World View: Britain’s National Health Service (NHS) Faces Existential Financial Crisis

This morning’s key headlines from GenerationalDynamics.com

• Criminality and fraud in Veterans Administration and Obamacare
• Britain’s National Health Service (NHS) faces existential financial crisis
• Summary of Obamacare findings

Criminality and fraud in Veterans Administration and Obamacare

Veterans Affairs plaque

I have told a number of people that I was researching an article on Healthcare.gov, the greatest IT (information technology) disaster in history. I have in fact found a great deal of criminal fraud in the Healthcare.gov web sites software development projects, but I haven’t finished the article yet because I have expanded it substantially to include an economic analysis of Obamacare. I hope to have it done within the next couple of weeks.

By way of introduction, it is worth reviewing what has happened with the Veterans Administration healthcare system.

In 2006, far-left NY Times columnist Paul Krugman wrote the following, describing the Veterans Administration (VA) health care system:

[The VA’s] success story is one of the best-kept secrets in the American policy debate. … [Conservative] pundits and policy makers…can’t handle the cognitive dissonance.

Krugman is not known for his intelligence, or for much else besides his loony left ideology. After Krugman wrote this, the horror show of the VA health system began to come out in the media.

We now know that the VA system is loaded with fraud, corruption, lying, and unbelievably poor health care services. Since this has been well-reported in the media, we won’t do more than list some of the well-documented problems:

• Veterans on waiting lists had to wait many months to get medical services, while administrators lied and provided phony waiting lists to the VA.
• Workers at VA hospitals were often ordered by their superiors to lie to VA about waiting times.
• Dr. Jose Mathews, former chief of psychiatry for the St. Louis VA Health Care System, was bullied, demoted and harassed by superiors and co-workers when he became a whistleblower and reported that psychiatrists there were seeing patients less than four hours a day. Mathews also discovered that false data was being entered into veterans’ medical records.
• Another whistleblower, Dr. Katherine Mitchell, medical director of the Iraq and Afghanistan Post-Deployment Center of the Phoenix VA, told Congress of long and secret waiting lists.
• In Chicago, employee bonuses were tied to manipulating wait time data.

The bottom line is that apparently no one in the VA actually gave a damn about medical care for veterans.

This appears to be exactly what is happening in Obamacare, according to the research that I’ll be reporting within a couple of weeks.

There will also be a separate article posted on my web site on academic research into the general problem of sabotage, fraud and subversion in software development projects. This will be of interest to academic researchers and software development managers. Forbes (23-May-2014) and St Louis Today (8-Jul-2014)

Britain’s National Health Service (NHS) faces existential financial crisis

UK National Health Service (NHS) launch leaflet, July 1948

Those who favor copying the United Kingdom’s single-payer National Health Service (NHS) should be aware that on Monday it was announced that NHS is facing an existential financial crisis. NHS health care providers are forecasting a deficit of over $3 billion in 2015-16. The deficit is growing rapidly, and the NHS is being required to find $35 billion in “efficiency savings” by 2020.

According to a letter sent on Monday to NHS from David Bennett, head of the Monitor agency that monitors the NHS:

As you know, the NHS is facing an almost unprecedented financial challenge this year. Current plans are quite simply unaffordable. As I have said before, if we are to do the best we can for patients we must leave no stone unturned in our collective efforts to make the money we have go as far as possible.

This week, the NHS is being told to take the following steps in response to the financial crisis:

• Staffing: Hospitals and other providers are being told to fill vacancies “only where essential,” in order to cut down the number of people providing medical services.
• Waiting times: Currently, hospitals have to see 90% of patients requiring an overnight stay within 18 weeks of a referral from a GP (General Practitioner). Those waiting time requirements will be scrapped.
• Waiting times: Currently, 95% of day patients must be seen in the same timeframe. Those waiting time requirements will also be scrapped.

These minor tweaks to the NHS system will not come anywhere close to providing the required $35 billion in “efficiency savings.” A massive restructuring will be required.

According to the Labor Party’s health secretary Andy Burnham:

This is a sign of a serious deterioration in NHS finances. It suggests that the financial crisis in the NHS is threatening to spiral out of control and hit standards of patient care.

The suggestion that hospitals can ignore safe staffing guidance will alarm patients and the Government must decide if it will overrule this advice.

Morale in the NHS is already at an all-time low and doctors have lost confidence in the Health Secretary.

It will raise further questions about how the Government can possibly fulfil commitments on a seven-day NHS without the money to back it up.

Not surprisingly, with so much money involved, the NHS is filled with criminality and fraud, just as in the case of Obamacare and the Veterans Administration. A study last year by Portsmouth University found that fraud alone is costing the NHS something like $8 billion a year. Some of the fraudulent activities include:

• Non-payment of prescription charges by patients
• Medical professionals claiming for work they have not done
• Dentists making claims for non-existent patients
• GPs (General Practitioners) falsifying records to claim extra payments
• Consultants putting in for bogus overtime.

Not surprisingly, “the NHS in recent years has stopped measuring its own losses,” according to the report. When an organization stops collecting early warning data, that’s a sure sign that a problem is turning into a full-scale disaster.

Britain’s dentistry services have already become so bad that many people are buying “do-it-yourself (DIY) dentistry kits” that can be obtained from local stores. According to one resident, “DIY dentistry is fairly common round here. They sell a lot of those first aid kits… and you’ve got people taking care of their whole family’s teeth with them.”

The NHS financial crisis is so enormous that nobody doubts that it will seriously impact patient care. The NHS is facing a massive restructuring.

By American standards, an 18-week waiting time is ridiculously long, and now the NHS is scrapping even that waiting period. Any American who uses the NHS as a model has to be a total moron. Independent (London) and BBC and Independent (London) and BBC (24-Mar-2014) and Guardian (3-Apr-2015)

Summary of Obamacare findings

The following is a brief summary of my findings that I will be posting within a couple of weeks:

• The core problem with Healthcare.gov was that each web site should have cost $10-20 million to develop, but the Obama administration provided $150-200 million per web site. In order to spend all that money, contractors hired thousands of programmers, many of them incompetent. The resulting disaster enormously humiliated the Obama administration, which was well deserved.
• Healthcare.gov web sites are already outdated technology, so there’s no chance of upgrading to mobile phones and tablets. Also, with a code base of hundreds of millions of lines of code, the web sites are unsupportable. In the endgame, these dinosaur web sites will have to be thrown out.
• The Medicaid expansion made millions of new people insured, creating a major financial crisis in Kentucky and other states. Obamacare imposed what I call “Nixon-Obama price controls,” to emphasize the fact that the imposed Medicaid price controls are as destructive to our economy as Nixon’s price controls in the 1970s that destroyed the economy for a decade.
• Obamacare confiscated the $710 billion Medicare insurance fund that workers have been paying into for decades, and used it to fund a bunch of Obamacare entities. These entities were supposed to be self-sustaining by now, as the Medicare money runs out, but they’re almost all financial disasters: Obamacare exchanges, Obamacare risk corridors, Obamacare co-ops, and Obamacare web sites. In the endgame, these will all have to be thrown out.
• The $710 billion Medicare insurance fund has essentially been thrown into the garbage, with almost nothing to show for it.
• The number 12 million of “newly insured” people is essentially fraudulent because it does not take into account the many millions of people who are effectively uninsured, either because they are on Medicaid and cannot find a doctor who takes Medicaid, or because they are on a standard “bronze” plan with a $10,000-12,000 deductible, and have to pay all their medical bills anyway.
• Before Obamacare, any uninsured person could get medical care in a hospital emergency room. The Obamacare endgame is that the only place where a Medicaid patient will get medical care is in a hospital emergency room, where they’ll get $50 worth of medical services, since that is the Medicaid reimbursement to the hospital. As before, only people with private health insurance will get good medical care.

UK’s National Health Service, Veteran’s Administration health care, and Obamacare all share the same things: fraud, criminality and worsening health care. Unfortunately, there’s little chance that any lessons will be learned.

By the way, I’m perhaps uniquely qualified to do this analysis. I’m an apolitical, non-ideological, highly analytical writer. I have decades of experience in software development (Resume: http://www.jxenakis.com/resume). And I also have decades of experience as a tech journalist, including two years as Boston Bureau Chief of InformationWeek Magazine, and ten years (part time) as Technology Editor for CFO Magazine (Examples: http://ww2.cfo.com/author/john-xenakis/).

KEYS: Generational Dynamics, Veterans Administration, Obamacare, Healthcare.gov, Paul Krugman, Jose Mathews, Katherine Mitchell, Britain, National Health Service, NHS, David Bennett, Andy Burnham, Portsmouth University, Medicaid, Medicare insurance fund, Obamacare exchanges, Obamacare risk corridors, Obamacare co-ops, Obamacare web sites
Permanent web link to this article
Receive daily World View columns by e-mail