How to abolish the NHS
23 January 2012
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The National Health Service enjoys strong support among the public, making it almost impossible to introduce radical reforms, even if the performance of the NHS is relatively poor compared with systems in other developed countries. Over the last thirty years reform efforts have therefore focused on greater private sector involvement within the NHS system and the deployment of some internal market-style mechanisms in an attempt to improve efficiency. In a recent initiative, for example, a private company has been contracted to manage a ‘failing’ NHS hospital.
The problem with such ‘part-privatisations’ is that they typically involve complex contractual arrangements and the creation of numerous ‘interfaces’ between government bureaucrats and the private sector, which may result in increased transaction costs and a reduction in overall efficiency. At the same time, private firms working within the NHS framework remain constrained by a strict regulatory framework on top of rigid contractual commitments. There is therefore little scope for the entrepreneurial discovery and innovation that brings such enormous gains within genuinely free market arrangements.
Moreover, since politicians and officials retain control over funding, the system remains unresponsive to consumer preferences and subject to capture by special interests, particularly producer interests such as the medical and nursing professions and the pharmaceutical industry. Mixed public-private systems therefore risk introducing additional transaction costs while suffocating the potential gains from private sector entrepreneurship. If this results in disappointing outcomes, as is likely, the whole concept of privatisation may be brought into disrepute.
There is therefore a strong case for taking a different approach. Rather than focusing on the gradual introduction of ‘market reforms’ and public-private partnerships within the NHS system, an alternative strategy would seek to bypass the NHS by liberating the private healthcare sector such that the NHS became less and less relevant as more and more people opted out of state provision to avoid long waiting lists and substandard care. This option has the potential to create a virtuous circle – by reducing burdens on the NHS, taxes could be cut, wealth created, and more people would be able to afford private healthcare, reducing the NHS burden still further and gradually undermining its political base.
But radical regulatory reform is necessary if a dynamic private health sector offering low-cost, high quality and innovative treatment is to emerge. A selection of regulatory changes is suggested below:
Finally, it should be noted that internet technology has mitigated many of the information asymmetry problems that have previously been cited as a rationale for heavy state regulation of health. A combination of new technology and a dynamic, entrepreneurial private health sector could make the NHS increasingly irrelevant.
The problem with such ‘part-privatisations’ is that they typically involve complex contractual arrangements and the creation of numerous ‘interfaces’ between government bureaucrats and the private sector, which may result in increased transaction costs and a reduction in overall efficiency. At the same time, private firms working within the NHS framework remain constrained by a strict regulatory framework on top of rigid contractual commitments. There is therefore little scope for the entrepreneurial discovery and innovation that brings such enormous gains within genuinely free market arrangements.
Moreover, since politicians and officials retain control over funding, the system remains unresponsive to consumer preferences and subject to capture by special interests, particularly producer interests such as the medical and nursing professions and the pharmaceutical industry. Mixed public-private systems therefore risk introducing additional transaction costs while suffocating the potential gains from private sector entrepreneurship. If this results in disappointing outcomes, as is likely, the whole concept of privatisation may be brought into disrepute.
There is therefore a strong case for taking a different approach. Rather than focusing on the gradual introduction of ‘market reforms’ and public-private partnerships within the NHS system, an alternative strategy would seek to bypass the NHS by liberating the private healthcare sector such that the NHS became less and less relevant as more and more people opted out of state provision to avoid long waiting lists and substandard care. This option has the potential to create a virtuous circle – by reducing burdens on the NHS, taxes could be cut, wealth created, and more people would be able to afford private healthcare, reducing the NHS burden still further and gradually undermining its political base.
But radical regulatory reform is necessary if a dynamic private health sector offering low-cost, high quality and innovative treatment is to emerge. A selection of regulatory changes is suggested below:
- Perhaps most importantly, the compulsory licensing of medical professionals should be abolished. Anyone should be at liberty to practice as a doctor or nurse, with patients relying on brand names or competing voluntary associations to ensure quality. Ending current restrictive practices is essential to enable private firms to increase productivity in the sector.
- Restrictions on the types of treatment available ‘over the counter’ should be lifted to enable patients to obtain medication without recourse to registered doctors and regulated pharmacies.
- Burdensome drug licensing regulations should be rescinded. Instead, the testing of new drugs should be left to private firms and free markets. Reputable companies would have strong economic incentives to ensure the safety of their products, while there would also be far more freedom for experimentation and innovation by new market entrants, with huge potential benefits for patients.
- Prohibited recreational drugs, such as cannabis and opiates, should be legalised to allow the sick to benefit from their numerous medical applications.
- Private firms should be free to bring in low-cost medical professionals from abroad and at liberty to determine rates of pay and working conditions through private contract.
- Legal reforms could enable patients to waive their right to clinical negligence claims.
- Planning controls and building regulations should be liberalised to enable the rapid development of new private healthcare facilities.
Finally, it should be noted that internet technology has mitigated many of the information asymmetry problems that have previously been cited as a rationale for heavy state regulation of health. A combination of new technology and a dynamic, entrepreneurial private health sector could make the NHS increasingly irrelevant.
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The NHS is the most efficient health care service in the world. Several studies have confirmed this. That’s why “The National Health Service enjoys strong support among the public” so keep your grubby free market vulture claws out of it. The world is changing and many people are determined to make your type of thinking extinct.
“The NHS is the most efficient health care service in the world.”
-By what metric, Anonymous?
“Several studies have confirmed this.”
-Which one?
@Anonymous “The NHS is the most efficient health care service in the world”. That is an insult to all who have suffered/died at the hands this state-owned, self-interested, bureaucratic monolith. The well off can afford to go private or fly abroad (as more and more are now doing) to get decent health-care whilst the poor are left with this “service”. The sooner the market sorts it out the better.
@Anonymous – the problem with international comparisons is that healthcare systems in other countries are afflicted by unwarranted government intervention, regulatory capture by special interests and so on, even when provision is nominally private.
But the original author was making a (superficial) international comparison to support his disdain for the public’s view of the NHS, no?
“the NHS is relatively poor compared with systems in other developed countries.”
If we privatised, how do you suppose we would escape the fate of every other country that uses this system and destroy the government intervention and special interests?
I think most sensible members of the public who know their history would be united in the view that there is, and can never, such a thing as true free market capitalism of the kind advocated by its Right-Libertarian fanatics. It’s a fantasy. The governments and special interests we have now are a creation of capitalism – they grew out of it and are an inescapable part of it.
Classic liberals like the much-misquoted Adam Smith believed that healthcare would be best provided by the government, so it is very ironic that the Adam Smith institute is publishing material like the stuff you post above. Perhaps they should change their name?
Here are some studies. These are the first sources that I found, they may not be the best as there are many of them.
Lives saved-per-pound spent:
http://www.hospitaldr.co.uk/blogs/our-news/nhs-is-one-of-the-most-cost-effective-health-systems-in-the-world
Lives saved per million of the population,
http://www.politics.co.uk/news/2011/08/08/surprise-report-nhs-most-efficient-healthcare
And others
http://www.bbc.co.uk/news/10375877
I and my family have always received good care from the NHS, and I treasure it. We spend much less on it as a proportion of GDP than other European countries – the outcomes could be even better if we spent as much as Germany or France.
I tried to post my sources but I don’t know if links are allowed as my comment hasn’t appeared
The first report measured lives saved per pound spent. It was publishes as a JRSM Short Report in August last year:
“The NHS saves more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland and is one of the most cost-effective health systems in the world, a study finds [….] Using the latest data from the World Health Organisation, the paper shows that while Labour’s investment in the NHS saw health spending rise to a record 9.3% of GDP, this was still less than Germany with 10.7% or the US with 15%. Not only was the UK cheaper, says the paper, it saved more lives. The NHS reduced the number of adult deaths a million of the population by 3,951 a year – far better than the nearest comparable European countries. ”
Another was a commonwealth fund report in June last year which looked at quality, efficiency, access to care, equity and healthy lives. The Netherlands came first and the UK second overall. The UK was top for efficiency: “When it came to efficiency, the UK and Australia ranked first and second, respectively.”
Studies were a JRSM Short Report published in August last year that found the UK saved more lives per pound than any other health service worldwide, and saved more lives per million of the population.
The other was a Commonwealth Report in June last year that rated the UK top for efficiency and 2nd overall (first was Netherlands).
Apologies for multiple posts. I assumed I was breaking some kind of rule by linking or quoting long passages.
@Anonymous – Thank you for posting links to articles describing various studies on the efficiency of the NHS. Judging by the articles, I don’t think these studies are particularly useful. Numerous factors affect mortality rates, for example. Demographic factors partly explain relatively poor stats in the US. More importantly, these comparisons are tangential to the main arguments of this blog article. The article is, after all, sceptical about systems that attempt to introduce private-sector provision within a straight-jacket of heavy state regulation, and indeed explains that such systems are likely to be marked by inefficiencies resulting from transaction costs etc…
Well you wouldn’t think they were particularly useful, would you – they’re certainly not useful to you. Personally I don’t think demographic factors figure largely in the worse mortality rates of European countries. On the contrary. And it is the attitude shown in this article that is fueling many of the abysmal “reforms” being proposed today. You are right of course that this article is actually proposing an alternative method to destroy the NHS from without rather than from within, dressed up in the pretty language of consumer choice. But I don’t believe that the NHS would become less and less relevant unless the government continues to drive it into the ground and reverse the improvements that had been made before they came into power. Private health insurance is prohibitively expensive (even in the US) and is inadequate if you have pre-existing health conditions – it is no real alternative. And even if it were to be widely taken up, ultimately this article is in favour of taking health care away from the poorest in society, once the reforms it has proposed have “undermined” the NHS’ political base. And that is disgusting. It advocates taking away people’s freedom to live without fear – the fear of bankruptcy if they get ill, the fear of losing everything if their insurance won’t pay out.
(besides, I was really taking issue with this
“The National Health Service enjoys strong support among the public, making it almost impossible to introduce radical reforms, even if the performance of the NHS is relatively poor compared with systems in other developed countries.
”
so my comment wasn’t entirely tangential. I think it is fair to comment on anything I feel is misleading)
@anonymous – this debate is not as black and white as you assume. Of course, there are difficulties within any system due to vested interests taking over and so on. As the author of the ASI paper, I tried to find a way through that would provide individuals with more choice and open the NHS up to competition at the consumer end (I do think it is dangerous to do what the government has done and just open up at the supply end). One tries to develop systems to reduce the power of vested interests and some systems work better than others in that respect. I felt that my suggestion in the ASI paper did that reasonably well as do Richard’s suggestions above more directly. I would be interested in a quote from Adam Smith about health care because, given the state of health care at the time, I am not sure that it would be much more valid than an Adam Smith quote about making motor cars.
You call us right-wing fanatics but there is really only one other system in the developed world that has followed our pattern in the UK. We have not got the system that Beveridge would have wanted and it was at the extreme end of all the models considered in 1947. And the Dutch system you praise is probably one of the more liberal ones.
We all have personal experiences and our famly’s recent ones have been dreadful. I won’t go into detail on a public forum but it really involved lack of attention to the personal needs of the patient with some serious consequences. One hears this over and over again (and, indeed, there are two or three other incidents with other members of the family, one of which ended up with my late father spending six weeks in a stroke rehab. unit blocking an acute bed – costing a few thousand quid a week – because he lost his place in a queue for 20 minutes of urologist consultant time whilst being transferred between the two places. As it happened, he was not bothered, but it just shows where you get when you run a system without prices! The last experience was the latest in a long line of family experiences. Measured by pure efficiency, the NHS might do quite well (depending on how you define “output”): but in the same way that a Lada production line might have been “efficient” with no regard for product quality. I think we can do better and nearly every country in the world believes it can do better by a different path too.
Let me make a further point. The absence of pre-funding in all systems (and it is possible – in theory – to have a pre-funded nationalised system) will exacerbate the demographic problems because 50% of all health spending is in the 18 months before death.
I would imagine that no other country followed our example because of the vested interests of capitalists and the political classes. It is remarkable that it was allowed to happen here and took extraordinary historical circumstances. That does not mean that it is inferior, and not worth copying. I am sorry to hear of your family’s experience and it is obvious that our service is not perfect, but i think there can be many different interpretations of this that don’t boil down to “a lack of prices.” For one, successive governments have constantly meddled with management, and wasted money on things like aborted IT projects. We also spend less as a country on our healthcare than places like Germany or France. Finally, I think the comparison to the Lada production line is inappropriate. The measure of efficiency is that of lives saved – a product which is the same whoever produces it, and is surely of the highest value.
well we could probably argue back and forth for weeks without making any impression on each other. But, in general, anything that is provided without any involvement of the price mechanism is going to run into trouble. I am surprised that the UK does well on a lives saved measure of efficiency because it does badly, I believe, on a premature deaths measure. But, let’s suppose you are right. If you are right, I think that probably bears out the Lada analogy. What about the comfort, care and value of time for those who remain alive? Perhaps that is what other countries get from spending more. The government is bound to interfere in a system that is entirely government funded and run – that is the point of the system (it responds to votes, not pounds). Such large mistakes are in the nature of a government-run system (which is not to say that there are not problems with privately run insurance-based systems such as over-provision). I am not trying to persuade you – as I say, neither of us will persuade the other. But, there are inherent problems with systems run without prices and without choice. Also, it is very often not capitalists who are at the heart of mixed systems – indeed, it was not in the UK (GPs excepted who are obviously large in number and were self employed at the foundation of the NHS: indeed, they still are), it was local authorities, charities and mutual organisations.
You are probably right with your first point! Thank you for your polite reply though, despite my irritable posts; it is helpful for me to try to understand a point of view that is different from mine. I find I lean more and more towards left-libertarianism, so don’t find the nature of the relationship between government and health provision ideal, but I do wish to see its structure preserved if the alternative is privatisation.
our monograph on prohibitions might interest you (you can download it from the publications part of the website)
Anonymous – the only truly comprehensive and international comparison of medical systems that I know of is that carried out by the OECD.
You can read its summary conclusions about various countries here:
http://www.oecd.org/document/39/0,3746,en_2649_33733_46491431_1_1_1_1,00.html
Click on the union Jack to read its summary of the UK, but to save you time I’ll quote the relevant bits here:
“Efficiency and quality: Below average DEA score”
“About average spending per capita”
“The quantity and quality of health care services remain lower than the OECD average while compensation levels are higher. Reinforcing competitive pressures on providers could help mitigate price pressures, e.g. by increasing user choice further and reforming compensation systems”
“High relative income level of health professionals”
The OECD also produces a separate graph showing how much could be saved, given the current level of services, if various countries were as efficient as the best. The NHS shows one of the biggest potential savings.
The Euro Health Consumer Index (which, as the name suggests, compares European countries) also rates the NHS poorly and says that Bismarck-type systems (social insurance) are generally superior to Bereidge-type (government-run) systems.
Thank you for suggesting the OECD report, which I would probably have avoided given that it is perceived by many as having a distinct neoliberal agenda. However, there was no need to save me the time – I was prepared to do more research on it. And while there are some disappointing results for the UK, the overall impression of the NHS really does seem to depend on how you spin it. The Guardian of course picked out different statistics (as well as mentioned the more disappointing ones) – they also included this quote from Mark Pearson, head of health at the OECD :”The UK is one of the best performers in the world. But outcomes are not what you expect because there is a big reform every five years. We calculate that each reform costs two years of improvements in quality. No country reforms its health service as frequently as the UK”. And as a proportion of GDP, the report found our health spending to be absolutely average (our spending per capita would then of course be higher we have higher GDP than many of the countries we are compared to).
Your suggested improvement of abolishing the compulsory licensing of medical professionals strikes me as such an obvious non-starter that it would be worth deleting it simply in order to gain more credibility for the others. Most people have a horror story of dealing with an unqualified plumber/electrician/builder etc. – and this proposal would inevitably be described (caricatured?) as allowing anyone to write prescriptions, carry out operations etc.
@Anonymous – The removal of compulsory licensing is one of the most important reforms needed to break the stranglehold of producer interests. It does not mean that professional associations would cease to exist. Rather, consumers would be free to choose whether to use a ‘registered’ professional or not. Indeed there could be competing professional associations with different standards. The brand names and reputations of private healthcare providers would also provide incentives for high quality care, along with various feedback mechanisms. It is not clear that expensively-trained doctors are needed for every diagnosis or to perform simple medical procedures…
Anonymous – I think that you’re more likely to have avoided the OECD report because contradicts your assertions about NHS efficiency. The OECD is an inter-governmental body , not some ‘neoliberal’ campaigning organisation. Nobody else performs more rigorous international comparisons.
If Mark Pearson really said what you claim, then it rather argues against a government-run NHS, since governments change and therefore different politicians and going to want to make the changes they prefer. That’s an argument against a government-run medical service.
In any case, just about all western countries are amongst the best performers in the world when it comes to medical services – that’s because they’re some of the richest countries in the world. Even if they’re only spending the OECD average (as a percentage of GDP), this is way above average in cash terms.
The Euro Health Consumer Index also rates the NHS poorly within Europe, incidentally.
I actually hadn’t read the OECD report at all, so it was nothing to do with the content. I merely meant that I have read some rather dubious things about them, so view them with suspicion. But the report does indeed seem rigorous enough. Mark Pearson did indeed say what I “claim” – the article is actually the first search result on Google if you search for OECD NHS: http://www.guardian.co.uk/politics/2011/nov/23/health-bill-nhs-oecd-report. I don’t believe that it does argue against a government -run NHS, however. The constant meddling is not necessarily a feature of government-run services, but the dire state of democracy and politics in this country since Thatcher. I can only hope that the current crisis of capitalism will eventually change public opinion and force a change (not much evidence of this yet in the UK but there are stirrings in the US where the economic situation is – at the moment – worse. Unfortunately we have highly effective propaganda to overcome). I would like the infrastructure of the NHS to be in public hands when this change happens. Of course, I would like to see more democracy in general and de-centralised power.
“That’s an argument against a government-run medical service” ….that’s an incredibly creative interpretation, ha ha!
It’s a very reasonable interpretation to all but the irredeemably naive.
If you don’t want politicians to control your medical service, then don’t advocate one run by – and answerable only to – government.
Make it answerable only to users and make the funding follow user preference. That way, providers will only re-organise when there is need to be more efficient or provide a better service.
“The OECD is an inter-governmental body” – and unfortunately most governments are rather neo-liberal at the moment
That’s a creative interpretation to coin a phrase. Most governments more or less completely control the health and education sectors (notwithstanding this debate), spend between 40% and 50% of national income and regulate the economy in more detailed ways than ever before.
Anonymous – The idea that most governments are ‘neo-liberal’ is your fantasy.
How come public spending is so high if this is the case?
I would say that it’s a very questionable interpretation to all but the irredeemably fanatical. I did not say what you suggested above – I would like the medical service to be run by public representatives, and I am free to question the nature of that representation. I do not think private profit should have any place in the running of health care, and find that idea much more problematic than the changeability of political control. I’d be interested how you would differentiate the system you propose from the disastrous American one. Regardless, privatisation of other services in this country has also had very bad results (although perhaps everything would be different if we all lived in that magical free market fairy land that could never actually exist)…
Interesting – long distance coaches, telecomms, energy, rail – which of those would you renationalise? I am actually old enough to remember what those services were like before. Problem with comparisons with the US model are that 50% of it is completely financed by the state and that is before one thinks of other interventions. You are a left libertarian but, in addition to the state spending 50% of national income, it would run health (which it does already), presumably education (ditto) and presumably telecomms, energy, rail, water, coaches, road freight, airports, airlines (and all the other disastrously privatised services). How much liberty would there actually be? A system without profit is a system that decides to throw away any information about what people actually want and has to be replaced by a system based on what “elected representatives” think people want. Yes, there imperfections in the market, of course, but if you throw away the price system you throw away rational information on how much alternatives cost and how much poeple value those alternatives.
Obviously I am not keen on the state, but until there are popular social alternatives I wish to keep the NHS as the lesser of evils, because I think the majority of people want to know that they will be cared for if they are ill, without conditions. I was going to write a longer post, but there is no point – I feel like I need to go and wash my brain out. Goodbye!
Anonymous –
So you want a medical service run by ‘public representatives’ and you don’t want any private profit to be involved. Doesn’t make any sense to me, but that’s your choice.
What I don’t understand is that you want to force your preference on others. I have no objection to private profit and and perfectly happy to use any willing provide that I feel offers the best choice for me. Why do you want to stop me?
This is what I don’t understand – just because you want to restrict your choice (fair enough) why do you want to restrict mine? Why can’t we both have our way? The current problem is that government confiscates our money through taxes and then will only fund the medical services that it provides itself, regardless of whether patients would prefer to use another provider. What sense is there in this?
Incidentally, before the NHS there were many not-for-profit providers. Most hospitals were charitable institutions, in fact. I’d be happy to return to this situation – you could restrict yourself to just using not-for-profit institutions and I wouldn’t. The we’d both be happy, surely?
There is no point entering any further discussion with you, it’s the same old tired thing. For any poor soul who stumbles on this discussion:
http://world.std.com/~mhuben/libindex.html
(a bit America-centric but quite useful if you want to understand these loonies)
@Anonymous – I thought you were sympathetic to ‘left-libertarianism’, in which case I don’t really understand your last two comments. Moreover, there is little that a left libertarian would object to in the original blog post.
The bizarre thing about the debate above is that the left libertarian’s repose is to deny the very liberty that libertarianism is supposed to deliver. The IEA’s piece is a litany of free living propositions; the convulsions against them are statist and anti-libertarian. More to the point it is entirely clear that the term neo-liberal is used in the pejorative sense – even though, by its very nature, neo-liberalism is the coupling together of public and private sector aims in the style of European social democracy. Anonymous doesn’t seem to realise that neo-liberalism is the philosophy of the mainstream left; it is not classical liberalism.
As an aside, I note the difficulty of getting politicians to even discuss the question logically. However populist and agreeable to them as soundbites, it is regrettable that not only the PM, but also Lord Tebbitt have asserted their own convictions about the NHS an an irreplaceable institution because of their personal experiences of it, directly encouraging the false implication that, had the NHS not existed, there would have been some kind of awful healthcare void where treatment would have been absent.
It might have been better!
My God man, are you mad?! There’s a strong incentive to ensure drugs are safe, there’s also a strong incentive to get people hooked on heroin! I don’t doubt you have good intentions but you are clearly dangerous. I mean it when I say, for the good of mankind, go and sit quietly in a corner somewhere and try not to touch anything important!
If the NHS is so wonderful, why do most doctors have private health insurance? Explain that and stay fashionable.
” … The National Health Service enjoys strong support among the public, making it almost impossible to introduce radical reforms, … ”
So, the title of this article should really be, “How to override the democratic wish of the people in order to improve our profits”
That is precisely why the public wish to have healthcare exactly where it is, so that patient care comes before profit.
Andrew Wilson: ” …in order to improve our profits”.
How do you know that Richard Wellings has any financial interest in this (other than as a taxpayer, of course)? Why do you assume that any desire to reform or abolish the NHS must be driven by a motive other than a wish to improve medical care and derive better value?
And, frankly, it is not as if vested interests in the current NHS do not profit very nicely from it. We have easily the best paid and least productive medical staff in Europe, according to the OECD.
I have never read so much unadulterated rubbish from a think tank in the one article and that’s saying something. Abolishing licensing of doctors – just how much time do you think the average Joe Bloggs has to check if a doctor is from a ‘reputable brand’ and how exactly do you visualise they would go about it? And how do they do that if they’re in an acute situation? If they’ve just been knocked down or their appendix has burst, do you think they’re going to look up a hospital on Google while they’re on the trolley getting wheeled into the operating room? Don’t be ridiculous. And as for drug licensing; well, sadly NICE has been divested of that function which now means that every snake oil salesman can push his/her particular brand on a trust without having to go through checks and without a national regulator to ensure that drug prices don’t go through the roof. Judging by America’s example we can expect to see drugs go up to five times the price we’re used to paying on brands here. Our NHS ain’t perfect, but we get a hell of a lot more bang for our buck than most countries and that is because it isn’t privately run. What is proposed here is just going to break the NHS into a whole lot of competing franchises of varying quality and no redress if something goes wrong. Think of the recent scandal on breast implants if you want to know what lies ahead.
HJ: ” … How do you know that Richard Wellings has any financial interest in this … ”
I don’t, but he goes on to talk about improving profits.
My point was that the majority of people who vote don’t want a privatised medical service in this country and no-one gets to override that.
” … We have easily the best paid and least productive medical staff in Europe … ”
Efficiency? By what measure? Are yo measuring how much time, say, a nurse is actually just sitting, talking to a patient?
Julie:
“Our NHS ain’t perfect, but we get a hell of a lot more bang for our buck than most countries and that is because it isn’t privately run.”
The OECD analysis makes it very clear that we get much LESS bang for our buck than most countries. If you have contrary evidence, please provide it.
As for medical licensure, I suggest that you Google Milton Friedman on this subject – he very effectively destroys the case for medical licensure detailing how it leads to lower quality and lower provision. You rely for your safety and health every day on individuals and companies that are not compulsorily licensed.
Andrew Wilson – In fact, Richard Wellings doesn’t mention profits anywhere in this article, but even if he had, then in a competitive environment, providers can only increase profits by becoming more efficient – and isn’t that what we’re after?
In the NHS, medics currently profit very nicely out of a lack of competition. Never forget that the BMA, to name just one organisation, is a trade union run exclusively to advance the private interest of its members.
I suggest that you read the OECD analysis if you want to understand what they mean by efficiency. However, essentially they are looking at medical outcomes versus inputs. Summaries of their findings are here:
http://www.oecd.org/document/39/0,3746,en_21571361_44315115_46491431_1_1_1_1,00.html
Richard handily ignores the fact that 50 million people in the U.S cannot afford healthcare insurance, and they have a financially less efficient service than the NHS. The Free market experiment has failed, and it was an experiment. Government regulation is necessary or else we get Enron or the Lehman brothers. I suspect most people who want to hand the NHS int private hands are hoping to financially benefit form it. The word liberalised bother me too. Liberalised from what? From the people and into the clutches of unaccountable private firms who are in it for the money. This is nothing to do with efficiency or wanting a great healthcare system and everything to do with greed and selfish motives.
HJ. Efficiency is not the same as good patient care. Sometimes the right treatment is not only about the medication given, but about time spent with the patient. It’s not efficient economically but for the patient the outcome is much better than if the time hadn’t been spent.
The best medical outcomes are from evidence-based treatments and not economic studies.
Doctors, and nurses in particular, are run off their feet, not because they are inefficient, they are incredibly efficient with their time, but because there is too much to do and not enough trained medical staff to do it.
We could easily cover the costs that the NHS requires if the large corporations paid there taxes they are due, rather than deciding how much they will pay over lunch with the inland revenue. That alone would recover billions, never mind the the amount the banks owe us as a nation.
We cannot have a situation where the patients’ main concern is about the cost, at a time that is emotionally stressful, rather than helping the treatment through diet/exercise etc…
If you want to see how privatised healthcare works you need only look to America. People, who cannot afford health insurance because their jobs don’t pay them enough, or whose jobs don’t cover them, dont get the medication they need and, in many cases, can only lie down and wait for death. What else can they do?
That is not a situation we ever want in this country and anyone who tries to introduce it will meet huge resistance.
That is why articles like these are suggesting underhand ways of introducing private medicine, because people know that it is not wanted.
The US has not adopted any of the reforms advocated in this blog post. Its healthcare system cannot be described as ‘free-market’. Indeed, it exhibits the exactly the problems of heavily-regulated mixed systems that are explicitly described and criticised in the above piece. The UK certainly should not seek to emulate the US system.
Andrew Robinson. Three points – First, 45 million people do not have medical insurance in the US but it would be mistaken to conclude that they are all US citizens or because none of them can afford it, or that they have no medical cover. Second, there is definitely not anything even remotely close to a free market in medical care in the US – very far from it. Do not confuse largely private provision with a free market. Third, why do you assume that the only alternative to the NHS is the US ‘system’ – there are many other medical ‘systems’ in the world deemed by the OECD to be much better and more efficient than those in either the UK or the US.
I have no connection with any medical provider whatsover and I would like to see the end of the NHS as I do not believe that it serves this country well. What ‘greed and selfish motives’ do you accuse me of, or do you just throw these accusations because your argument is so thin?
Carriage returns never show up on here. Would make all our posts easier to read. 🙂
Andrew Wilson –
You are clearly unaware that the OECD looked at medical outcomes, and found the NHS wanting. And if the medics and nurses in the NHS are running around being as efficient as you claim, then why did the OECD find the NHS to be so inefficient? It can only be the system in which they are working.
The people who are trying to push through the bill and many of the Lords who are in favour of the bill have financial interests to companies that will benefit from the increased privatisation. My assumptions are based on all the stories out there that have revealed the conflicts of interests to the bill being passed. A lack of regulation is a door open to disaster. Humans cannot be trusted I am afraid and if they are not regulated, then humans will take what they can and screw the rest. It encourages selfish and greedy behaviour. Bloomberg is estimating the amount of American’s without health insurance to have risen up to 52 million because of mass unemployment. Directly linked to not being able to afford it.
I relate to the U.S system because the Conservative party have been fawning the U.S for some time – a different system but for how much longer. Despite your protests that my argument is paper thin, you yourself provide no evidence whatsoever that an unregulated free market system would be more efficient and coordinated. As I said, we only have to look at Lehman bros and Enron to know what happens when people are not regulated or regulators are not capable of regulating.
Andrew Robinson – so you admit that your carping on about the USA is irrelevant because nobody is proposing anything like their ‘system’ here. And the US system is highly regulated – so why do you not approve of it?
Incidentally, if humans cannot be trusted if they are not regulated, then who do you think should be regulating them. Aliens? Deities?
Of course, the BMA couldn’t be defending the current system because its members do so nicely out of it, could they?
Hilarious article. How will the “consumers” know if they are getting a product that is needed. Eg a patient presents with a sore throat, Dr decides no treatment needed, pt demands antibiotic. Under your neoliberal system such a pt will end up being treated even though it’s not necessary. Result increased costs, side effects and drug resistance
It would be comforting to know that this whole post is a ridiculous, magnificent, and yes, hilarious wind-up. However My Black Cat is taking it all very seriously and is spitting, arching her back, and wafting her tail ferociously. Worse still, she is so upset that she has stopped hunting rats for The Cauldron.
Could Mr Wellings please reassure My Black Cat that his post is indeed a spoof so that The Witch Doctor can get on unabated with her entrepreneurial work in The Spell Pantry? If it is a spoof then perhaps he could also tell us why he wrote it?
It is important not to lose sight of the basic principle. It is surely incontestable that the reason why NHS hospitals (though not commonly excellent GPs on a one-to-one basis) routinely treat patients either as if they are sheep to be corralled or slightly mentally-retarded 10-year olds; why nurses too frequently lack devotion to or vocational interest in their work; why the food – that imperative for morale and recovery – is poor, and why everyone thinks it is somebody else’s job to scrub the pipes or the skirting board is the plain fact that he who pays the piper does not do so directly and therefore does not call the tune. Of what use is it for patients to assert that mixed wards are a scandalous disgrace and that they will certainly refuse to patronise them? Humans respond well to incentives. They also respond quite well to disastrous consequences for falling down on the job. Soviet-style healthcare clinically, carefully and deliberately removes all the incentives for top-quality service and good behaviour. C’est tout, mes amis. It’s not good enough.
Of course it is not quite ‘tout’. there is another consideration. If you look at the debt and the demographics, we can’t afford it. Not remotely. It’s history. Frankly I shudder to think what will happen when the bond market finally wakes up and takes a close look at the UK although the Greeks are giving a clue: action on spending which will not avoid civil unrest and depression. We should probably try to get ahead of it and the NHS is the obvious place to start. Whether populist politicians are actually capable of explaining that to a public greedy for entitlement and flabby with irresponsibility is another matter. They have not been yet. Austerity, for the record, is taking a candle to bed and boiling the chicken carcase for broth. (Excuse me? What chicken carcase?)
I am honestly shocked and appalled after reading this article and its comments, yes the NHS isn’t fiscally perfect but its the largest free healthcare services in the world and as a whole gives a good service to everyone. yes you can get better quality service from the private sector if you can afford to, but many people cannot. if the NHS was completely privatised millions would suffer if not die as they simply cannot afford to get treated.
Well, if you want to know what has happened with hospital cleanliness, you need look no further than outsourcing the work to private firms. In my neck of the woods, private cleaners wouldn’t clean up bodily fluids, which ain’t a hang of a lot of use in a hospital. Hence the nurses had to clean the wards instead of the cleaners as well as trying to ensure their patients didn’t flatline. A profit for the private firm; a waste of money and increased infection for the NHS.
I have been in sufficient PFI/PPP run NHS Hospitals as quality assurance / Clincal governance consultant and auditor has brought me to understand entrepreneurship is not the answer to the problems that beset the NHS in England nor are such entrepreneurial ideas as PFI/PPP in the slightest efficient or cost effective – in fact the very opposite. Current research indicates that the entrepreneurial PFI/PPP model is 6x more expensive than traditional models of NHS building, maintenance and operating methods over the 25 year operating period (Edniburgh University Department of Public Health).
The problem in the NHS is down to poor management of resources (both human and fiscal) and repetitive applications of ‘market forces’ in a manner inappropriate to health care for political reasons, not to meet an established patient need or expectation. This article is yet another example of the impoverished thinking of neo-liberal capitalism and the irrationality of this approach which is yet another top down proposition that will fall upon stony ground and cause more harm than good.
Most of the inefficiency and in effectiveness prevalent in the NHS has its origin in Richmond House and the politicians of all classes who work there – Westminster, Civil Service and Medical – who tend their own little empires and fiefdoms to protect – that is before you add in all the other vested interest who have the ear of any of these three – pharmaceutical companies, Medical Royal Colleges, Quangos and think tanks (like yourselves) who have the ear of here today, gone tomorrow Health Ministers. All this is reflected in the prescient comment one consultant said to me; Never has so much much been measured by so many for such little patient benefit.
There is a way to improve NHS England’s effectiveness – it is not a commercial model or latest neo-liberal economic or bampot political theory it is to focus on meeting patients needs and expectations using proven quality assurance methodologies on medical treatment, the logistic, management and financial train required to support them and not the political hodge podge, anal control freakery management style and compromises currently in play.
It will never happen because it would mean taking control and power out of the hands of the politicians of all stripes in Richmond House – the biggest vested interest of all.
Reading this article and many of the comments beneath it has utterly depressed me. However, of all the comments, Simon Murray Wells opining that a “public greedy for entitlement and flabby with irresponsibility” should be persuaded to give up their NHS had me fuming. In this neo-liberal parallel universe it’s the proles who are ‘greedy’ for expecting to be taken care of when they fall ill, while the private companies (that would stand to make big profits once the NHS had gone) are presented as paragons of virtue, with only the interests of the patient in mind. I don’t think so.
Well, Ben, these words “public greedy for entitlement and flabby with irresponsibility” uttered by Simon Murray Wells make My Black Cat fume too, and they make The Witch Doctor stir The Cauldron furiously while incanting the most powerful and obnoxious of spells.
What the Murray Wells of the world do not seem to understand is that the NHS is a complex organisation that cannot be managed in the way that shoe shops, telephone shops and specs shops are managed. These are very simple businesses compared to healthcare where those central to the service are neither customers nor clients. This witch has not lost sight of the “basic principle” referred to by Simon Murray Wells. The basic principle can be defined by one word – “patient.”
Much of the degeneration in the NHS dates from about 1984 when patients were renamed clients, hospitals competed with each other, and chief executives whose management skills related to shoes, telephones and specs were installed.
However, in spite of the serious tone of some of the post and the comments, The Witch Doctor still finds it difficult to believe this weird offering that we are reading is anything other than a spoof. My Black Cat is waiting patiently to hear from Richard Wellings that this is in fact a wind-up and that he has a great sense of humour.
Anyway, who could trust an outfit that can’t even allow commenters to divide text into paragraphs, to advise on running or even dismantling the NHS?
If I wrote immoderately and was guilty of the online disinhibition effect, I certainly apologise. Nevertheless, my central points remain: it is the patient who needs to be able to insist on high standards, while it is obvious that expectations of what the state can afford as a safety-net in future must be dramatically reduced. I think I will end my contributions on those unassailable points on which – presumably – we can all agree!
@madjockmcmad – PPP/PFI is the kind of corporatist, heavily regulated initiative that is criticised as inefficient in the original post. There is very little scope for entrepreneurship under the terms of such agreements. And clearly you are correct that there is a problem in the NHS with endless interference from the centre – another good reason to move to a voluntary healthcare system based on freed markets.
@Ben – Charities and cooperatives etc. would be at liberty to provide heathcare in a freed market. In all likelihood (and the historical record supports this assertion), a wide range of options would be available to patients. It’s also important to point out that private companies don’t operate in a moral vacuum.
The production of final clinical trial reports is internally regulated but the pharmaceutical industry is not obliged to show the data to anyone to have it vetted.
Of course there are rules but they are unenforceable. It is all done on trust.
The flour makers used to put lead oxide in flour to make it look whiter. But we don’t need regulation.
Is the author of this piece feeling ok? – Did I just read:
Perhaps most importantly, the compulsory licensing of medical professionals should be abolished
or has somebody slipped something in my tea this afternoon.
Who paid for this report? Why won’t the IEA reveal its funding sources? Why should we trust anything they say if we don’t know who’s paying for it?
In many developing countries, you can buy any medicine over teh counter, in fact if not in law. Hence why more and more illnesses cannot be cured. Overuse by self-medicatiton of e.g. antibiotics leads to this. But let us all die of simple infections as long as the market is free!
Anonymous – yes, as Milton Friedman demonstrated, compulsory licensing of medical professionals raises prices (and therefore reduces availability) and lowers the overall quality of medical provision. Licensure is used by vested interests to exploit the public.
Every day of your life, you rely on goods and services produced by unlicensed people for your health and safety. Aerospace engineers don’t have to be licensed – do you feel unsafe when you get on a plane?
Well, the article is not dated 1 April, so I can only assume it is inspired by the insightful journalism of the kind reported in The Onion.
These proposals, if they ever became reality, would indeed get rid of the NHS. Sadly, (and I think this is Mr Wellings’ point) this is the general direction our current government is taking us.
For those who take this article seriously, let’s take Mr Wellings’ point on drug deregulation to its logical conclusion. Just hypothetically a new market entrant comes up with a drug which seems to be an effective tranquiliser and antiemetic. There are no pesky regulations to limit the use of this innovative and exciting drug, so it is also prescribed to pregnant women to prevent morning sickness.
Just to continue with the hypothetical story, once pregnant women find out that the drug will cause birth defects, they can exercise their patient consumer preference, and choose an antiemetic drug that will not cause birth defects, thus driving innovation and quality.
As the unfortunate women who took this drug while pregnant have waived their right to sue (and the waiver was carefully worded to include the unborn children), the government will step in to bear the expense of caring for babies with severe birth defects, leaving the drug company free to continue innovating and providing consumer value (although next time with a different drug).
See, free markets solve everything!
Of course the real consequence to the tragedy of thalidomide was the strict regulation of drugs before they are allowed to come on the market to be sold to pregnant women.
Actually…(@HJ)
“The Civil Aviation Authority (CAA) licenses aerospace engineers.”
https://nextstep.direct.gov.uk/PlanningYourCareer/JobProfiles/JobProfile0374/Pages/default.aspx
This is a parody, right?
Anonymous2 – The CAA does not license the engineers that design the planes you fly. That is a reference to ‘flight engineers’, i.e. flight crew.
As I made clear, every day you rely for your health and safety on people who are not state licensed. Would Rolls-Royce and Boeing (for example) produce safer equipment if their staff had to be individually licensed? This is not to say that people shouldn’t be trained and qualified, just that government, through licensure, is not best placed to decide on what is appropriate. In this country, once a medic completes his/her medical training there have generally been no further checks – they can be licensed for over 30 years. Does this ensure competence?
I suggest that you Google “Milton Friedman Medical Licensure” to read a summary of the argument but, of course, he wrote a whole thesis on the subject.
As for drugs, why do you assume that people have waived their rights to sue if they use them? Why do you assume that drug companies are unconcerned for their reputation? There is a balance of benefits and risks in the use of any drug and you have failed to explain why state licensing is the best solution. Thalidomide was state licensed in this country, by the way.
@HJ I don’t think “aerospace engineer” refers to flight crew: “Aerospace engineers work on the development of aircraft and related technology” (same website).
The waiver hypothetical above incorporates one of Mr Wellings’s suggestions: that patients be allowed to waive suits for clinical negligence. The first thing that drug companies would do if this were allowed is to make use of the drug contingent on a waiver by the patient.
As for the drug companies, their first objective is to make money. They can and do market drugs for inappropriate uses, and downplay very serious side effects. This is especially true in the United States. Google zyprexa and FDA fines. The fine was $1.4 BILLION. Sadly for patients, the drug companies write fines like this off as a cost of doing business. What really needs to happen is the US needs to outlaw drug marketing to consumers, just like is done here. We need very strict regulation, not a free market. Otherwise what you have is some patients suffering until word gets out about problems. While consumers can then exercise choice (maybe), the patients who did not have this information as an initial matter are the ones suffering. They need to be protected, and strict, proper regulation will do this.
I have taken a look at an excerpt containing Milton Friedman’s on licensure here http://www.fff.org/freedom/0194e.asp and it looks to me like he is expressing a personal opinion based on his academic conjecture. There is a lot of talk about trade unions, which he doesn’t like. He does not present any actual evidence in this excerpt to support his view on licensure and quality.
Anonymous2 – I started my engineering career working in an aircraft factory. Trust me, aerospace engineers do not have to be licensed. Do you use a car? Do the people who design the safety systems in a car have to be state licensed?
Milton Friedman wrote a PhD thesis on medical licensure and examined the case in great detail precisely because he found that the strongest case was in the field of medicine. He concluded that it worked against the public interest.
You assume that without state licensing, drugs would just be forced on people willy-nilly. In fact, companies would need to demonstrate efficacy and safety otherwise it would be very difficult to persuade people to use them. They’d have to explain side effects. Licensing just leads people to assume that they’re safe. Organisations whose reputation depended on testing drugs for efficacy and safety would emerge. This is a far greater safeguard than state licensing – nobody stands to lose their own money and livelihood if they’re part of a statutory state system.
Well the talking is soon going to be over. NHS PLC is upon us folks, as the final reading of the Health and Social Care Bill goes through. I hope all of you that have waxed lyrical about private care will remember your part in the debate, when you find out BUPA won’t do your operation because it’s too risky and expensive and the NHS can’t because it’s been stripped of its services and staff. Will the last person out of the hospital ward please put the lights out?
As I see it, if these private companies could compete on a level playing field by building their own facilities and producing inspired, innovative solutions, like in the old days of UK private enterprise, then ok – let them work in parallel to the NHS with no public funding, and provide to whoever can afford it at market prices, WITHOUT stealing NHS facilities. The thing is they can’t compete and pay shareholders and greedy managers and venture capitalists. It’s these latter who want to muscle in on the NHS.
@HJ. Ok, lets assume that licensure does not guarantee quality and safety. Neither does the free market. As I understand it, the free market works by providing patient choice based on information available about the performance of providers in the market. You have not addressed the issue of how to protect the patients who are the initial victims of poor market performers. For example, the potential for modern-day thalidomide-like drug victims, a distinct possibility in a completely laissez-faire market.
Anonymous – I’m fine with that. I’m quite happy for private providers to work in parallel with the NHS with no direct public funding, just as long as its a level playing field, i.e the NHS gets no direct public funding either. The funding would go via the patient to whichever provider they preferred.
Anonymous2 – Yes, I agree that there is no absolute guarantee of quality and safety. My contention is simply that the market does it better because providers are continually forced to demonstrate their quality, efficacy and safety. Let me be clear – I’m not against inspection bodies, etc – just not statutory state ones./
As for your point about “initial poor market performers”, do you not realise that thalidomide was licensed by the statutory authorities? It was a regulatory screw up./
There have been many other failures of state licensing and regulation, such as bank regulation (and contrary to the asserts of much of the left, the banks are and were highly regulated), the GMC (as Dame Janet Smith pointed out), the regulation of hospitals such as Basildon and Stafford, even Ofsted which now admits that its “satisfactory” rating for schools actually represented a standard which was anything but. State regulators are often captured by vested interests (the GMC being the classic example of an organisation which ended up being dominated by and protecting medics when it was meant to protect patients)./
The other problem with state regulation is that people suspend their own scepticism and judgement because they assume that if an organisation complies with statutory regulations then it must be “safe”. The banking collapse proves this not to be the case – the banks were clearly behaving in an irresponsible way (indeed, governments were stoking a credit boom and encouraging them to behave in an irresponsible way). Had people instead been in fear of losing their money if they put it in a dodgy bank, they would have looked much more carefully at what was going on before investing. The banks would have had to demonstrate publicly that they were doing everything possible to reduce risk.
Privatise the NHS and this is what the low paid/unemployed/old/disabled and other vulnerable people will face … Or are those people in soicety to recieve the same quality of services F.O.C in all cases? …. I would like to think that Cameron and Clegg have a moral conscience and actually give a monkeys about people of limited means …. but, unfortunately, I havent seen any evidence of that .
http://www.familiesusa.org/issues/uninsured/publications/dying-for-coverage.html
“ukcitizen” is mistakenly conflating funding and provision – they are two separate things.
Incidentally, medical provision in the US may be largely privately provided, but that doesn’t mean that there is anything like a free market in provision. Milton Friedman pointed this out long ago.
“Yes, I agree that there is no absolute guarantee of quality and safety. My contention is simply that the market does it better because providers are continually forced to demonstrate their quality, efficacy and safety.”
It depends what market you’re talking about, Anonymous 2. My understanding of the market proper is that there are no safety nets; if the business in question gets it wrong, it goes out of business full stop. In that situation a provider will have to continually demonstrate quality, efficacy and safety. However, this is not the kind of market we are discussing. With regard to health, we are discussing the kind of rigged market that allows private companies to make a profit from breast implants but pass the buck to the NHS when they go wrong. We are discussing the market that ‘provides’ cleaners in hospitals that won’t actually clean up bodily fluids. We’re discussing (DELETED BY MODERATORS) who announced that they wouldn’t do operations on people who had co-morbidities or who they thought were a risk (by private terms). Imagine the demographic for hip and knee replacements and you’ll understand what a load of use that was. I actually cannot think of a single example of private secondment in healthcare that didn’t a) cost more b) reduce standards c) had to be patched up by the NHS later on at considerable expense. We are not heading towards a free market in the NHS. What is actually happening is that the NHS is going to first be asset stripped and then dismantled, because all three political parties have decided that they do not want to pay for the growing elderly population out of the public purse. That is the political reality; the free market does not come into it.
Julie, you are quoting from the post by HJ. I agree with your point of view completely (my post is above) 🙂
Anonymous 2,
My apologies – that’s what happens when you read stuff too late at night..
I see the moderators took the bit out of my post that actually gave a specific example of this profiteering. Don’t know why; it’s a matter of public record and I would have thought that a debate backed up by evidence about the actual effect of private intervention in the NHS , as opposed to nebulous assertations about what it might do, would be valuable. When police armed with machine guns turn up at an NHS protest as they did yesterday, I suppose that I’ve got off lightly.
Julie – I think I should point out that this piece is not about the current NHS reforms. In fact, it points out their shortcomings and moves on to what should be done – i.e. the abolition of the NHS and how to go about it.
You may or may not agree, but dont attack the piece for something it is not saying or defending things it is not defending.
@Julie – If you wish to give examples then please provide a link to a reputable source. For obvious reasons, we cannot risk publishing allegations about specific individuals and firms which may be unfounded.
In any case, as HJ points out, this blog article actually criticises what might be termed the public-private partnership model and explains why it is unlikely to deliver efficiency gains. I do wish that people leaving comments would actually take the time to read and digest the post beforehand.
Richard,
Firstly, here’s some reputable sources to look up on Stracathro;
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2711195/
http://news.bbc.co.uk/1/hi/scotland/tayside_and_central/8027355.stm
Secondly, I’ve been upbraided here for not sticking to the point of your article. I think this is slightly disingenuous; surely any proposal as to whether the free market is the answer to having an effective health service has to be examined in the light of how the market has performed so far in the NHS. However, I’m going to take up your challenge and give a full answer on why a free market just isn’t going to provide the kind of health service that we have come to expect .
The kind of health market you describe is based on insurance. Insurance is a sophisticated form of gambling. For example, car insurance is based on the premise that most people won’t crash. For every person that does, there’s a thousand people that don’t. And when the person crashes, you’re calculating that in most instances the crash will not be a serious one; the payout can be easily met from the premiums being paid. On the rare occasions that there is a really serious crash, you have to be sure that your risk pool is big enough to pay out. That means that companies have to be a minimum size to compete in this market; if you’re too small, you run the risk of being cleaned out if one of your clients is involved in a serious road accident and has to pay compensation.
What works for cars doesn’t work for health. First up, everyone gets ill. Sooner or later we get older, and old age does not come alone. So if we introduced the free market, people over a certain age would not get insured, or they would only get insured up to a point. They certainly wouldn’t get covered for all eventualities. This would also hold for people with chronic conditions such as diabetes, asthma, heart disease and a risk factor would be introduced for people who were overweight, who smoked or who drank too much. Basically, the only thing that private health insurance could afford to insure for would be an acute episode or an accident; everything else would be dropped. Now unless you’re advocating that people who are really ill shouldn’t be treated by the health service, this isn’t a model that you can use for health. It would end up in the fashion that you have in America; everyone still gets taxed for Medicare while paying for private insurance at the same time.
Secondly, the risk pool size is crucial. At the moment, the way the NHS is structured, the risk pool is the entire country. This makes it possible to perform complex procedures and maintain complex health services.
Let me give an example of what I mean. Supposing you have a car accident. You’re picked up by trained paramedics within five minutes of the accident and placed in an ambulance equipped with meds, defibrillator, oxygen, trauma board, heart monitor. Halfway there your heart stops and the paramedic starts it again. You are taken into the hospital’s A&E, given an MRI scan and rushed into an operating theatre where a fully qualified neurosurgeon operates on your skull to relieve pressure on the brain. While he is operating, it’s discovered that you’re bleeding out. 8 units of blood, of the correct blood type, which has been stored in the hospital’s blood bank is delivered up to the theatre. Once the operation is over and you’re out of immediate danger, you’re put in a hospital bed complete with monitors, emergency button that will call a crash team if you go into arrest again and your progress is observed by nurses trained to watch for anything going wrong. After a week or so, you get daily visits from an orthopaedic nurse to help you get upright again without damaging anything. And of course, you’re on meds, which have been checked against medical records and adjusted to account for your allergy to penicillin and your diabetic condition. Once you’re out, you have to see your GP every so often to check how you’re doing and he is given a note of all that’s been done via computer. He also has your entire medical history and knows you well, because he has been looking after your diabetic condition for the past ten years and if anyone can spot something wrong with you, it’s him.
Now just try to imagine what all of that costs, Richard. The cost of keeping medical records. The cost of medical schools and teaching hospitals to train highly skilled staff. The blood bank, the facilities to store the blood, the method of collecting the blood and testing it to make sure it’s ok. The hospital ITU with all the medical equipment; the MRI scanner, the monitors, the operating theatre. The ambulance fleet complete with paramedics. The cost of the stay in hospital. The cost of the medicines which have been checked to ensure they are up to standard. The cost of a GP who knows you so well that he can spot a medical problem with you at fifty paces. Try to imagine any private company attempting to set all of this up by itself in a free market. It’s not going to happen. No company has enough money for this by itself, not even in America. That’s why there isn’t a health system in the world that is completely free market, and if you compound that by attempting it in a country that only has 60 million people in it and they are going to be divided up into smaller units, depending on which health insurance company they pick, then it’s just all going to collapse.
Private health always has, always will, depend on the subsidy of the state to survive; it cannot hope to exist on its own. And if all it is doing in the public system is to make things more expensive and cream off a profit, then we should question its role. No one owes private companies a living. Don’t get me wrong here, Richard; I went to a private school and in some instances, the market can work. But it had its own staff, its own building and its own facilities. It didn’t borrow anything off the public system or rely on it for facilities; it was self contained. It didn’t rely on the public system in the way that BUPA relies on the NHS to deal with patients as soon as things get complicated or nasty. It isn’t our duty to provide private companies with a profit and make things more expensive for taxpayers and users of the NHS. If they have something to offer in the way of quality or value for money, then let them do it. But as I say, I haven’t seen it yet .
@Julie – Thank you for supplying the links and expounding your arguments in more detail. Let me explain why I think your critique of free-market healthcare is off the mark.
Firstly, insurance would only be one option once markets had been freed. Charitable organisations could provide treatment for those unable to afford insurance. Indeed many of Britain’s most famous hospitals were founded as charitable/religious institutions in the pre-NHS era, often with money donated by generous philanthropists. Moreover, in the late 19th century a large proportion of the population obtained health cover through mutual organisations such as friendly societies. Numerous options would emerge if voluntary solutions were no longer crowded out by coercive state provision.
Secondly, I don’t accept the arguments about the limitations of health insurance. Insurers can lay off risk using reinsurance markets. And there is no good reason why elderly people can’t be insured – for example through long-term plans that smooth out premiums over time. Equity release schemes could also be used to fund healthcare premiums for the many asset-rich but cash-poor pensioners.
Finally, it’s important to point out that funding problems in general would be diminished by the deregulation advocated in the article. Entrepreneurship and innovation would increase productivity in the health sector, making treatment more affordable.
Richard and HJ, it sounds as if you are very worried about the NHS and that you do not have a lot of faith in it and that you don’t think that any account that it works is accurate, and it sounds as if that you fear that any account from people have had a good experience of it are biased or just misinformed. It sounds as if your own experience of the NHS has been so poor that you are pretty sure that this must be the case for most people – is that right? It sounds as if your own experience has been quite formative? and that you found it impossible to get any kind of response when you tried to take some action? What kind of response did you get? It sounds as if it was not very positive for you?
I would add to Richard Wellings’ good reply that affordability itself is increased under more generally libertarian, small-government conditions where people not only spend money – on themselves, their families, their businesses and philanthropy – more wisely than government, but owing to virtuous incentives, have more to spend on these things.
People who have lived all their lives under huge government tend to be unaware of the potential for the release of wealth for good causes. The philanthropy of America is rightly famous. The US state’s eager and selfless ability to respond seriously to natural disaster anywhere in the world – a legitimate use of government – is not unconnected to where that wealth comes from and how it has historically been taxed. Tents, food and water-engineers are flown in to thousands needing help while the EU is holding meetings of bureaucrats somewhere and no-one even expects them to do anything useful quickly.
Socialism is harmful but especially to the poor and socialised medicine only the most obvious example. That mixed-sex wards exist, a dreadful outcome which should never have been imaginable, let alone actually held to be necessary, is perhaps the most depressing example of the absence of choice and coercion, though the decline in the humanity and vocation of nursing runs it close. Were these outcomes inevitable? I think a different approach would have made them both unthinkable and unnecessary.
“Charitable organisations could provide treatment for those unable to afford insurance. Indeed many of Britain’s most famous hospitals were founded as charitable/religious institutions in the pre-NHS era, often with money donated by generous philanthropists.”
If you thought a modern healthcare system was worth supporting Richard, you would pay for it, not rely on charity to do it for you.
@Julie – I would pay for it, but there may be some people who would benefit from charity.
There may also be some people who are low earners, but essential to our economy, who would benefit from a general taxation approach to funding healthcare as opposed to throwing them on the mercy of the parish..
@Richard, Hello
I have just a few comments in response to your most recent post.
In order to decide whether your market based scenario for health care provision will work, I think we need to take a step back and look at what the ultimate aim is. The best result is universal coverage provided on the basis of need, not ability to pay. The assumption which underpins this is that health care is a human right and should be accessible to all.
While it is certainly not perfect, the government-provided socialist, and as you note at the beginning of your article, strongly supported NHS provides peace of mind in the form of universal coverage and comprehensive health care. Moreover, this is done at a low cost relative to what other countries pay (especially the US which pays almost 20% of GDP for its health care, and still does not cover everyone).
In contrast, your scenario relies on the vagaries and uncertainties of the free market. In an ideal and perfect world, customer-focused companies would provide top quality health care to fully informed consumers at affordable prices. However, the reality, as every economist knows, is that this perfect world of markets does not exist. Companies exist to make money. Serving the customer can come a distinct second to this objective. To take your health insurance examples, the first thing to note is that insurance companies are not *required* to do any of these things. They are examples only of what is possible. As Julie notes, insurance companies can and do exclude the elderly and people with chronic illness or pre-existing conditions. They also engage in a practice called “recission” which is the cancellation of a policy for an alleged failure to disclose a pre-existing condition. This is often done on extremely flimsy grounds once the insured has developed an expensive medical condition, sometimes in the middle of treatment. This situation is well-documented in the US.
People unable to pay for insurance would have to hope that a charity would be available to provide care for their particular illness. The NHS was created precisely so that we would no longer have to rely on the kindness of strangers. That is why it enjoys the strong support of the populace.
Are we not in danger of conflating two (or three) issues here. There is, on the one hand, the issue of whether taxpayers should pay for health care in general; secondly, there is the issue of who should provide healthcare; thirdly, there is the issue of whether – if it is believed that most people should pay for much of their healthcare (through saving, insurance, co-payments etc) – whether the state should pay for the healthcare of the poor. In almost every developed country in the world the state finances healthcare either for everybody or the less well off but does not actually provide all or the vast majority of healthcare. Canada and the UK are exceptions – and I am afraid that the results are not good. Very often the false dichotomy of the US versus the UK system is put forward. In the US the government spends more or less the same as in the UK in a highly regulated and hugely distorted system. It is not a model that anybody would copy. Most models in western europe and Asia have considerable private provision and/or private finance. I would suggest that a move to much greater private provision would be hugely beneficial. It would also be beneficial to have much more private finance. Without that, you will never overcome the moral hazard problems (that are leading the government down an ever-more paternalistic route in other policy areas) and you will not get innovation in provision and finance. I am afraid, Julie, that your description of car insurance and its comparison with health insurance is a little wide of the mark. Insurance is not a sophisticated form of gambling at all. And you say that everybody gets ill. Does everybody not die? But, have we not had life insurance for 300 years? Some kinds of insurances provide packages of services as their benefit too (as you would expect with health) – some provide cash sums, some provide indemnity, some provide the service itself. It is certainly necessary to have an insurance market (at least for larger risks) that involves level premiums for increasing risk, but saving should have a role to play as well – especially for end of life risks. We can be more imaginative. In answer to the person who asks if those of us who do not agree with the NHS have had bad experiences, let me say this. I disapproved of the NHS long before I had any experience of it at all. Since having children, the experiences have been awful – normally at the human level but sometimes at the medical level. I currently have a relative with serious osteoporosis and several other complaints. She discharged herself from a leading hospital (having to take somewhat dangerous oxygen tanks home with her) because she was in permanent agony because she was only allowed one pillow and could not sit properly (“one pillow per patient” she was told) and, of course, because of the risk of infection you can’t take your own in. The medical care is somewhat “iffy” too, but then the combination of problems is complex, so I am putting that to one side. The impression is given that, after 60 years of the NHS we would not have healthcare without it. The experience of all developed countries in the world – as well as the period before 1947 in the UK – is that we would. Remember what happened in 1947. There was a desire to “fill in the gaps”, “build on existing systems” and so on – that is what Beveridge wanted. Healthcare for males in work (and often their families) was pretty good – but there were gaps, that is true. Bevan came in and effectively nationalised the whole system from top to bottom. Was Beveridge wrong? Are nearly all other countries in the world wrong? Or was the person who nationalised everything from steel to power, to the Bank of England to healthcare wrong? It is dangerous to judge the validity of an argument by the number of its proponents but I think that Bevan was very, very wrong.
Philip, it is worrying to hear that your family is not having a good experience of the NHS and that your experience of it exactly matches your expectations that you said were pretty low before you encountered it.
It sounds as if the NHS had a bad press for you before you first encountered it so it must have been alarming to have to use it. It sounds as if you felt that you were not getting anywhere – you wrote that the medical care was “iffy” too and not up to standard so it sounds like you have lost any confidence or trust? It makes sense that you think as you do, if that has been your only experience of the NHS.
It is worrying that not enough pillows were not provided. I hope that your relative is doing better.
I rang my local hospitals and they said that patients are allowed lots of pillows.
My mother had lots of pillows. I am a bit confused by what you wrote.
i have been reading the posts here, and find it incredible, i know our nhs has faults, but i would state clearly that relying on one OECD report to support the fact that you think the NHS should be privatised, liberalised or whatever term you want to use is a bit niaive. There are lies, damned lies and statistics, to use a famous quote. there is no real comparator internationally as all the systems are slightly different as are the demographics and spend per patient and patient outcome. so it really depends on what is being compared.
This is a lady who has used both NHS and the american system have a read
http://www.dailymail.co.uk/health/article-2105680/This-woman-emergency-op-Americas-hospital-stars-NHS-So-did-best-care.html
even our own government states ” Following criticism of and controversy over such an attempt in 2000, the World Health Organization (WHO) has decided not to publish health system rankings, and is not anticipated to do so in the future. It has simply not proved possible to create a satisfactory way to compare entire complex healthcare systems. in its annual report http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_112157.pdf
and as for deregulating Doctors and nurses, there would be a lot more shipmans and allitts if this was allowed 🙁 and at present it is a criminal offense to pretend to be a health care professional, so you are in fact encouraging people to break the law 🙁 There are some professions where people are indeed able to practice without registration, but fortunately at present many of the health care professions people do need to have undergone recognised training before they can use their professional titles. I guess you are a person who would think that a health care assistant who has undertaken a level 2 NVQ knows as much as a Registered Nurse who has undertaken a 3 year course. i know who i would rather look after me when i was ill.
Why should our health care be sold off, to private companies. WE know it didnt work before, people only need to look back to prior to 1946 to see how bad the health of the nation was, how did people manage to see Doctors, go to hospital for treatment, what was life expectancy then for the general population! enough said.
if you want a private health care system, fine go live in USA or one of the other countries you have named, but let us keep our NHS, the scandanavian countries all have some form of community welfare, but i notice they are never used in these reports when we are being compared, its always USA and europe, we can learn a lot from Scandanavia interesting comments here, from people in different countries
A friend was in the US and said he saw a man lying on the floor outside a hospital with a bleeding leg and the ambulance men refused to move him becuase he did not have insurance and they had called for an ambulance for a hospital that would treat him without insurance but they would not pick him up and take him there. The man was lying on the pavement bleeding. My friend said in America healthcare is like in the third world. An American lady I met said that in the US, every time you visit your doctor, your insurance goes up, like when you call out the AA. So it is bad news if you have a long-term condition. No wonder faith healers do so well in the US. They can’t afford anything else.
A friend was in the US and said he saw a man lying on the floor outside a hospital with a bleeding leg and the ambulance men refused to move him becuase he did not have insurance and they had called for an ambulance for a hospital that would treat him without insurance but they would not pick him up and take him there. The man was lying on the pavement bleeding. My friend said in America healthcare is like in the third world. An American lady I met said that in the US, every time you visit your doctor, your insurance goes up, like when you call out the AA. So it is bad news if you have a long-term condition. No wonder faith healers do so well in the US. They can’t afford anything else.
Four points worth making here:
1. The hospital would have been acting illegally in the US
2. None of the bullet points Richard proposes are features of the US system
3. Though it is true that care provision in some parts of the US system is poor, in other parts it is way ahead of the UK (though that is not the point)
4. 50% of healthcare in the US is financed (and much of it provided) by the state and most of the rest is so state controlled that the cost is shocking – including the subsidy for employer-funded plans, which causes no end of problems.
Why do people bring up the US in these contexts, rather than, say, Holland or Switzerland?
Philip: My understanding of Richard’s points above is that what he would like to see in the UK is a completely deregulated medical industry, to take the place of the citizen-funded and government-provided health service we currently enjoy. The US free-for-all, even while subject to regulation, is probably the closest approximation to that in the Western world. There is no universal access, and cover depends on the type of service you are eligible for (e.g., Medicare, Veteran’s Administration, employer insurance, or individual insurance).
By contrast, In Holland and Switzerland, health insurance may be privately provided, but cover and access are tightly regulated.
It is for this reason comparisons are made to the US “system” rather than to the systems in Holland or Switzerland.
On your other points:
Yes, the hospital was most likely acting illegally in refusing emergency care before asking for payment. However, this point is not one which supports complete deregulation; in fact it is an argument against it. In a completely deregulated environment a hospital would have no duty or incentive to treat patients who cannot pay.
Yes, the cost of providing health care in the US is shocking. However, this is due to a variety of things, including the fact that 30% of the entire health care bill is spent on administrative costs which have nothing to do with providing actual care. Much of this is due to the plethora of different plans with different eligibility requirements, differing cover, and differing payment obligations. None of this would disappear with deregulation as the different insurance companies and health care providers would compete to keep costs down, and patients with expensive illnesses away.
But so much care in the US is financed and provided by the state (much more than in Switzerland, I believe, though I must admit I have not checked figures). And the sector is incredibly heavily regulated. One of the first Friedman papers I read as an undergraduate was on how the US medical professions combined restrictive entry with price discrimination not to serve the poor but to raise costs and rents to the professions. The problem is that the US model is a bit like PFI – just as likely to exhibit the worst features of both state and private systems as the best. I am afraid that, if you think that people do not get left untreated in the NHS, you will get a shock at some stage.
But, you are correct, Richard’s point was about complete de-regulation, so cherry-picking the best of the EU systems is probably not appropriate either. I think that the argument probably needs to be conducted from first principles.
I have never read such uneducated drivel in my entire life.
Richard Wellings clearly has very little understanding of the health care and would do better to keep his naive/ignorant thoughts to himself.
Sadly this country is run by a lot of corrupt charlatans who will happily use this kind of drivel to back up their reckless privatisation of the NHS.
@Anonymous – It would be helpful if you provided some concrete arguments to back up your criticisms…
Richard – He/she doesn’t have any concrete arguments, hence the personal abuse.
This is Taliban economics…fundamentalist beliefs of zealots whose religion worships only one god, The Market. No amount of rational argument will deter these fundamentalist economists from their misguided beliefs. As the Taliban in Afghanistan were prepared to destroy priceless ancient buddhas in the name of their religion, so these fundamentalist economists are prepared to destroy the very society that has nurtured and educated them. They should be ignored and consigned to the scrapheap of history, along with the rest of the Chicago school of economics and the followers of Milton Friedman.
The arrogance of the declarations underlying the IEA’s ‘radical regulatory reform’ is breathtaking. To claim that abolishing compulsory licensing of medical professionals is the key to enabling the private healthcare market to increase productivity is the height of stupidity and naivete. There was a time when there was an unregulated healthcare market of the type that is being advocated by the IEA, it was called the Middle Ages, when life expectancy was 35 years and when 2/3 of children died before they were 4 years old. The Medical Act of 1858 established for the first time a statutory body to regulate medical education and medical qualifications, and established the medical register which continues to this day. Previously anyone could call themselves a physician; and quacks and charlatans were able to operate with impunity. And this is what the IEA is seriously suggesting in the 21st century…turning back the clock 150 years to when ordinary people were at the mercy of unscrupulous individuals?
“Patients relying on brand names and voluntary associations to ensure quality” – the person who wrote this does not understand medicine, history, or people. How can an 80 year of woman who has fallen and fractured her hip choose a ‘brand name’ doctor? How is she to tell who is a charlatan and who is a genuine surgeon? Why should she have to when she is in pain and distress? How does a mother in the middle of the night know that the ‘low-cost medical professional’ from abroad is competent enough to cure her child and not to kill her child?
The study of economics should be accompanied by the compulsory study of ethics, social science, human behaviour and history. The production of economists with these irrational and unevidenced beliefs coming out of our universities is an enormous concern, for they are advocating the breakdown of social structures that have been negotiated over many years for the benefit of us all. Sadly there will always be politicians who take these fundamentalist economists seriously, and this can have profound and lasting effects on society, such as in Chile and Argentina who still bear the scars of the 1970’s.
I challenge the IEA to do some real analysis on their regulatory proposals. Do an impact assessment, and Instead of only looking at all the wonderful private healthcare beds that will open, all the profits going private companies and dividends to shareholders… look at the cost in human terms…how many people will be damaged, killed and maimed by unleashing unregulated ‘doctors and nurses’ on the public? How many people would scarred by botched cosmetic surgery, how many more PIP breast implants scandals would result from an unregulated supplier markets, how many children and mothers will die in childbirth as incompetent midwives and charlatans botch deliveries? How many patients will die at home from being overmedicated by incompetent ‘low cost medics’ from abroad? How many cheap dud antibiotics from the third world could be let loose on an unknowing public in an epidemic causing unnecessary deaths? How many people could one incompetent surgeon kill as there would be no regulatory body to check him and no register from which he can be excluded? And he would have no concerns about being sued as his patients will have ‘opted out’ of their right to clinical negligence claims.
What would be the true cost of rolling back all the progress of the last 150 years just so that the Market can be freed up from all regulation? I challenge the IEA to take a real hard look at what it is proposing….or is human suffering something it is prepared to cause in order to achieve its aims, and so has negligible costs attached? ‘People are expendable in an unregulated market’ – is that the mantra fundamentalist economists whisper to each other?
If the IEA believes that increasing human suffering is a price worth paying for unleashing the market, then say so instead of hiding behind a pseudo- academic facade which masks these beliefs.
This is a spoof, right?
Anonymous – I had also rather suspected that you previous post was a spoof.
Every day you rely on safety-critical goods and services that are provided by unlicensed individuals. This does not mean that they are unqualified or incompetent or that they or their employers do not have to meet legal standards and do not have to take out insurance (and how expensive would their liability insurance be if insurers though that they were dodgy?). Licensure does not ensure quality – far from it, as Dame Janet Smith pointed out very clearly in her enquiry – in fact it gives a false sense of security.
What’s more, in markets individuals matter. It is in socialist systems that individuals are expendable as part of the master plan. You only need to look at North Staffs and Basingstoke to know that – the problems were widely known locally – yet people had no choice under socialised monopoly provision.
HJ – you are being entiirely disingenuous. Dame Janet Smith may have pointed out that licensure does not ensure quality, but her recommendation was not to dispense with regulation, but to strengthen the fitness for practice process to protect patients from dysfunctional and underperforming doctors. She welcomed the changes in the NHS to improve the quality of health care and facilitate the detection of aberrant practice, she did not say do away with it all and let the hidden hand of the market protect the public. I have no doubt she would abhor the misuse of her name to support your incoherent proposals.
Medicine was a collegial self regulated model until the 1990’s when the regulations were reformed in response to a number of scandals. “the collegial model adopted by the profession left it fatally vulnerable to the problem of “bad apples”: those unwilling, incapable or indifferent to delivering on their professional commitments and who betrayed the trust of both patients and peers. Weak administrative systems in the NHS failed to compensate for the defects of the collegium in controlling these individuals…Though its vulnerability to bad apples had been present since the founding of the 19th century profession, it was the convergence of social and political conditions at a particular historical moment that transformed the scandals into an unstoppable imperative for reform. Huge public anger, the voice permitted to a coalition of critics, shifts in social attitudes, the opportunity presented for imposing standards for accountability, and the increasing ascendancy of pro-interventionist managerialist and political agendas from the early 1990s onwards were all implicated in the response made to scandals and the shape the reforms took.” (Dixon-Woods Social and Science Medicine 73 2011)
Note “huge public anger”. How much anger do you think the public would express if all regulation of doctors were to be scrapped? Do you think the public would understand that preventing harm to patients can be dispensed with in order for the market to be unleashed based on no evidence of benefit at all, other than to make the 1% even richer?
It is an utter disgrace to selectively cherry pick evidence and twist it to support malevolent proposals that will harm a trusting public. Are you so naive not to understand that the purpose of licensing of doctors is to PREVENT harm to patients…what is the point of relying on the honesty of law abiding suppliers when we know there will always be people who do not care about the harm they cause to people and put greed above all else? Do you think an unregulated market wll prevent harm from happening? Taking out insurance against bad things happening will not prevent people being killed, it will only partially compensate the grieving relatives or damaged individuals, this I would suggest is entirely unacceptable and seems to me the kind of callous attitude displayed by Stalin, Pol Pot and Mau Tse Tung.
“In markets individuals matter, in social systems individuals are expendable”- what utter nonsense. In markets the only individuals that matter are the ones who are rich enough and powerful enough to look after themselves. Markets care nothing for the vulnerable, the elderly, children and the poor. Markets are about the survival of the fittest, the weakest are left to fend for themselves. Socialist systems are about fairness, and market zealots cannot bear the thought of fairness and equity for all. You spend all your time thinking up ways of destroying society and making it as unequal as possible so that the 1% can live the high life at the expense of the rest.
given the suggestion that national socialist Argentina was somehow a free market paradise, I am not sure whether to take anonymous’ comments seriously. But, there is a serious argument to be had about an issue that is a matter of life and death and that we should take it seriously. On the one hand there are the problems that you point out (if one distills the serious points from the meaningless rhetoric). On the other hand, we must bear in mind that lack of experimentation in health care can easily kill people or make their lives a misery because new treatments are not discovered or tried out on people who may be content with the risks. Also, we have the problem – discussed by Friedman in an important paper – of licensing involving reducing the amount of health care that the poor can afford (whether tax financed or otherwise) and increasing rents to groups of very well off people. Do you remember the prices of specs before liberalisation? It is not just that licensing prevents people from using less-well-qualified people, the ability to licence reduces the number of qualified people.
@ anonymous: “Markets care nothing for the vulnerable, the elderly, children and the poor. Markets are about the survival of the fittest, the weakest are left to fend for themselves. Socialist systems are about fairness, and market zealots cannot bear the thought of fairness and equity for all. You spend all your time thinking up ways of destroying society and making it as unequal as possible so that the 1% can live the high life at the expense of the rest.”
Actually, we don’t and you will struggle with this debate until you appreciate the perspective of those who disagree with you.
I am an actuary. We do not deal with life and death issues like doctors do, but the issues of information asymmetries and so on are the same. As a profession, until 1981 we were entirely unregulated and had no reserved (licensed) roles. Yet, we were all over the life insurance industry – huge demand for our services. The life insurance industry was hardly regulated from 1870 to 1970 yet in 100 years there were hardly any insolvencies (two to be precise) and none that affected policyholders. Serious problems did not arise until the Equitable when statutory duties for actuaries had been around for nearly 30 years – in fact the problems arose quite soon after actuaries were given statutory dutie and the industry became heavily regulated though this may be a coincidence. You describe, of course, problems (pre-1990) in a monopoly profession which would have no incentive to keep itself clean. It controlled entry and had no competition. The opposite was true in the actuarial profession and reasonably clean and professional it was (such professions hardly devloped in countries where the industry was more heavily regulated).
This does not prove the point that HJ and RW are trying to make, but can you not see that they might have a point; that the scorn you heap upon their characters because they happen to hold different opinions from you might be unreasonable? I have to say that, if this is how you conduct debate, the socialist society you desire will not be very social.
I can’t help being amused by the fact that ‘anonymous’ accuses free market advocates as having attitudes akin to those of Stalin, Mao and Pol Pot and then goes on to claim that socialist systems are about “fairness”.
Talk about being self-contradictory!
Licensing prevents the use of ‘less- well qualified people’ in medicine for very good reason – to prevent medical disasters that kill people. ‘Spectacles before liberalisation’ is a pathetically simplistic example to use, medicine is far more complicated that selling cheap pairs of specs…. a dodgy pair of specs is hardly going to kill you. Having your child operated on by a dodgy surgeon or anaesthetised by an unqualified anaesthetist is quite another thing. If economists are to be taken seriously, then they need to at least try to understand the complexities of medicine and the harm that will be done by udeegulating the health market. This IEA article has done nothing other than to expose it as a bunch of radical economist extremists who haven’t a clue about the intended and unintended consequences of their incoherent and childish proposals, and don’t care. It reads like something an uninformed adolescent with no knowledge of the world would come up with in a school debate. You should hand your heads in shame.
And I suggest that you are somewhat misguided about your knowledge of Argentina – the 2001 uprising was a revolt against deregulated capitalism. Argentina, during the 1990s, was the most extreme experiment in neoliberal transformation in the world at the time. They had the most radical program of reforms a la Friedman, which ended up in massive unemployment, impoverishment of more than half of the population, and in 2001, the collapse of the whole economic system. Do you not read modern history? You should. Those who do not read and understand history are doomed to repeat it (Harry Truman).
ps Harry Truman was a US president.
‘Anonymous’ is very fond of being abusive to wards people who disagree with him or her. Of course, they must be childish if they disagree.
Who is suggesting that anyone uses an unqualified anaesthetist or an unqualified surgeon? The issue is about licensure, not about qualifications or competence. There is no evidence that licensure improves standards or patient safety. Once licensed as a medic in this country, you are legally allowed to carry out all sorts of procedures for which you are probably not competent (cosmetic plastic surgery, for example) – licensure creates a false sense of security, not a guarantee of safety and quality.
@anonymous. I suppose if you are not interested in addressing the issues, there is not much point debating so i shall leave it after this one. The potential calamity of the outcome is not the key issue but whether certification rather than licensing will give rise to better outcomes. Better specs, safer surgery, safer insurance companies? Will a removal of monopolies lead to more doctors and better professional discipline or not? These are not issues that can be resolved by saying that people who disagree with you know nothing about medicine and are childish and because medicine is very dangerous it cannot lead to better outcomes as with specs (did you oppose the abolition of the specs monopoly by the way in 1981 – or thereabouts?). You said Argentina in the 1970s and not the 1990s – perhaps you should type more carefully. Yes, I do read history. Friedman was ambivalent about the currency board, would strongly have opposed a situation where EXTERNAL (never mind internal) government debt was built up to such an extent that interest payments alone were 85% of all export earnings and where trade was so heavily regulated. I am just astonished that you think that Argentina was the most radical neo-liberal transformation at that time. Or perhaps it was another typo and you meant the 1890s or something.
‘once licensed as a medic in this country you are legally allowed to carry out all sorts of procedures for which you are probably not competent..” You clearly know nothing about licensing a medic. Licensing confirms your competency after a rigorous test of revalidation every 5 years. If you carried out procedures for which you are ‘probably not competent ‘you would be struck off the medical register for negligence or for practising medicine beyond your capabilities. If we are to have a sensible debate, then slandering the medical profession is not very helpful. Medics are continually appraised, peer reviewed, subject to clinical governance procedures, and have to submit evidence that they keep up to date with current practice, the sytem is designed to pick up anyone practising beyond his capabilities as soon as possible before he/she does harm. The issue IS about licensure… how can you ensure that professions who are performing invasive procedures on people are qualified and competent if you don’t have a licensing procedure? Who is going to assess if they are qualified and competent if you don’t have a body like the General Medical Council doing it? I have already shown that history has demonstrated that self regulation did not work, and if self regulation did not work, then no regulation would be even worse. If you perceive these criticisms of your ideas as ‘abuse’, you would not last one day in the medical world…we are trained to critically evaluate each others work constantly, this is one of the mechanisms to ensure good practice, and we are trained to base our expert opinions on robust evidence. The ideological reforms that you propose have no basis in unbiased generalisable research, and are thus, worthless.
Anonymous – I am afraid that it is you who knows nothing about licensure. There has been no revalidation procedure in the UK and one is only just being introduced. Most countries have no such system. This means that there is no evidence that it works.
Here is what Niall Dickson, Chief Exec of the GMC wrote only last week:
“Most patients think that there is a system in place already for checking that doctors are competent and up to date. They believe that, as in most jobs, and certainly those where there is a safety critical component; doctors are appraised and given feedback on their professional performance.
In fact there is no universal system of that kind and only when revalidation becomes a reality will every doctor with a licence to practise become part of such a scheme.
What is more, revalidation and the systems which underpin it should mean that doctors have access to the support they need to maintain and improve their practice.
Over time we believe revalidation will identify problems in some doctors’ practice earlier, and more widely that it will encourage self-reflection. That must be good for both patients and doctors because it will help to improve the care patients receive.
Revalidation is not a panacea and we are not claiming it will produce instant results but it will be the first nationwide system of its kind anywhere in the world. Nor should we understate the scale of what is involved. This UK programme will cover 230,000 licensed doctors and hundreds of organisations. It is therefore hardly surprising that it has taken time to refine and test the plans.
The immediate upside of revalidation, even before it starts, is that employers have been busy strengthening their appraisal schemes and improving the vital systems they run which govern their clinical processes. Both are key to safe care.”
http://www.guardian.co.uk/healthcare-network/2012/jun/08/revalidating-doctors-nhs-view-gmc
So before you castigate others for their ignorance and their supposed naivety, I suggest that you look in the mirror.
Philip, you are the one not interested in addressing these issues, I am ready to debate with facts, not fantasies. I suggest you read Professor Ezequiel Adamovsky, an Argentine historian and professor at the University of Buenos Aires, instead of scoffing at imaginary ‘typos’. The military dictatorship in Argentina after 1976 implemented a neoliberal programme, and the consequence was a drastic reduction of the industrial sector. In Professor Adamovsky’s opinion (not mine) during the 1990’s, Argentian was the most extreme experiment in neoliberal transformation, enacted against a background of systematic violence and murder of the opposition – trade-unionists, college students, protestors, and human rights activists.
A similar cycle of violence, murder and repression in Chile in the 1970s accompanied the neoliberal deregulation of the market. Amartya Sen describes this experience a failure of Friedman-style economic liberalism, the economic reforms having been drafted by Chilean economists trained at the University of Chicago under Milton Friedman. Not much of a legacy for Friedman I would say, but no doubt, you and your colleagues would not agree.
there is nothing liberal about shooting people, but you don’t seem to understand liberalism very well. I am surprised you cite Prof. Adamovsky as an impartial source, but it is now clear from where you are coming. In fact, as far as economic reforms alone were concerned, Chile was pretty successful – certainly compared with any other comparable country. But, to the liberal, of course, the ends never justify the means. Argentina is a different case, a different case entirely. And this really is my last contribution to this string.
HJ, that has got to be the most arrogant response so far, a non medic telling a medic about revalidation. Copying and pasting information from the GMC website does you no credit. Revalidation has been discussed and planned over the last 10 years and is currently being piloted among groups of doctors before being rolled out to the rest. Revalidation aside, medics are continually appraised, peer reviewed, subject to clinical governance procedures, and have to submit evidence that they keep up to date with current practice (CPD). The sytem is designed (even without revalidation) to pick up anyone practising beyond his/her capabilities as soon as possible before he/she does harm.
Medics also have to participate in CPD (continuing professional development) in order to remain in good standing with our professional colleges and we have to submit a CPD return annually with a record of all educational activities over the previous year in order “to maintain and improve standards of medical practice through the development of knowledge, skills, attitudes and behaviour”. Perhaps you could enlighten us as to how economists keep up to date and on top of their game? What system is in place to make sure that they are not a danger to the public? Doubtless it is an equally rigorous procedure.
You have demolished your own arguments anyway, and set out all the reasons why licensing is the key to safe medical care. And if there is no evidence that revalidation ‘works’ as you say, then equally you have no evidence that having no system of licensing works either, and as your proposal carries the greater risks to the public, which do you think they would prefer?
But I doubt if anyone would object to conducting a controlled trial, with an ‘unlicensed group’ in which all the IEA and their families sought their medical treatment from unlicensed and ‘not so well qualified’ doctors for the next 5 years, versus a control group of economists seeking normal medical care from NHS doctors. Then lets count the economic, health and social costs of the two groups after 5 years. The ‘unlicensed’ group would not be able to sue any unlicensed doctors for negligence, but on the plus side, they would have free access to cannabis and opiates, and also be able to have any drug from the pharmacy without prescription? Sounds fair and reasonable?
I rest my case.
As Philip has bowed out of this discussion, to conclude for those of you following the string,…Chile was successful in the end, but not because of neoliberal policies. Milton Friedman (who was an economic adviser to the military dictator General Pinochet) liked to think of it as ‘the miracle of Chile’. In fact, the truth was very different. After the coup which brought him to power in 1973, Pinochet brought in a programme of deregulation and privatisation – state controlled pensions, industries and banks. Real economic output declined by 20% and unemployment went up by 20%. 45% of Chiles population fell below the poverty line. It was only after Pinochet left office, when a programme of ‘growth with equity’ was started that poverty was reduced. Amartya Sen, Nobel prize winner for economics, believed that this improvement was not because of “free-market” policies but because of active public and state intervention. And that is my final word on the subject.
Philip and HJ: I think you must acknowledge that “the market” is inherently amoral. People or companies sell goods or services in order to make money. The driving motive is profit. Now profit is not inherently evil, however there are some who are willing to do evil in order to make their profit. (One example of this in the US is a health insurance company’s willingness to rescind policies on fairly flimsy pretexts when an insured develops an expensive illness, sometimes in the middle of treatment). Richard’s assumption in this article is that a completely unregulated market would operate to keep this at bay. There really is no evidence to support this assumption. The purpose of government is to serve its citizens. It does this by (among other things) putting a brake on the worst excesses of the market. One such function and potential brake is the assessment and certification of medical personnel who perform complex and risky procedures. This is not to say that the state always gets things right – far from it. However, regulation of the market to protect the consumer, in this discussion the patient, is a legitimate function, and is what I expect of my government.
Anonymous – The fact is that I was correct about revalidation, and you were wrong. It is only just being introduced (and the head of the GMC should know).
And as you readily admit, other procedures were in place anyway to pick up anyone who might do harm. So why is licence revalidation needed then? As Philip has pointed out, we are not arguing against certification, CPD, etc. (many other professions have such things) just against licensure which, as Friedman pointed out is a statutory measure used to protect a profession.
You have defeated your own argument.
@anonymous2 – I would put it slightly differently. A market reflects the moral choices made by those who participate in it – but so does government. A market has the restraint imposed of freedom of contract (you cannot force somebody to transact) and a government of a five-yearly election. In a rich and diverse free economy there will be institutions that distinguish themselves by their probity (the London Stock Exchange after 1801 is an example – people tried to get it abolished by Act of Parliament on competition and restraint of trade grounds because it excluded people who did not pay their accounts, but it thrived as a private institution because both investors and companies benefited from the reputation for probity). I am not against professions that certify (or even professions with a Royal Charter for that matter) and their reputation for probity (if upheld) is precisely what would make their members attractive. The question of whether this institutional diversity and potential for competition on the one hand or regulation by a government (made up of imperfect people who can be captured by the profession) on the other hand is more robust is the question we should be debating. A free economy – however rich with institutions – will not produce a perfect outcome; but neither will a government bureaucracy.
I am afraid that I have to correct what is said about Friedman above – and it should probably be removed by the editor, though he is dead and cannot be libelled. Friedman was not an advisor to Pinochet. He met him once for less than an hour and wrote him one letter at Pinochet’s request. Friedman had few stronger beliefs than a belief in floating exchange rates and one of Chile’s worst economic disasters came from – yes – fixing the exchange rate. Friedman said: “I have nothing good to say about the political regime that Pinochet imposed”.
anonymous2 – I have no particular objections to a state-regulated profession as long as it allows competition (then people who feel safer with it, like you, can always choose that), though it may not be stable (in the sense that it would be difficult to prevent the state from favouring its own regulated option)
You are a lunatic Mr Wellings!
HJ you really should stop digging yourself further into a hole…you are making the IES a laughing stock in the medical community trying to defend these irresponsible suggestions that would cause high rates of mortality and morbidity among the population. You are on a hiding to nothing.
Why the big deal about revalidation if you claim it hasn’t happened yet? If it hasn’t happened, then why is Richard Wellings proposing a change in the status quo? Licensing is a just a small part of a system that ‘restricts’ practice to those qualified and competetent. Richard Wellings is suggesting that “anyone should be at liberty to practice as a doctor or nurse, with patients relying on brand names or competing voluntary associations to ensure quality. Ending current restrictive practices is essential to enable private firms to increase productivity in the sector” he says. This could only be brought about by repealing the Medical Act 1983 (as amended by the Professional Performance Act 1995, the European Primary Medical Qualifications Regulations 1996, the NHS (Primary Care) Act 1997, the Medical Act (Amendment) Order 2000, the Medical Act 1983 (Provisional Registration) Regulations 2000, the Medical Act 1983 (Amendment) Order 2002, and the National Health Service Reform and Health Care Professionals Act 2002, The European Qualifications (Health Care professions) Regulations 2003, the European Qualifications (Health & Social Care Professions and Accession of new Member States) Regulations 2004, the Medical Act 1983 (Amendment) and Miscellaneous Amendments Order 2006, and The European Qualifications (Health and Social Care Professions Regulations 2007). The first medical act, was the Medical Act of 1858 which was passed in order to regulate doctors in the UK and because “it is expedient that Persons requiring Medical Aid should be enable to distinguish from unqualified practitioners”. So if you and your colleagues are seriously suggesting ‘ending current restrictive practices’ of the medical profession, then the Medical Act would have to be repealed, and it would no longer be a criminal offence, as it is now, for an unqualified person to practice medicine. Thus opening the way for any tom, dick and harry to be let loose on an unsuspecting public. Is this what you are seriously advocating? Or perhaps you just wish to abolish medical education altogther…I mean after all, why would anyone want to go through 6 years studying medicine as an undergraduate, 5 years to train as a specialist, pay enormous amounts of money every year for medical indemnity insurance, membership fees of the General Medical Council and the Royal College, as well as spend hours and hours reading medical journals and attending clinical meetings, writing papers and being peer reviewed……why do all this when I could simply just set myself up as an unqualified, or ‘less well qualified’, medical practitioner with no governing body to quality assure my work or take me to task if I maim or kill patients. Why would I bother?
You get my point? Licensing is a mere drop in the ocean,
Competing voluntary associations to assure quality?. Oh yes brilliant idea, of course there would be no conflict of interest there would there? No perverse incentives for a ‘voluntary organisation’ to ensure that their ‘doctors’ were passed as ‘quality assured’? Apart from the fact that the whole system of clinical governance and quality assuring doctors costs the state, and the doctors, a small fortune, how are voluntary organisations going to afford to do it? Who is going to quality assure them?
The whole idea is laughable, I can’t believe I am spending so much time explaining all this to you. Debating with the ignorant takes up so much more time that debating with people who actually have a smidgeon of knowledge of what they are talking about.
anonymous2 – well at least you got Philip to admit that a 2 tier system would be necessary. He says he doesn’t mind having a “state-regulated profession as long as it allows competition (then people who feel safer with it, like you, can always choose that) ” But for ‘people who feel safer” you can insert “people who can afford it” or “people who can tell the difference between a quack and a doctor”, This would exclude the poor, the learning disabled, the vulnerable elderly, children etc.etc, all the people that it is the responsiblity of government to protect.
So here we have it, the proposal to abolish compulsory licensing of the medical profession is not so insane as it appears at first. The agenda is unmasked. They know perfectly well that those people intelligent and rich enough would never choose a 2nd class medical service, so there has to be one for the rich and one for the poor. They really can’t bear the equality of the NHS, the fact that everyone is treated the same no matter how much they do or do not contribute. I hope they never have a car accident, and have to rely on our world class emergency services to send in their medics by helipcopter to treat them at the roadside, perform emergency surgery on the tarmac, chest drain, CVP, IV fluids. fly them back to an NHS hospital with one of our superb ICUs, where they are treated by top rate neurosurgeons and or cardiothoracic surgeons, all without being asked for a penny. Because if they did find themselves in that position, they will be in an awful bind, having to rethink why they have been seriously advocating the destruction of the NHS….all in order for someone somewhere to have the choice of buying a cheap pair of specs on the internet….nothing like throwing the baby out with the bathwater.
And as for Milton Friedman and Chile. Philip is being rather economical with the truth. Friedman wrote to Pinochet, that is true, but in the letter he completely ignored Pinochet’s human rights violations and instead denounced the trends towards socialism which ‘reached their logical and terrible climax in the Allende regime’. He praised Pinochet for reversing this trend. In 1982, in a Newsweek article, Friedman described Chile under the dictatorship as an ‘economic miracle’ despite the dramatic rise in poverty and unemployment. He praised the dictatorship who had sharply reduced the role of the state. He visited Chile in 1975 and gave a series of lectures on free market economics, meeting with Pinochet and then later writing the letter described above. He may have been a proponent of individual liberty, but Chile was a blind spot for him, but then he would say that wouldn’t he? The Chicago School had trained the economists who advised Pinochet, so to admit the failure of free market economics in Chile, would have been an admission of failure of his lifes work. Sadly, disciples of Friedman still have the same blind spot when it comes to acknowledging the devastating effects its policies have on 99% of the population.
Anonymous – yes dealing with the ignorant certainly does take time and, as a result I have no more time for you.
You do not want to learn or debate, you just want to abuse anyone who has the temerity to think for themselves rather than conforming to your self-important view of the world.
There is a huge body of research about the downsides of medical licensure and you would be hard put to find an independent voice who has looked into the issue in any detail who is in favour of it. I don’t care what the ‘medical community’ think – as we have seen recently over the issue of pensions, self-interest is their over-riding priority.
Incidentally, why is it necessary to spend 6 years as an undergraduate studying general medicine if you go on to be (for example) a joint replacement surgeon? Do we make all engineers do a general engineering degree first in order to, for example, specialise as an electronics engineer? Perhaps this is why cataract operations on the NHS are carried out by consultants at a cost of between £800 and £1600 (and there is a waiting list) when Sightsavers International do it using specialist technicians (still highly trained) to the same standard (and yes, it is the same standard – I have been involved in this charity for many years) at an average cost of just £17.
Anonymous – “They really can’t bear the equality of the NHS, the fact that everyone is treated the same no matter how much they do or do not contribute.” Try telling that to the victims of Staffs Hospital. Or to the 46% of diabetes patients recently revealed not be receiving proper checks. Or to older patients that the NHS has discriminated against.
Insurance-based systems allow users to choose the care they want and providers must provide it – or they don’t get paid. The NHS let’s the providers do the choosing.
I think the editor should stop this comment thread as it is wasting everybody’s time. Anonymous can distort the truth about many things that are simply too complex to continue debating on this blog. He can use other fora to just decry people with whom he disagrees as laughable, ignorant etc, but I do not see the sense in continuinig to use this forum to do so. Just one example of how he/she distorts things in order to try to win an argument (with no obvious interest in the truth): I said: “I have no particular objections to a state-regulated profession as long as it allows competition”. He/she said: “anonymous2 – well at least you got Philip to admit that a 2 tier system would be necessary”. I neither said that it would be necessary nor desirable, simply that I have no particular objections to it. People can follow the thread this far if they wish and draw their own conclusions.
@Anonymous – I’m afraid I can’t see the relevance of your discussion about Chile to the debate on freeing up the healthcare sector. Moreover, references to Friedman’s brief interaction with Pinochet are often used to smear an economist who did a great deal to advance liberty, including campaigning against the draft. Friedman’s trivial personal association with Chile may be contrasted with the disgusting behaviour of leading socialist intellectuals who for decades excused the crimes of the Soviet Union and deliberately covered up or played down the famine in the Ukraine and other Stalinist atrocities.
@Richard – the reason that ‘Anonymous’ is attacking Friedman (as opposed to his arguments) is that Friedman famously destroyed the case for medical licensure. As ‘Anonymous’ cannot counter Friedman’s argument he is resorting to the well-know ‘ad hominem’ attack tactic.
We have now decided to end the comments thread for the reasons discussed above. Thank you for all your contributions.