Paying for the NHS

The NHS continues to be a massive fuck-up.

More patients will have to pay 'top-up' fees for private care because of budget cuts in the NHS and long waiting times, a group of doctors say in a report.

Well, let us remind ourselves of what the situation actually is. Yes, operations have been delayed—hospitals have even been fined for working through their waiting lists too swiftly—in order to avoid the budget deficits which would lose Commissar Hewitt her job.

However, let us also remind outselves that funding of the NHS is at about £90 billion this year, up from £37 billion ten years ago. And yet productivity is down; as Wat Tyler points out, we now pay consultants double what we used to and we have seen a 15% drop in productivity.

So when these doctors say that there are budget cuts, this is true in relation to the last year, but it is not true over the last ten years; the budget is actually two and a half times what it was a decade ago.

Doctors for Reform says the idea that health care is free across the UK is now a "political mirage".

It always was: free at the point of use does not mean free.

The group has written to Health Secretary Patricia Hewitt calling for a debate on NHS funding.

A Department of Health spokeswoman said patients had always had the choice of paying for private healthcare.

Yes, this is true. But unlike almost every country in the world, we have discouraged people from taking out health insurance, always assuring the poor bastards that the government-funded NHS would provide for them. Had we said twenty years ago that the NHS might not be free at the point of use (FATPoU) in 30 years' time, we would be in a considerably better position now.

Still, private treatment is becoming more affordable. [Emphasis mine.]

Its report says patients are developing sophisticated approaches to 'topping up' NHS care with private treatments, including in key areas like cancer and heart disease.

It blames patchy provision of NHS services across the UK, long waiting times and varied quality.

The report also pointed to the falling cost of private treatments due to advances in technology and increased competition between firms.

Which brings us neatly onto Dr Rant's plan to save the NHS and, more importantly, Timmy's take on it.

Dr. Rant Saves the NHS

Or at least that's what he wants to do.

I think we need to realise that market mechanisms are anathema to any health service, and increase transaction costs rather than health gain.

Ooops, fallen at the first fence there. Better luck next time, eh?

So, on the one hand, we have incontrovertiable evidence that a state-run NHS has lead to higher costs for lower productivity, "patchy provision", "long waiting times" and "varied quality".

On the other, we have a report by Doctors For Reform that explains that "advances in technology and increased competition between firms"—which are, in fact, exactly the "market mechanisms" that Dr Rant decries—has led to "the falling cost of private treatments".

So, with a state-run NHS we have increasing costs, and then we have, in companies subject to market mechanisms, we have falling costs. And Dr Rant thinks that market mechanisms have failed. Er...

Of course, the NHS isn't merely failing its patients; it's also failing the employees. We have thousands of junior doctors and nurses who cannot find a job—despite the fact that we are, apparently, constantly short-staffed. Many of these workers also cannot really afford to live in the areas where they work. This is what happens, of course, when you have top-down, centrist management of an entity as huge as the NHS.

It's technically known as "a fuck-up".

My dear Dr Rant, the way to save the NHS is to introduce precisely those market forces that you so deplore.

Very long-term readers (are there any left?) might remember that, in late 2005, I put together The DK Party Blogger Cabinet, allocating to the jobs various bloggers whom I respected at the time.

Andrew, of the now-defunt Non-Trivial Solutions, was awarded the Health Portfolio (do read the whole post, as there was an exchange of ideas that I'm not going to post here).

On health, we're going to privatise the NHS, but we're going to do it in such a way that people who have most at stake end up with some ownership. Basically, every NHS trust will be spun off as a Ltd company, with 20% of the shares going to the present employees (to be split according to length of service, I'd imagine...). The other 80% will go to taxpayers living in the local catchment area (to be defined) in proportion to the amount of national insurance they have paid over their working lives.

This will mean that the elderly in particular, end up with a hefty share of the new companies, which they can sell to subsidise their own private healthcare. The idea is that no-one gets too screwed over in the transition, plus it buys up the elderly vote quite nicely. Anyone under retirement age should be able to get health insurance anyway, as we're going to provide a tapered subsidy according to age and means, reducing over time, to 'encourage' the market and keep voters quiet. The new companies will be encouraged to do a certain amount of work pro bono, and the government will pay for all emergency healthcare (A&E, mainly) through general taxation.

We're also going to make unions in healthcare illegal, just for kicks.

My views have developed a little since then, and I think that we should be looking at a multi-payer system, like that of France. In that country's system, the government pays for 70% of medical costs (100% for cancer) and the remaining 30% is paid for by the patient (usually by taking out some kind of insurance).

The important point is that hospitals should be private entities, thus encouraging competition between them. Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest)*. This means that hospitals can also recruit the best staff and pay them accordingly (instead of through a central pay deal).

The two-payer system ensures that neither the government nor the insurance companies have a monopoly on funding, and I would like to see the proportion altered to more like 50:50. On the whole, I would prefer to see the government involved as little as possible; otherwise, the government will try to politicise the health service for short-term electoral gain.

The fact that people have to pay for at least part of their treatment should ensure that they take more responsibility for their own health. If you are overweight, then you pay more. If you smoke (as I do), then you pay more. In other words, the corollary of people paying for at least part of their treatment is a healthier society: people respond to incentives.

Further, I think that the constrainsts of private capital borrowing will see more, smaller, hospitals springing up in response to need (as used to happen), rather than the unwieldy, hard to clean behemoths that we see today.

There you go, Dr Rant; we provide a decent health service (modelled, essentially, on the consistantly best-rated system in the world) using those very market mechanisms that you despise. We can see that it works in France, there is no reason for it not to work here.

UPDATE: there's a very succinct post from Timmy on this topic.

UPDATE 2: some more excellent thoughts, based on following the Swiss system, from Roger Thornhill here.

* UPDATE 3: I suppose that it shouldn't surprise me, but every time I think, "should I embellish that with a caveat" and don't, someone picks it up.

Absolutely essential to this is that all hospitals must provide accurate, publically-available breakdowns of success rates for various operations, etc. that both patients and their GPs can examine (publishing them online would be easiest).

Some newspapers have been known to publish just such information. However, this information was not risk stratified. Thus a surgeon who operates on 80 year old alcholic, diabetic smokers would appaear to be far less competant than one who operates on twenty one year old fitness fanatics. And a hospital that specialised in same would appear to be a bad hospital. This is the sort of thing that will lead to very defensive surgery possibly with surgeons refusing to work on any patients with a grim outlook, for fear of ending up "on gardening leave".

Just to declare an interest, I work for a company that (amongst other things) does statistical analysis of operations across the UK in various specialties. Naturally, I think the publishing of risk stratified, appropriately weighted data sets for every hospital is a fantastic idea ;-). But publishing the raw data (by itself at least) would do more harm than good.

This is one of those times. Having been an avid reader of Private Eye's medical column for years, I was aware of this issue. However, I didn't really think it worth mentioning, mainly because of the reply here: with the kind of computing power that we have and the statistical and engineering capabilities of various companies, producing properly weighted figures should not be a problem. Hence my not mentioning it.