Plurality in healthcare provision is integral to patient choice


Trade, Development, and Immigration
A while ago, a friend from abroad who was visiting me in London asked me what I thought about the government’s plans to privatise the NHS. Slightly irritated, I assured him that no such plans existed. But he insisted that they did: he had read about it in a newspaper on the way from the airport.

It is difficult to explain this peculiar ritual to somebody who does not live here, but conspiracy theories about ‘secret plans’ to privatise the NHS are part of the cult around the health service. The Americans have their Area 51, we have NHS Privatisation Paranoia. It is hard to tell when this started, but it must have been a while ago. Take this quote:

‘Labour’s summary of the ideas […] says they “clear the way for a massive shift of resources from the NHS to private companies”. […] [P]rivate companies (Labour says) are to be enabled to asset-strip the NHS. The NHS must pay full price to the private sector, which will be allowed to pillage NHS resources.’ 

It could easily be from any of today’s newspaper, but it is in fact from 1983.[1] The NHS has been ‘privatised’ so many times that one wonders how it can still be around.

To be fair, it is true that nowadays, the dividing line between the NHS and private healthcare is less like the Berlin Wall, and more like the US-Mexican border: still fiercely guarded but not impermeable. Primary Care Trusts (PCTs) now spend about 8 per cent of their secondary care budget on healthcare services delivered by independent sector providers, up from just 4 per cent in the mid-2000s. Add in other voluntary and local authority providers, and non-NHS actors account for a ‘market’ share of 12 per cent. This is still a very low proportion compared to European social insurance systems: in France, a country one can suspect of many things but not of rampant market fundamentalism, the private sector accounts for a third of all hospital beds. However, given where the British system is coming from, it is quite a change, which could yet go further. As it should. The NHS has benefited from a dose of competition, so why not increase the dose?

It is important to note that nobody is ‘forcing’ for-profit healthcare on an unwilling public. Private sector providers can only gain a foothold if patients voluntarily choose them over NHS providers, or if PCTs choose them when awarding contracts. The only way to purge the NHS of private sector presence would be to abolish patient choice, and to undermine the autonomy of local commissioners. The NHS would once again have to become the top-down service of old. That sounds a lot less appealing than ‘saving our NHS’, but those are the options we are facing.

This article was originally published by The House Magazine.

[1] The Times: ‘Partnership with private sector would help NHS, circular claims’, 1 June 1983.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

2 thoughts on “Plurality in healthcare provision is integral to patient choice”

  1. Posted 16/10/2014 at 21:09 | Permalink

    This is misguided and takes no account of real life

    GP,s are not trained in the evaluation of and negotiation of large population based healthcare contracts This is why the have to expensively employ management consultants

    Private providers have received guaranteed payments for medical work even when patients have not taken up their services this is grossly unfair

    Private providers are often technically poor as the recent Taunton eye contract fiasco and the poor results from the Circle health Huntingdon contract demonstrate

    As modern hospital medicine is technically complicated it is expensive in both equipment and staff to have the spare capacity that is necessary for choice

    It would be far better for senior hospital staff to focus relentlessly on raising healthcare standards rather than chasing artificial contracts

  2. Posted 29/10/2014 at 13:54 | Permalink


    “it is expensive in both equipment and staff to have the spare capacity that is necessary for choice”

    Spare capacity is expensive, but a requirement of medicine regardless who provides it. People don’t get sick at a uniform rate, accidents don’t happen at a constant rate and babies are not born on demand. Spare capacity is required who ever is in charge.

    You cite a couple of examples you claim are evidence of private failings, the better known failings in health are within the NHS structure. Not that specific failings in one or other is an argument for anything you have to look at aggregate figures.

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