Motion: “This House would privatise the NHS”

On 31 October, the Bath University Debating Society organised a motion entitled ‘This House would privatise the NHS, and replace it with a private insurance-based system’. The IEA’s Dr Kristian Niemietz spoke for the motion; the text below is loosely based on his remarks.


Let me start by making clear what I am not advocating. I am not suggesting that we should emulate the American healthcare system. The US system is a system of private cartels, which has been captured by special interest groups, and which is mainly run for their benefit. That is not the alternative I have in mind. I know that my opponents will pretend that I do. But I don’t.

What I have in mind is something much closer to the type of universal insurance system that you can find in places like Switzerland, Belgium, the Netherlands, Germany and Israel. In these systems, the government has a role to make sure that everybody has health insurance. If you cannot afford the insurance premium, the government will pay it for you – problem solved.

This is how these systems achieve universal coverage; this is how they make sure that everybody has access to healthcare, regardless of their ability to pay. There is no such thing as an ‘uninsured population’ in these places. There are no uninsured people in Switzerland. There are no uninsured people in Germany. And there is no such thing as a ‘medical bankruptcy’.

You could say that these systems combine the most attractive features of a market system with the most attractive features of a public system. On the one hand, you get freedom of choice, consumer sovereignty, competition between providers, plurality on the provider side – features that we would associate with a market. But you also get universality and equity. Access to the good is not determined by individual ability to pay. Rich people don’t automatically get more healthcare, or better healthcare, than poor people. It is, in a sense, the best of both worlds.

That, at least, is the theory. But it seems to be working out rather well for them. The countries which have that type of system have some of the best health outcomes in the world – and I am talking specifically about those outcomes that you can attribute to healthcare, as opposed to lifestyles, cultural or socio-economic factors. Look at international league tables of health outcomes, and you will find that the social insurance systems are almost always at, or close enough to the top. And you will also find the NHS close to the bottom – behind the rest of Western Europe, and normally about on a par with the Czech Republic and Slovenia. That is true pretty much across the board; I am not cherry-picking my indicators here. Pick any indicator you like, and look it up yourself – chances are that you will find the pattern that I’ve just described: Switzerland close to the top. Belgium close to the top. The Netherlands close to the top. Germany close to the top. Israel close to the top. The NHS, light years behind, only just ahead of the more prosperous parts of Eastern Europe. If that.

There is just one exception to this. There is one study – a single one, out of many – that comes to a radically different conclusion. That is the Commonwealth Fund study. The Commonwealth Fund study is the only one of its kind which says that the NHS is the best system in the world. That is, of course, the reason why NHS supporters ignore all the other evidence, and focus exclusively on this one outlier.

So let’s have a look at the Commonwealth Fund study. What is so different about it? The answer is simple. The Commonwealth Fund study does not pay much attention to health outcomes. It is mostly a study of procedures and general system design features. They start with a score card of what they think a good health system should work like, and it just so happens that the NHS comes very close to that template. We can argue about whether that approach is meaningful or not, but I think it’s not what most people have in mind when they say that a country has ‘a good healthcare system’ or ‘a bad healthcare system’.

However, there is one category in the Commonwealth Fund study which is about outcomes, and if you look at that category on its own, you will once again find the familiar pattern: the NHS comes second to last, 10th out of 11. It does not matter for the overall ranking, because the outcomes category has a low weight, but that is the result. If I were on the other side of this debate tonight, I would keep silent about the Commonwealth Fund study, and hope that everyone forgets it. Because this study does not at all contradict, no, it reinforces the point that I’m making, which is that the NHS is an international laggard when it comes to outcomes. Even the Commonwealth Fund study confirms that.

Some of the other categories in the Commonwealth Fund study give NHS-type a head start, by design. For example, there is subcategory where people are asked whether their health insurer has ever declined a payment. Guess which countries come first? The countries which don’t have health insurers, the non-insurance systems: the UK, Sweden and Norway. Where there are no insurers, insurers cannot decline payments. Who knew?

And yet despite this head start, the insurance systems that I am talking about are not doing so badly in the Commonwealth Fund study. In the current edition, the NHS comes out on top. In a previous edition, the Dutch system was ranked as the best, and in another one, the German system was. It’s a draw, then. Even in the one study which is practically designed to make the NHS look good, the NHS cannot consistently beat the social insurance systems.

One final point. It is tempting to claim that any problems which the NHS might have are all just due to underfunding. I don’t want to dismiss that claim: it is true that some of the countries I am talking about spend considerably more on healthcare than the UK. But note that I am deliberately not comparing health systems in terms of generosity, because that would indeed be biased. If the Swiss system, or the German system, are more generous than the NHS, then that is indeed because these countries spend about 11% of GDP on healthcare, while the UK only spends around 9%, so of course the former can afford to be more generous. What I am instead comparing is the bread-and-butter issues: survival rates, mortality rates and avoidable mortality. I am not talking about whether it is easy to get access to physiotherapy, or a stay at a health spa, or whether the doctor has enough time for you. The bread-and-butter issues are the issues that you would always prioritise, regardless of your overall level of funding, just like, well, bread and butter. In these areas, variation in overall spending levels should not be too much of a distorting factor.

So tell me: why do you want to defend a system that consistently fails on the bread-and-butter issues? And in particular, why do you want to defend it when there are demonstrably better alternatives out there, just in front of our doorstep? What’s wrong with looking around, and learning from best practice? We do that in most other areas. Why is it considered beyond the pale to do the same in healthcare?


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).

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