Downton Abbey, Obamacare, and the Road to Socialized Healthcare

As the rightly acclaimed television series Downton Abbey unspools its final episode, some fans have criticized the producer's decision to devote so much time to a debate about the future of Downton's Cottage Hospital. The show makes the issue mostly personal with delightfully snippy exchanges between Violet, Dowager Countess of Grantham, who speaks for a way of life that is passing, and her cousin Isobel, widow and daughter of physicians and trained as a nurse during WWI, who is the voice of modernity. But underneath the repartee lies a serious and persistent issue: what should be the relationship of the community to the emerging age of high-tech, highly capitalized, and highly specialized medical system?

As Mary Kay Clunies-Ross, Senior Vice President of the Washington State Hospital Association, who has taken a keen interest in the show, told me, "They're asking the right questions. Who will be in charge? Will someone tell me what to do? Will we be able to continue to provide free care?"

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The US and British health systems, while dramatically different, have had to grapple with these same questions. And in their exploration they've discovered that case can be made for big and for small but the weight of evidence suggests that the optimum medical configuration is when high tech and specialization is in service to responsible and accountable community hospitals.

In 1859, in real life, Albert Napper opened the first cottage hospital in Cranley. As Doctor Irvine Loudon at Oxford University observed, it was "built explicitly as a warm, clean idealized version of the farm laborer's cottage in order to reassure patients." A familiar doctor would treat people in a familiar atmosphere. Communities rallied around the concept. Hundreds of cottage hospitals sprang up and over the decades evolved into relatively sophisticated operations, often with state-of-the-art medicine and surgery.

In a very early episode in the series a farmer John Drake was admitted to the hospital with a terminal case of Dropsy. Isobel suggested to a Dr. Clarkson they use a very new technique. He reluctantly agreed and Drake promptly revived. By 1925, the year in which the final season of the tv series is set, voluntary hospitals constituted about 40 percent of all hospitals. They were largely supported by contributions and staffed with volunteers. There were also government hospitals: The infirmaries that grew out of the much-despised workhouses of the 19th century. But to many people these remained unwelcome venue.

In 1913 the liberal/labour coalition passed a law that gave a cash benefit to workers ages 16-70 who earned below the poverty level and the right to receive medical treatment at no cost. (These benefits did not extend to their spouses or children.)

Early in the series Isobel asks Robert, Earl of Grantham, how the Downton Cottage Hospital was financed. He notes that his father had given the land and building and established an endowment and then he adds, "Mr. Lloyd George's new insurance measures will help." Violet is aghast. "Please don't speak that man's name, we are about to eat," she archly announces.

In 1925, despite the federal money cottage hospitals were still suffering losses. Demand was up while charitable contributions were stagnating, in part the result of the decline of the landed aristocracy. Meanwhile, the price of medical equipment was climbing.

Most hospitals filled the financial hole by introducing subscription medicine, a form of local and self-insurance. Many of these were based in the workplace. Some doubled down on their efforts to gain contributions. The Granthams have responded by opening their castle to paying visitors as a benefit for the hospital.

Some cottage hospitals merged with bigger regional hospitals. That is the focus of the ongoing debate in Downton Abbey. Will their cottage hospital merge with the larger Royal Yorkshire Hospital?

Some communities converted their voluntary hospital into a municipal hospital. That is what happened in real life when the city council of Bradford, located about 30 miles south of Downton's village of Ripon took over the running of hospital services in 1920.

Socialized Medicine and Community Hospitals

A Gallup poll in July 1944 found that 85 percent of former patients were satisfied with their hospital treatment. Two-thirds of these had been patients in voluntary hospitals. But the question of sustainable financing remained. Over 71 percent of Britishers said they would prefer a state-financed hospital system to one supported by contributions. At the stroke of midnight on July 4, 1948 they got their wish. The National Health Service came into operation. Hospitals became government hospitals. Doctors became employees or contractors. It was Violet's worst nightmare. In the series she declared another reason why she wants to maintain local control of Downton's Cottage Hospital, "For years, I've watched government take control of our lives. And their argument is always the same--fewer costs, greater efficiency. But the result is the same too--less control by the people, more control by the state. Until the individual's own wishes count for nothing. That is what I consider my duty to resist...Your great-grandchildren won't thank you when the state is all-powerful because we didn't fight."

That the NHS began operation on the American day of Independence would probably have struck Violet as a cruel joke. For to her it was a declaration of slavery, a sentiment that would make her at home with current Tea Party philosophy. Indeed, in 1961 Ronald Reagan opposed Medicare with a rant that would have made Violet proud, "One of the traditional methods of imposing statism or socialism has been by way of medicine....If you don't do this (oppose Medicare), one of these days you and I are going to spend our sunset years telling our children and our children's children what it was like in American when men were free."

The NHS made it possible for cottage hospitals to survive. But it didn't make that survival inevitable. Health policymakers were unsure about community hospitals. At almost every turn they undervalued their benefits and overvalued the benefits of centralization. In the 1990s the NHS announced a wave of closures. Communities fought back with equal resolve, writing petitions, packing public meetings, marches. Some were successful. Others were not. In Odiham a four-year battle against the closure of its community hospital resulted in its becoming financially independent. The town of Rye, East Sussex, after discovering that its pleadings fell on deaf ears in Whitehall, took matters into its own hands, bought the local hospital and land, improved it and managed it. That protest had the benefit of being led by a local resident named Sir Paul McCartney, who gave a million pounds to the community's initiative. "My mother was a nurse," McCartney told the Independent. "I've got a lot of time for nurses and doctors because of what I saw her go through. The NHS is something our tax money buys. It's like education. That was the deal, I always thought. We're finding now that it isn't quite the deal...."

British support for community hospitals has waxed and waned and waxed. In 2006 an Independent headline reported "Cottage hospitals to make a comeback." Eight years later a headline in the Guardian announced, "NHS must end mass centralization, says new boss"

But even while criticizing large, impersonal institutions for robbing people of "dignity and compassion" the Conservative government cut another 20 percent from the NHS budget. Dr. Mark Porter, the Chair of the British Medical Association's hospital consultants committee worries that the happy talk about reviving community hospitals is simply a justification for turning the clock back and not in a good way. "Very deliberately the government wishes to turn back the clock to the 1930s and 1940s, when there were private, charitable and co-operative providers. But that system failed to provide comprehensive and universal service for the citizens of this country. That's why health was nationalised."

Community Hospitals in the United States

The United States hospital system began much as it had in the United Kingdom--as a charitable, often church-related institution governed locally and staffed by volunteers.

A bill for national health insurance made significant headway in Congress about the same time the British Parliament enacted their first worker-based health insurance benefit, but ultimately failed when WWI made all things German, Kaiser, distasteful and after WWI the Red Scare undermined any further efforts. In 1946 Republicans took control of Congress in 1946, in part by charging that Truman's proposal for a single egalitarian medical system that included all classes (and races) was socialism. After Truman's surprise victory in 1948, he doubled down on national health insurance. The American Medical Association assessed its members an extra $25 each and launched the most expensive lobbying effort in American history. One of its pamphlets echoed Violet's warning, "Would socialized medicine lead to socialization of other phases of life? Lenin thought so. He declared socialized medicine is the keystone to the arch of the socialist state." If you think that sounds an awful lot like Ronald Reagan's rhetoric 13 years later it should. The AMA wrote his speech too.

At the same time the British were rolling out the world's first free universal health system that was based on citizenship, not premiums or payroll taxes, Truman's plan died in Committee. No political party in America ever again embraced a universal, national health insurance system.

After World War II Congress appropriated billions of dollars to build hundreds of mostly rural community hospitals. Many of these are now threatened. Since 2010 more than 50 rural hospitals have closed and over 280 across 39 states are vulnerable to closure.

In big cities, Community hospitals built a century before are closing. Detroit boasted dozens of hospitals in the 1960s. It now has four. Since 1988, Milwaukee County has lost its public hospital and five city hospitals. Since 1990 New York has lost more than 20 hospitals even as its population has grown.

From 1999 to 2008, according to the American Hospital Association the number of independent hospitals fell by 290 by mergers and bankruptcies.

Adding insult to concentration, most closures are occurring in poorer communities and in communities of color even while new fully equipped hospitals continue to open in the wealthier suburbs.

Federal rules are complicit in undermining the financial stability of community hospitals. The original health care law required states to expand Medicaid and the law reduced federal payments to hospitals that had been used to cover their costs of providing care to the indigent because the federal government believed many of those poor patients would now be under Medicaid. Tragically, the Supreme Court declared that provision unconstitutional and almost half the states have refused to expand Medicaid. The result is that in 2016 their hospitals will begin to lose federal revenues, putting a significant strain especially on many fragile rural hospitals. In states that had expanded Medicaid 8.5 percent of rural hospitals are vulnerable to closure, nearly doubled in non-expansion states, where 16.5 percent of rural hospitals are vulnerable to closure, according to iVantage Health Analytics.

Hospital administrators complain about too low reimbursement rates from federal health care programs. As one administrator told USA Today, "Commercial insurers reimburse the hospital $1.33 for every $1 spent on a patient, on average, while Medicare pays about 83 cents for every dollar spent, and Medicaid pays 80 cents for every dollar spent."

Many independent hospitals lack the clout to get higher payments from insurers and steeper discounts from suppliers because they aren't part of larger hospital systems, another peculiar aspect of the U.S. medical system.

The Benefits of Local

Some argue that the closure of community hospitals has not negatively affected health outcomes but those working in these hospitals vehemently disagree. One community hospital physician responded that the study "does not resemble my real world." The medical profession talks about the "golden hour" after heart attacks, trauma and stroke in which treatment is needed to prevent loss of heart muscle and brain tissue. Closing community hospitals often eliminates the ability to provide critical medical care within that hour.

The anecdotal information about the health impacts of closing community hospitals is not insignificant. Stewart-Webster Hospital had served the small town of Richland Georgia and surrounding farms for more than six decades. With only a week's notice it shut its doors in 2013.

A month after it closed Farmer Buren "Bill" Jones, 52, died of a heart attack. His family had to wait about 15 minutes for an ambulance to take him to a hospital 22 miles away, where doctors couldn't revive him. The closed hospital was 9 miles from his house, a distance his wife or daughter -- who performed CPR on him at home -- might have driven.

"I have heard our little hospital called a Band-Aid station, but that little Band-Aid station saved my father's life two times after heart attacks," says Mike Pryor, judge-executive of Nicholas County Ky., which lost its small, rural hospital a few months before.

Six days after a nearby hospital closed in Bellhaven, North Carolina Portia Gibbs died while waiting to be airlifted to a big-city hospital 80 miles away. A rural hospital that recently closed in Nevada moves the nearest hospital 100 miles away.

Empirical evidence suggests that smaller and more localized institutions increase operating efficiencies while not reducing quality. In 1976 one British doctor commonsensically addressed the economics of centralization, "If the small hospitals are closed it means that the district hospital will have to cope with all the patients suffering from ordinary uncomplicated complaints and needing comparatively simple operations. The district hospital is geared to deal with the most complicated type of case. It has sophisticated diagnostic and therapeutic equipment which may be totally unnecessary and wasted upon such patients. The cost per bed in the district hospital is vastly greater than that in the cottage hospital. There will be no economy."

To which one might add that new clinical and technological developments mean that services such as kidney dialysis, ultrasound and MRI scanning can be offered in small hospitals.

Studies that have looked at the comparative efficiency of big and small hospitals ignore the direct and indirect economic impact of a community hospital. Directly it tends to be one of the largest employers in town, especially in rural areas. Indirectly, economic development is hurt because of the negative image to businesses of communities lacking a hospital.

Studies also ignore the substantial community-wide out-of-pocket savings of more localized medical attention. (e.g. extra driving time and expense) And they ignore the also substantial collateral damage of community hospital closures. In 2005 University of California researchers looked at hospital closures in L.A. County between 1997 and 2002. Joe R. Hicks, Vice President of Los Angeles based Community Advocates Inc. writes, "They found that the closures overwhelmed staff and facilities at the county's four general hospitals. The closures triggered a stampede of patients to doctor's offices, clinics and emergency rooms. They increased the time and distance that patients had to travel to get to a healthcare provider. That meant that fewer patients saw doctors, fewer children had checkups, patients were less likely to seek and get preventive care, and there was a jump in the number of deaths from injuries and heart attacks. This virtually guaranteed that the number of people who suffered from acute illnesses would climb. These ailments are more costly to treat."

And then there is the unquantifiable satisfaction from the peace of mind of having a medical facility nearby where you know the personnel.

Doctors too have lost their independence and autonomy. Hospitals have been on a buying spree of physician practices for a decade. Why? Federal rules allow an office visit with a physician in a hospital outpatient department to be reimbursed at a rate 80 percent higher than the same procedure performed in a physician's office. In May 2013, the Denver Post reported on a patient who received the same cardiac stress test twice from the same cardiologist. The first time the physician was independent. The test cost about $2,100. The second test, performed a year later after the practice was purchased by a local hospital, cost more than $8,000, mostly because of an added facility fee by the hospital.

"Hospital acquisition of physician practices leads to higher prices," the Robert Wood Johnson Foundation concluded in 2012, and had not improved quality. It also concluded that physician-hospital consolidation has not led to either improved quality or reduced costs. Consolidations are undertaken "primarily for the purpose of enhanced bargaining power with payers."

"Doctors really don't want to sell their practices," says H. Christopher Zaenger, CHBC, chief executive officer of Z Management Group in Barrington, Illinois. "They do it kicking and screaming." Nevertheless, so many did that as of 2012, the majority of physicians were employees instead of owners.

In 2014 Medical Economics magazine intriguingly asserted, "Put simply, fighting to preserve physician autonomy may be one key to help rein in America's enormous medical bills,"

Obamacare and Community Hospitals

All of this brings back the key question: what is the optimum configuration of a medical system? Most might embrace the vision of a network of well-equipped and locally owned or controlled hospitals that are part of regional networks of larger more capital-intensive hospitals that focus on specialized treatments.

The new buzzword in the medical community is "affiliation." The key, as both Violet and Isobel might agree, is how to affiliate in a way that maintains local control and patient intimacy while adding the access to specialized treatments and expensive technologies. Cooperative agreements come in hundreds of varieties. Mary Kay Clunies-Ross of the Washington Hospital Association notes a common joke among health policymakers, "If you've seen one affiliation you've seen one affiliation."

One of the key strategies the Affordable Care Act has embraced to reduce healthcare costs is by encouraging Accountable Care Organizations (ACO), networks of doctors and hospitals that share financial and medical responsibility for providing coordinated care to patients in hopes of limiting unnecessary spending. The focus is on Medicare because it is a single-payer insurance program where the government can establish the rules directly. Each ACO has to manage the healthcare needs of a minimum of 5,000 Medicare beneficiaries for at least three years. At the heart of each patient's care is a primary care physician.

While ACOs are touted as a way to help fix an inefficient payment system that rewards more, not better, care, some economists warn they could lead to greater consolidation in the healthcare industry, which could allow some providers to charge more if they're the only game in town.

Kaiser Health News observes, "ACOs have become one of the most talked about new ideas in Obamacare." Some applaud it as a way to help fix an inefficient payment system that rewards more, not better care. But as Kaiser notes, "some economists warn they could lead to greater consolidation in the health care industry, which could allow some providers to charge more if they're the only game in town."

It is clear that Downton Abbey's cottage hospital will merge with Royal Yorkshire Hospital. Viewers will never discover what happens then. When a hospital is taken over by a system, the parent company typically replaces local board members. Physicians may end up with less say. "If you have a strong parent, they make all the decisions," says Donald Thieme, executive director of the Massachusetts Council of Community Hospitals. When the depression hits Britain, where will the Royal Yorkshire Hospital cut expenses first? Will the Downton Cottage Hospital survive?