Adjustments made by Feachem et al | ||||
---|---|---|---|---|
NHS (UK) | KP (US) | Errors in adjustments | Effect on costs | |
Gross expenditures/revenue | £58 500 m | $14 200 m | ||
Adjustments for differences in | ||||
Capital depreciation | −£1000 m | −$557 m | Cost of capital in the NHS underestimated by £2 billion.a | Increase NHS costs |
Profits (more correctly surplus) | £0 | −$668 m | NHS equivalent of ‘profits’ is capital charges, consisting of depreciation and dividends payable on capital. The dividend element in NHS capital charges are not deducted from NHS costs. | Reduce KP costs |
Adjustments for differences in benefits | ||||
Dental care | −£1190 m | −$10 m | Deduction for NHS (UK) dental costs refers to England only. | Increase NHS costs |
Long-term psychiatric care | −£3250 m | $0 | Costs for NHS long-term psychiatric care not found in reference cited. | Unknown |
Other services | User charges for healthcare services not included in Kaiser's costs. No deduction from NHS costs for wider services not provided by Kaiser. | Reduce KP costs | ||
Increase NHS costs | ||||
Supplementary private health insurance | +£2630 m | $0 | No adjustment to Kaiser's costs for supplementary insurance taken out by their members (up to 12% of members insure for care outside the health plan).21 | Reduce KP costs |
Adjustments for differences in special activities/circumstances | ||||
Indirect service obligations | −£3587 m | −$497 m | Indirect costs integral to a health system should not have been deducted: indirect costs borne by US public health authorities should have been added to Kaiser's costs. | Reduce KP costs |
Administrative costs | £0 | −$586 m | No deduction for NHS administrative costs. £1.9 billion should be deducted for England, with further deductions for Scotland, Wales and Northern Ireland.32 | Reduce KP costs |
Increase NHS costs | ||||
Net expenditure after adjustments | £52 103 m | $11 900 m | ||
Per capita expenditure | £876 | $1951 | ||
Adjustment for differences in medical cost environment: | ||||
Conversion at rate of exchange | Multiply by 1.6 £876 to $1402 | $0 | Conversion of £ to $ should have been either in purchasing power parity at 1.52 or at market exchange rate of 1.6, but not both. | Increase NHS costs |
Conversion at health sector | Multiply by 1.52 | Purchasing power parity health sector cost conversion of 1.52 not found in reference cited. | ||
Purchasing power parity | $1402 to $2130 | $0 | ||
Adjustment for differences in populations | ||||
Age | −$260 | $0 | NHS age-specific per-capita costs used to reduce NHS costs by 12.2%. Age-specific per capita costs cited by the authors:18
| Increase NHS costs |
Socioeconomic group | −$106 | $0 | NHS per capita costs reduced by 5% using data from a study of the family expenditure survey:
| Increase NHS costs |
↵aCapital charges of £2.6 billion31 plus expenditure on general practice premises of £0.3 billion32 plus revenue consequences of private finance initiative schemes of £0.1 billion,33 minus the £1 billion deducted by Feachem et al.1 KP = Kaiser Permanente; NHS = National Health Service.