An IEA study* published today argues that consumers should take more responsibility in the fields of healthcare and drugs. The study, edited by LSE health policy expert Tony Hockley, shows how, in a range of areas, producers rather than consumers have too much control over the allocation of resources. Hockley comments, “Healthcare systems worldwide are facing important challenges, as their users change from being impassive recipients of services determined by third parties to active and interested consumers…It is no longer tenable to assume that what is good for one person in one part of a country is good for another person elsewhere.”

The study attacks existing health models in the UK and suggests that giving consumers greater power will lead to more productivity and innovation. Britain’s model of state health provision resulted in British developments such as hip replacements, new forms of leg ulcer treatments and palliative care being denied to British patients whilst they were rolled out in the rest of the world. However, the study warns that consumer led healthcare may cost more money. Co-payment by patients may be necessary. However, co-payment will make patient-led healthcare provision even more effective.

Much of the study focuses on policy related to the pharmaceuticals industry and the provision of drugs. In the UK the National Institute for Clinical Excellence (NICE) has an increasing role in determining which treatments are offered to all patients nationwide. This approach is diametrically opposed to the consumer-led drugs policy that we should be following.

One part of the study uses the latest statistical techniques on Swiss data to show that, if consumers had control of their own spending on drugs, they would be willing to pay much more to obtain new innovative treatments: on average they would be willing to pay 25% of the cost of the cost of healthcare. However, consumers are much less willing to pay for patented treatments when alternatives are available and are also willing to pay little for drugs to treat minor illnesses. The authors also found that there are massive differences in preferences across the population thus confirming that the UK “one size fits all” approach to medicine is unlikely to meet patients’ needs.

The study also applauds the practice of direct-to-consumer advertising by pharmaceutical companies which is currently banned in the EU. In the USA and New Zealand advertising plays an important role in patient education – particularly where “under treatment” of disease is a problem. The ban on advertising in the EU, “is at odds with the EU drive for a dynamic, knowledge-based society and its obligation to ensure a high level of health protection”, argues the study. In the UK, there is strong resistance to pharmaceutical companies providing information directly to consumers coming from entrenched healthcare interest groups.

The authors of the study were: Jim Attridge, Research Fellow, Imperial College, London; Frank Auton, Visiting Professor, University of Westminster; Nick Bosanquet, Professor of Health Policy, Imperial College, London, Dr. Andrew Lilico, Europe Economics; Mike Sedgley, Policy Analysis Centre, UK; Harry Telser, Plaut Economics, Switzerland; Peter Zweifel, Professor of Economics, University of Zurich. The study was edited by Tony Hockley of the London School of Economics.

Download the full study here.