Privatisation of the NHS

So there are a couple of internet memes doing the rounds which made my mind up about what topic to blog about next, including this one:

When I saw this meme, I finally clicked as to why so many people are so unwilling to even have a sensible debate about the NHS. They think that privatisation of the NHS means that we will have to pay for healthcare. This is completely untrue. Privatisation means that the government pays private companies to provide certain services, It does not mean that we will move to a private healthcare system where everyone has to either pay for treatment up-front, or pay for health insurance as they do in the US.

So what's the point of privatisation? The best way to explain this is to imagine the government as a "jack of all trades, master of none". Essentially, although the government can do a good job of proving healthcare, education, transport, it is by no means an expert in the provision of any one of those sectors. However, private companies have to be experts in their field to make a profit, and this can lead to massive efficiency savings. 

To illustrate this, and these numbers are completely fictional, imagine the government spends £100bn on healthcare per annum (in fact, the NHS budget for 2013/14 was £95.6bn). Now imagine private companies come along and offer to run these services (to the same standard) for £80bn per annum. The government saves £20bn each year which it can then spend on other services (or more likely, pay off some debt). Brilliant, everyone's happy, or are they?

The criticism of privatisation is that out of the £80bn being paid over to the private companies, those companies are keeping £5bn of that as profit. Many people (usually to the left of the political spectrum) believe that private companies should not be allowed to profit out of providing healthcare, a necessity for people to live happy and healthy lives.  I am not going to argue that people are wrong to hold this belief but I have come up with a hypothetical scenario to enable you to judge whether you are against privatisation in principal. So, would you rather:

1) have a healthcare system which is good but not great (let's say 7/10); or

2) have a healthcare system which is great (let's say 8/10) but a few people make lots and lots of money out of it (note: there is no cost to you; in fact you have access to a slightly better healthcare system.)

I am not trying to tell you which is the right answer here, I just want you to be well informed about the issue.

Personally, I believe that privatisation should occur up to the point that it stops becoming beneficial for the NHS. My answer in the above scenario would therefore be Option 2. However, I do not believe that it should be privatised for the sake of it - there are some services which private companies will not be able to provide more efficiently than the government.

I would also add that people who don't trust the Conservatives with the NHS because they want to completely privatise it should bear the following in mind: it was Labour who first started privatising the NHS and in the grand scheme of things, privatisation had, at most, increased at the same rate under the Coalition as it had under the previous Labour government. For your reference, at present, the NHS is roughly 6% privatised.

Interestingly, Singapore has what is generally considered to be one of the best healthcare systems in the world and definitely the most efficient. Singapore's healthcare system is two-thirds privatised (unfortunately, Singapore's healthcare system is too complicated to discuss now but if people want me to, I will write a blog post about it.) Another strong performer is Valencia's healthcare system, where 20% of services are provided by private companies at absolutely no cost to performance.

I therefore suggest that anyone who is against privatisation, despite never having considered what it actually means, has a good think about what they want from their healthcare system. I, for one, would like a healthcare system that works and that we, as a country, can afford.

Thanks for reading and allowing me to keep you.. In The Loop.

Ed