for certain categories of the poor financed jointly by the federal and state governments, with eligibility levels and benefit packages varying by state.

Health care financing programs have tended to focus on institutional acute care and, more recently, institutional long-term care rather than on community-based services. The result is a delivery system that is badly out of balance (dominated by acute-care hospitals and technology) and very expensive. It is estimated that 30 million to 35 million Americans have no health insurance, and there may be up to 70 million to 75 million with inadequate insurance. Individuals are more likely to be insured for inpatient or emergency care than ambulatory or primary care and are almost never insured for preventive services.

Finally, with over 13 percent of the gross national product going to health care costs, the major U.S. health policy for the past decade has been cost containment. As a result, there is an alphabet soup of financing and organizational models—PROs, DRGs, HMOs, PPOs, and IPAs—aimed at lowering costs and, to some degree, promoting quality control through regulatory frameworks and financial disallowances for unnecessary services. The primary focus of all these efforts has been the reduction of acute-care hospitalization.

Although scores of changes have been proposed to address some of the obvious problems in the U.S. system and some incremental progress is being made, large-scale change still seems very difficult.

The British government, on the other hand, under Margaret Thatcher, was not convinced that it was getting value for its money for health care expenditures that were slightly under 6 percent of the gross domestic product, and in December 1989 it launched a full-scale reform of the National Health Service (NHS), with only marginal new resources added. The goal of the reform was to introduce an internal market to an increasingly decentralized state-managed health care system to increase efficiency and consumer responsiveness.

When complete on April 1, 1994, in a little less than 4 years, government policy changes will have been largely implemented to alter the following:

  1. the basis for health service financial allocations for the NHS;

  2. the organizational structure and management of hospital and community nursing care;

  3. primary care and general practitioner (GP) services to increase incentives for prevention and shift power to GPs who act as fundholders and buy an array of hospital services on behalf of their patients; and

  4. the funding and delivery of community care for elderly, mentally ill, and learning-disabled individuals to increase deinstitutionalization and transfer management responsibility from the NHS to local government.

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