-payer aspect of the system.  Instead of using committees to determine the use of resources, the new strategy proposes to put those decisions in the hands of general practitioners and patients:

Practical details of the plan are still sketchy. But its aim is clear: to shift control of England’s $160 billion annual health budget from a centralized bureaucracy to doctors at the local level. Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers.

The plan would also shrink the bureaucratic apparatus, in keeping with the government’s goal to effect $30 billion in “efficiency savings” in the health budget by 2014 and to reduce administrative costs by 45 percent. Tens of thousands of jobs would be lost because layers of bureaucracy would be abolished.

In a document, or white paper, outlining the plan, the government admitted that the changes would “cause significant disruption and loss of jobs.” But it said: “The current architecture of the health system has developed piecemeal, involves duplication and is unwieldy. Liberating the N.H.S., and putting power in the hands of patients and clinicians, means we will be able to effect a radical simplification, and remove layers of management.”

The health secretary, Andrew Lansley, also promised to put more power in the hands of patients. Currently, how and where patients are treated, and by whom, is largely determined by decisions made by 150 entities known as primary care trusts — all of which would be abolished under the plan, with some of those choices going to patients. It would also abolish many current government-set targets, like limits on how long patients have to wait for treatment.

This plan does not transform the NHS into anything else but a single-payer system.  English citizens still have to get their health care from the government.  However, the plan removes the rationing boards that have clogged the decision-making process and allows GPs and their patients to decide on the best course of treatment.

While that sounds great, it’s a recipe for disaster.  In a closed system like single-payer, the resources are necessarily limited.  This will increase demand while doing nothing to increase resources, which will create a deficit bomb bigger than anything already at NHS.  That’s probably why another shoe dropped yesterday at NHS:

An investigation by The Sunday Telegraph has uncovered widespread cuts planned across the NHS, many of which have already been agreed by senior health service officials. They include:

* Restrictions on some of the most basic and common operations, including hip and knee replacements, cataract surgery and orthodontic procedures.

* Plans to cut hundreds of thousands of pounds from budgets for the terminally ill, with dying cancer patients to be told to manage their own symptoms if their condition worsens at evenings or weekends.

* The closure of nursing homes for the elderly.

* A reduction in acute hospital beds, including those for the mentally ill, with targets to discourage GPs from sending patients to hospitals and reduce the number of people using accident and emergency departments.

* Tighter rationing of NHS funding for IVF treatment, and for surgery for obesity.

* Thousands of job losses at NHS hospitals, including 500 staff to go at a trust where cancer patients recently suffered delays in diagnosis and treatment because of staff shortages.

* Cost-cutting programmes in paediatric and maternity services, care of the elderly and services that provide respite breaks to long-term carers.

Dr. Donald Berwick proclaimed NHS a “treasure,” a comment that Republicans in Congress wanted to explore in Berwick’s confirmation hearing.  What would Berwick do under the pressures at NHS today, if such a crisis hit Medicare and Medicaid?  It’s no secret that both are facing these kinds of cost and resource issues.  Simply demanding more money won’t work, as the UK has discovered after sixty years of single-payer health care.

The best way to get pricing and cost equilibrium in the health-care market is to use competition and free-market economics.  That doesn’t mean the status quo ante ObamaCare, but an elimination of tax credits that favor third-party payers for routine care and the promotion of HSAs and full retail clinic pricing.  Until that happens, the governmental burdens will continue to create artificial shortages, and will mean higher costs, more government intrusion in our lives, and less accountability.