State-dominated healthcare systems are failing the poor and chronically sick. And Britain’s National Health Service (NHS) is one of the worst examples. It is plagued by waste, inefficiency, under-investment, rationing and constant political interference.

The result has been poor health outcomes for British citizens compared with those of other wealthy countries. Long waiting lists, high infection rates and under-nourished patients result from a bureaucratic system that misallocates resources in the absence of market prices and competition.

A new IEA study suggests that in many prosperous countries people are becoming increasingly disillusioned with government-controlled healthcare systems. It also concludes that many of the perceived problems associated with private healthcare provision are actually the result of government action.

In the USA, for example, federal and state authorities tightly regulate health insurance markets and enforce strict licensing rules that restrict the supply of medical staff. Costs have been hugely inflated by a controlled system that favours producer interests over consumers.

The authors show why private, market-based healthcare systems would be much more responsive to patients’ needs. They would provide strong financial incentives for better treatment and improved conditions.

In Singapore, 68% of healthcare expenditure is ‘market-based’ through a system of individual health savings accounts. Far better outcomes have been achieved at around half the cost (per capita) of the NHS.

The success of Singapore’s system results from a high degree of consumer choice. Spending decisions mostly take place between doctors and patients instead of between politicians and health bureaucrats.



Richard Wellings was educated at Oxford and the London School of Economics, completing a PhD on transport and environmental policy at the latter in 2004. He joined the Institute in 2006 as Deputy Editorial Director. Richard is the author, co-author or editor of several papers, books and reports, including Towards Better Transport (Policy Exchange, 2008), A Beginner’s Guide to Liberty (Adam Smith Institute, 2009), High Speed 2: The Next Government Project Disaster? (IEA , 2011) and Which Road Ahead - Government or Market? (IEA, 2012). He is a Senior Fellow of the Cobden Centre and the Economic Policy Centre.