Healthcare

Calm down, Guardian: the NHS is (still) not being privatised


On Sunday evening, Twitter exploded with rage.

That, admittedly, doesn’t mean much. If you have ever been on Twitter, you will be aware that that medium explodes with rage at least every other day. But this time, the rage explosion was about an issue that I happen to know a little bit about, so I thought it might be worth a closer look.

The trigger was a Guardian article about how the NHS was being secretly privatised (yes, again). The paper reported:

“The amount of the NHS budget going to private healthcare firms has reached unprecedented levels […]

The Department of Health and Social Care handed a record total of £9.2bn last year to private providers such as Virgin Care and the Priory mental health group […]

That is an increase of 14% from the £8.1bn that went to profit-driven healthcare companies in 2014-15 and £410m more than the £8.77bn they received in 2017-18.”

According to the Guardian, this constitutes a “relentless rise in NHS privatisation”. They also cited Dr John Lister of the campaign group Keep Our NHS Public, who said:

“The extra £415m spent on private providers in the last year in the last year is a significant 5% increase and makes a nonsense of Matt Hancock’s pledge of ‘no privatisation on my watch’”.

The article is a perfect example of how a complete non-story can go viral if it confirms a preexisting popular narrative. Healthcare spending rises almost every year in real terms, and literally every year in nominal terms. So if you report nominal figures, as the Guardian does, the current level of healthcare spending will always be “unprecedented” and a “record high”. This is true of overall spending, and it will also be true of most subcategories: spending on GPs, spending on nurses, spending on ambulance staff, spending on midwifes, spending on psychiatrists, spending on managers, spending on admin staff, and so on. So why not private providers? Why should spending on private providers not also be the highest it has ever been?

But forget overall spending levels. The NHS budget is about £125bn, which means that spending on private providers accounts for about 7.3% of the total. There was a time when the NHS involved almost no private providers at all, so if you choose to compare this to a year from the distant past, it would represent a substantial increase. But there has been no recent increase; in fact, 7.3% represents a small decline compared to 2015 or 2016. (It is unchanged from 2017.)

By international standards, this is chicken feed anyway. Unfortunately, we cannot directly compare the 7.3% figure to its equivalent in other countries, because it does not have an “equivalent” as such. But we do have figures for the hospital sector in various other countries, which usually accounts for the bulk of healthcare spending. More precisely, we can get a breakdown of the hospital sector by hospital ownership. This is shown below.

Breakdown of the hospital sector by ownership (% of hospital beds), 2018 or latest available year


-OECD.Stat (2019)


(Note that a “private” hospital, in this context, is a hospital that is privately owned and run, but open to all patients, on the same terms as a publicly owned one. A luxury clinic, which is only open to fee-paying patients or patients which private supplementary insurance, would not be included, since it would not be considered part of the statutory healthcare system.)

We can see that in France, not exactly a hotbed of free-market extremism, two out of five hospitals are privately owned and run.[1] In Austria, Portugal, Spain, Israel, Italy and Australia, the market share of the private sector is not much lower than in France. In Germany, the private-to-public ratio is about 3:2, meaning that there are more private hospitals than public ones (on a size-adjusted basis). In Belgium, the vast majority of hospitals (three out of four) are private, and in the Netherlands, the state does not own any hospitals at all.

As I have shown in my book Universal Healthcare Without The NHS, all of those countries offer universal access to healthcare, irrespective of ability to pay, and they tend to achieve substantially better healthcare outcomes than we do. So even if the share of the private sector were increasing (which, to repeat, it isn’t) – what exactly would be the problem with that?

In summary: the share of the NHS budget that is spent on private contractors is

a.) not increasing,

b.) has not been increasing for years, and

c.) even if it were, this would merely take us a little bit closer to the international norm.

I know that telling someone to “calm down” has never calmed anyone down. But seriously, Twitter: you really need to calm down.

 

Dr Kristian Niemietz is the author of the book “Universal healthcare without the NHS. Towards a patient-centred health system“.

 



[1] More precisely, two out of five hospital beds are privately owned. Since hospitals vary hugely in size, it is more meaningful to compare the number of hospital beds rather than the number of hospitals per se.

Head of Political Economy

Dr Kristian Niemietz is the IEA's 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).


3 thoughts on “Calm down, Guardian: the NHS is (still) not being privatised”

  1. Posted 26/07/2019 at 16:59 | Permalink

    I suspect that the patients in NHS hospitals are fed with privately produced food. To my knowledge, the NHS does not own or run farms that supply food to patients. Does it have plans to do so?

  2. Posted 01/08/2019 at 10:10 | Permalink

    @michaeljames
    business is changing and becoming more challenging so the NHS using part of their budget to support what they are trying to achieve why not unless they start to own their own and operate farms and supply food ; )

    @DRKRISTIANNIEMIETZ
    I’d like to know and nobody has published is how the £9.2b budget is being used for private providers and is there a private company that gets the lions share

  3. Posted 15/04/2020 at 10:36 | Permalink

    I presume that the patients in NHS medical clinics are taken care of with secretly created nourishment. As far as anyone is concerned, the NHS doesn’t claim or run cultivates that supply nourishment to patients.

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