Healthcare

Motion: Should the NHS be privatised?


On 8 February 2022, the King’s College London Conservative Association and the King’s College London Labour Society co-hosted a debate on the motion “Should the NHS be privatised?

The IEA’s Kristian Niemietz spoke for the motion. The article below is a rough transcript of his opening remarks.

 

If we want to get a realistic idea of what a privatised healthcare system would look like in practice, we do not need to look very far. There is a very good example just on the other side of the North Sea, namely, the system of the Netherlands.

In the Netherlands, they have a universal private health insurance system. Everyone who lives in the Netherlands – every citizen, every long-term resident – has private health insurance. The provider side of healthcare – the actual running of hospitals, clinics, surgeries, diagnostic centres etc – is also almost exclusively private.

Now, “private” does not mean “unregulated”, nor does it mean that the state plays no role in that system. It does not mean that the Dutch Health Secretary sits around all day, not knowing what to do with his time.

In some ways, the state plays a very important role in that system. Its main role is to make sure that that system is universally accessible. Private systems are not automatically universal systems – but the point is that you can make them so.

In the Netherlands, they do this in two ways. Firstly, on the demand side, via premium subsidies. If you cannot afford your health insurance premiums, the state will pay them for you. That is how they ensure that there is no such thing as an “uninsured population”.

Secondly, the state also makes sure that health insurers cannot discriminate. They cannot, for example, charge you extra for higher health risks. They cannot turn down an applicant. And they cannot refuse coverage for pre-existing conditions. They have to cover everyone, they have to offer everyone the same conditions, and they have to cover whatever “medical baggage” you bring with you.

This shows that a privatised system can absolutely be a universal system, which offers equitable access to everyone. The Dutch system does this just as well as the NHS.

But in almost every other respect, the Dutch system is a good deal better than the NHS.

Most importantly of all, it produces better healthcare outcomes. I am not talking about population health here, which, I accept, is not just about healthcare, but has a lot to do with lifestyle factors such as diet and exercise, as well as economic, social and environmental factors. I am specifically talking about those outcome measures which do depend on the quality of the healthcare that you receive, namely, survival rates for  common types of cancer, for strokes and heart attacks, for respiratory illnesses, and so on. On those measures, we will almost always find the Netherlands ahead of the UK, and sometimes by a considerable margin.

Even the Commonwealth Fund study, which, of all the international comparisons of healthcare systems, is the one with the strongest pro-NHS bias, does not dispute this. They usually rank the NHS very highly, but this is simply because they pay little attention to outcomes. They have a subcategory which is about outcomes, but that subcategory only accounts for about 20% of the total score. However, in that subcategory, the NHS also comes out as one of the worst performers. So even the Commonwealth Fund study does not contradict what I just said.

The pandemic has been no exception. Again, I accept that the number of Covid deaths is about much more than the healthcare system. It is obviously not the NHS’s fault that the government has messed up its pandemic response. It is not the NHS’s fault that cases spiralled out of control early on. But the number of Covid cases has actually been higher in the Netherlands, relative to population size, which means that their health system came under even greater pressure than the NHS did. Nonetheless, they had fewer excess deaths.

NHS fans sometimes accept that NHS performance is not what it should be. But to extent that they do, they insist that this is solely the result of underfunding. They argue that the NHS is failing because it has been systematically starved of funds. Give it the money it needs, and all will be well.

But the reason why I have singled out the Netherlands is that in their case, healthcare spending is almost identical to the UK level. It is just over 10% of GDP, in both countries. If the NHS is underfunded, so is the Dutch system. That still does not explain the gap in outcomes.

Related to that, NHS fans sometimes claim that poor outcomes are not the fault of the NHS, but of political mismanagement. Don’t blame the NHS – blame the government! If only Jeremy Corbyn had won the election, all would be well.

Let’s accept that argument for a moment.

Even that would not be much of a defence. If a healthcare system is so dependent on the right kind of political leadership and support, then that is itself part of the problem. That is not a robust system. That is an extremely fragile system. If that is your argument, you are essentially saying that your preferred healthcare system can only work properly if your preferred political party, and your preferred political candidate, are in charge. OK, but what do we do when they are not?

One advantage of marketisation is that the marketised sectors of the economy tend to be far less dependent on who exactly is in government. Of course, a bad government makes things worse, that is what makes a bad government bad. But even when we have a bad government, this does not mean that the restaurants get worse, that the pubs get worse, that the breweries get worse, or that the supermarkets get worse. So why does it have to mean that healthcare gets worse? Why can we not have a system which can muddle along regardless, even if the government of the day is a hindrance?

If the NHS were privatised, we could still have universal healthcare. We could still make sure that nobody falls through the cracks. But we would be very likely to get better health outcomes, shorter waiting times, and greater choice, for a comparable cost. And we would get a more robust system, which is far less dependent on the vagaries of Westminster politics. So yes – the NHS should be privatised.

 

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).


4 thoughts on “Motion: Should the NHS be privatised?”

  1. Posted 09/02/2022 at 20:09 | Permalink

    Dear Kristian,
    Thank you for your very considered prose on the privatization of the NHS. I accept that with regard to outcomes we are behind those of the Netherlands. However, what I have a big problem with is that the market is all about profit and dividends for share holders. I find it difficult to reconcile this with a health care system. I think that there historic, endemic problems with the NHS. How is it that doctors can work in both the market system and the social system for beneficial gain. Surely a doctor should committ to one or the other as their ethics are quite different and not particularly complimentary. The NHS should be taken away from the government of the day. The constant meddling is counter productive to sustained progress and development. It should be in receipt of government funds accrued through taxation and National Insurance but otherwise left alone. It is a leviathan and does need to be slimmer and lighter on its feet but it is badly affected by novel innovations like the internal market where highly skilled practitioners spend hours putting together PowerPoints and tenders for work that should be rightfully theirs. It’s a very difficult problem because the Nation is rightly very protective of the NHS so perhaps a middle way would have more traction..

  2. Posted 10/02/2022 at 20:35 | Permalink

    I think the social insurance system is the only way to go, the current system is unsustainable. We now have a stakeholder pension scheme that both employer and employee pay in to. Why not have a similar system for health and social care? Do away with the National Insurance contributions and instead have the employer and employee pay the money into a basic insurance scheme that can be topped up. Moving services to the private sector would also make pensions transparent, that is currently not the case. As long as it’s made clear to the public that the service is still free at the point of need, I don’t think there will be a big problem.
    The big problem will be transferring NHS staff to private companies, and I suspect that’s an issue no government will want to tackle.

  3. Posted 18/02/2022 at 10:15 | Permalink

    With regards to the motion , we have a confusing mix of failed measures for the last Forty years. And end up costing lives or more prolonged pain for the patients and more costs for the NHS in the end.
    I’m over sixty just so cancer should always probably be an option in diagnosis.
    I was diagnosed with myeloma cancer end of July after six GP appointments since Easter, the last one looked at my back and finally sent me for an MRI scan which found the cancer.

    I was diagnosed Stage three ,
    there is no stage four . … It’s terminal.

    Fake internal NHS accounting since the eighties must have led to many deaths as

    diagnosis denied (& OR delayed)
    means patients DIED .

    I might be recovering by now instead of waiting for my SCT. Stem cell transplant next month. Myeloma cancer part two, fingers crossed.

  4. Posted 18/02/2022 at 10:23 | Permalink

    Just replied to you nameless etc re myeloma cancer end of July etc etc etc , I don’t sleep well these days I am in limbo waiting for my Stem Cell transplant next month or two. Had I been diagnosed end of April I would be recovering by now and looking forward to summer.
    I have constant lower legs and feet pain since my six cycles of chemotherapy before Christmas.

    Good to see Mark on GB news earlier
    , please send him my best wishes, missing your entertaining meetings, been a long few years, I was looking after my ex with cancer in 2019 , moving 2020 in virus lockdown etc then all this.

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