Why public spending cuts are an historic opportunity for UK healthcare

Not a day goes by now without the UK press having story after story about necessary and impending public spending cuts to solve our problematic national debt. Although there is much speculation about where these cuts will fall, I am sure that in the run up to the election there will be much posturing about the NHS being “safe in our hands” and that “the NHS and its services are beyond monetary considerations.”

However, we are way past being able to carry on in this vein. The dire financial situation that the UK is facing gives the next prime minister an historic opportunity to put right the past sixty plus years of failure of the NHS. He now has the chance to provide the population of the UK with affordable, high quality healthcare.

Politicians can no longer have the luxury of pretending that the NHS can do it all, that healthcare has to be funded and provided by the state. This book, published last year by the IEA, shows that opinion formers are already admitting this privately if not ready to do so publically.

So, what can be done? First, all NHS institutions, i.e. hospitals, clinics, community services etc, have to be removed from the NHS. Whether by management buyouts, sales to for-profit or not-for-profit organisations or by the setting up of charities, the NHS must no longer own them. It must no longer employ the staff or have any influence on the services that they provide.

Second, the NHS must be re-cast as a funder and standard setting body. It can negotiate contracts with either these former NHS institutions or with providers from the existing independent healthcare sector.

This must be real privatisation of provision - not a half-hearted attempt as we have seen with private finance initiatives or the mere contracting out of services such as the railways, but a real, honest and permanent removal of all of the NHS estate, services and employees from the public sector.

This, and only this, will ensure that the UK starts to gain a real and deserved reputation of having health care provision that is the envy of the world.

Dr Helen Evans is the Director of Nurses for Reform and Healthcare Fellow at the Adam Smith Institute. She is the author of Sixty Years On – Who Cares for the NHS?

It has been said: ‘It’s a pity to waste a good crisis’; and I suppose we should be grateful to our politicians and regulators for engineering such a splendid one.The government has been, and plans to continue, overspending on such a grotesque scale that part of the ’solution’ must be for it to STOP DOING some of the things it has become accustomed to doing.Government interference makes thing worse in so many ways that simply not interfering will, by itself, allow things to get better. My only ‘rule’ by way of guidance would be: ‘No sacred cows’. That means: ‘No ring fencing.’ EVERYTHING the government does should be open to question. Certainly including provision of health services.

Excellent. That’s what most European countries do and it works fine.Let’s fix the ‘provision’ side first as you suggest, and leave the ‘funding side’ as a separate issue. Taxpayer funded basic level plus private top-ups or private insurance seems to be the way forward. Sure, the pressure for more spending (from patients or from ‘the industry’) tends to outweigh the pressure from the taxpayer, but as long as it’s clear what % of your income tax is spent on it, people will have to make up their own minds.

Attention also needs to be given to ’supply-side’ reforms to facilitate competition and keep costs under control. In particular, the General Medical Council should be stripped of its statutory role and patients should be free to choose between registered and unregistered practitioners. In many instances treatment does not require the services of a highly trained and expensive GMC-approved doctor.

PS. D R Myddleton had a fine reader’s letter in today’s FT.http://www.ft.com/cms/s/0/bebc6290-7b0e-11de-8c34-00144feabdc0.html?nclick_check=1

I agree with Richard – one side effect of the “free at the point of use” illusion, coupled with regulation, is that the healthcare sector has never really developed a low-cost “routine segment”.
If the rearlight of a bicycle breaks off, we wouldn’t go to a specialised bike repair shop either. We would get a new one at a department store. If the gearshift breaks down, that would be the right moment to go to a bike shop.
Along the same lines, many routine cases could be seen by nurses, if regulation did not impede it and if it paid off for the individual to use expensive services cautiously. Swiss and Dutch health insurers already give rebates to clients who consult a subsidiary level first.

Thank you Mark! The FT telephoned beforehand to change a word: they didn’t like my saying that Sam Brittan had ’sneered at’ Victorians — so we agreed to change it to ‘criticised’. But what a nerve to complain about the level of the National Debt under the Victorians!

I always thought we should have a National Healthcare System, not the NHS.Base this on vouchers to buy health insurance at £1,000pa per person and that costs £60 billion. Retain £25 billion to run ambulance and A&E centres across the country, £10bn to provide free care for the terminally ill and those at the extreme end of their lives and then put £5bn a year in to research.As Helen suggests, all provision is then “private”, ie non-state, except for emergencies and end of life care.

It has been said: ‘It’s a pity to waste a good crisis’; and I suppose we should be grateful to our politicians and regulators for engineering such a splendid one.The government has been, and plans to continue, overspending on such a grotesque scale that part of the ’solution’ must be for it to STOP DOING some of the things it has become accustomed to doing.Government interference makes thing worse in so many ways that simply not interfering will, by itself, allow things to get better. My only ‘rule’ by way of guidance would be: ‘No sacred cows’. That means: ‘No ring fencing.’ EVERYTHING the government does should be open to question. Certainly including provision of health services.

Excellent. That’s what most European countries do and it works fine.Let’s fix the ‘provision’ side first as you suggest, and leave the ‘funding side’ as a separate issue. Taxpayer funded basic level plus private top-ups or private insurance seems to be the way forward. Sure, the pressure for more spending (from patients or from ‘the industry’) tends to outweigh the pressure from the taxpayer, but as long as it’s clear what % of your income tax is spent on it, people will have to make up their own minds.

Attention also needs to be given to ’supply-side’ reforms to facilitate competition and keep costs under control. In particular, the General Medical Council should be stripped of its statutory role and patients should be free to choose between registered and unregistered practitioners. In many instances treatment does not require the services of a highly trained and expensive GMC-approved doctor.

PS. D R Myddleton had a fine reader’s letter in today’s FT.http://www.ft.com/cms/s/0/bebc6290-7b0e-11de-8c34-00144feabdc0.html?nclick_check=1

I agree with Richard – one side effect of the “free at the point of use” illusion, coupled with regulation, is that the healthcare sector has never really developed a low-cost “routine segment”.
If the rearlight of a bicycle breaks off, we wouldn’t go to a specialised bike repair shop either. We would get a new one at a department store. If the gearshift breaks down, that would be the right moment to go to a bike shop.
Along the same lines, many routine cases could be seen by nurses, if regulation did not impede it and if it paid off for the individual to use expensive services cautiously. Swiss and Dutch health insurers already give rebates to clients who consult a subsidiary level first.

Thank you Mark! The FT telephoned beforehand to change a word: they didn’t like my saying that Sam Brittan had ’sneered at’ Victorians — so we agreed to change it to ‘criticised’. But what a nerve to complain about the level of the National Debt under the Victorians!

I always thought we should have a National Healthcare System, not the NHS.Base this on vouchers to buy health insurance at £1,000pa per person and that costs £60 billion. Retain £25 billion to run ambulance and A&E centres across the country, £10bn to provide free care for the terminally ill and those at the extreme end of their lives and then put £5bn a year in to research.As Helen suggests, all provision is then “private”, ie non-state, except for emergencies and end of life care.

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