A review of the election manifestos: healthcare

On healthcare, the party manifestos make for some dreary reading. They remain almost entirely stuck in the current NHS orthodoxy.

The manifestos of the Conservative Party, the Labour Party and the Liberal Democrats are largely interchangeable for one another, differing more in tone than substance. In a blind test, even a seasoned health policy wonk would struggle to guess which policy is from which party. More, they would even struggle to guess what year those manifestos are from, because they are also largely interchangeable with what those parties would already have said 10, 20 or 30 years ago.

There is a lot of talk about preventive care, which, in practice, is always code for more nanny-statism. There is talk of “care in the community”, “integrated care” and “coordinated care”, which, for health policy veterans, has a distinct Groundhog Day feel, because these buzz phrases have been around for about as long as the NHS itself. Without a delivery mechanism, these ambitions do not amount to much, and if such a mechanism were readily available, we would probably have used it by now.

Otherwise, the manifestos mostly focus on inputs, promising more healthcare facilities, more healthcare staff, more medical equipment and more medical technology of various kinds. On processes, there are a lot of unspecified promises to “modernise”, “transform”, “tackle”, “focus on”, “develop”, or “harness” this or that, but again, no mechanism to deliver.

The LibDems want to introduce all sorts of new “rights” and “guarantees”, for example, to get a GP appointment within a week, or free NHS dental check-ups. Fine, but what happens if I don’t get that appointment? How do I enforce my theoretical “right” or “guarantee”?

Labour talk a good game about how “[i]nvestment alone won’t be enough to tackle the problems facing the NHS; it must go hand in hand with fundamental reform”, but they do not hint at anything that looks remotely like a “fundamental reform”.

They do say that “[r]ecognising the urgent need to bring down waiting lists, Labour will use spare capacity in the independent sector”, but it is not clear what they want to do that is different from what is already possible today. Although the NHS is mostly an in-house service, it does buy some services from independent sector providers: this accounts for about 8% of its budget (not counting GPs, who are technically self-employed private contractors). That share increased in the first half of the last decade, but it has since stalled at that level. If Labour want to increase the take-up rate of private sector contracting – what is their mechanism for doing so? What is their explanation for why contracting with the independent sector has stalled, and what do they want to do about it? Without answering that question first, a promise to “use spare capacity in the independent sector” is not worth much.

The Conservatives mostly boast about by how much they have increased the NHS budget, and by how much more they want to increase it. Otherwise, they revive the old shibboleth about “reducing the number of managers”. The NHS’s problem, though, has never been that there are too many people who literally have words like “manager”, “coordinator” or “administrator” in their job title. “Administrative spending”, in this narrow sense, has never been high in the NHS compared to other health systems. But an organisation can be undermanaged as well as overmanaged, and that can be just as inefficient. When a consultant arrives at a hospital, and they cannot start operating because some of the tools, the equipment, the medical files, or the support staff they need are not in place, that is a source of inefficiency, even if administrative spending is zero. When we talk about “too much bureaucracy” in the health service, what this means is that clinical staff have to waste too much of their time on what are essentially administrative tasks, not that there are too many managers twiddling their thumbs.

The Green Party, meanwhile, goes full Corbynite on health (and much else). Their diagnosis of the NHS’s current woes is that “deliberate Conservative under-funding” has “seen the NHS undermined and at risk of collapse, paving the way for further privatisation”. Their solution is an “NHS Reinstatement Bill to protect our NHS from creeping marketisation and privatisation”, and “additional annual expenditure of £8bn in the first full year of the next Parliament, rising to £28bn in total by 2030”.

There are two problems with this. The first one is that the UK is already in the global top 10 in terms of healthcare spending as a proportion of GDP (although we are nowhere near the top when it comes to healthcare outcomes). The second one is that, by any measure, the UK already has one of the least privatised and marketised healthcare system in the OECD. So the Greens are saying that we should do even more of what we are already doing a lot of (spending), and even less of what we are currently doing very little of (privatising and marketising). One more heave – maybe it has just never really been tried.

The only two vaguely interesting proposals that dissent from current NHS orthodoxy come from the Reform Party: they want a 20% tax relief on private health insurance, and a private healthcare voucher for people who cannot get an NHS appointment within a specified timeframe. This would essentially move us closer to the Australian model, which I have written about before.

I would not do it in the exact way Reform is proposing. The basic idea of a tax rebate system of that kind is that you opt out of some publicly provided services, which saves costs, and you then get a tax rebate broadly equivalent to those cost savings. But if the rebate is 20% for everyone, it bears no relation to people’s actual healthcare costs.

As for the voucher, it would only really be a break from the status quo if it is possible to top up that voucher privately. If the voucher is worth, say, £2,000, can I choose a private provider that charges £2,300, and pay the remaining £300 out of pocket? Or do I need to find a private provider that accepts the nominal value of the voucher, which will presumably be set at the corresponding NHS tariff?

So, in their current form, these proposals are half-baked: Reform clearly have not fully thought this through. Still, at least they indicate a willingness to think beyond the confines of the current system.

Reform are also the only ones who are willing to say that “[t]his is not about funding”, but then, a lot of their proposals are also ultimately about more funding. They want to grow the domestic medical workforce (presumably because of their “net zero migration” pledge, which would seriously undermine the health sector). They want to do this by giving medical staff a three-year tax holiday for the basic rate of income tax, give them a more generous write-off scheme for student fees, and remove the lifetime cap on NHS pensions. Fiscally, these measures are indistinguishable from simply raising NHS pay, so in this respect, Reform are ultimately no different from other parties. They believe that there is “[s]ignificant savings potential” in reviewing Private Finance Initiative contracts, but the whole problem with PFI schemes is that these are long-term contracts, which cannot simply be changed.

All in all, it is safe to say that whoever wins the election, no government will come anywhere close to sorting out the health service.


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).

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