Universal Healthcare Without the Nhs

Towards a Patient-Centred Health System

Kristian Niemietz

• Publisher: London Publishing Partnership
• Year: 2016
• Print ISBN: 9780255367370
• eBook ISBN: 9780255367394
• Edition: 1

The National Health Service remains the sacred cow of British politics – any criticism is considered beyond the pale, guaranteed to trigger angry responses and accusations of bad faith. This book argues that the NHS should not be insulated from reasoned debate. In terms of health outcomes, it is one of the worst systems in the developed world, well behind those of other high-income countries. The NHS does achieve universal access to healthcare, but so do the health systems in every other developed country (with the exception of the US). Britain is far from being the only country where access to healthcare does not depend on an individual's ability to pay. Author Kristian Niemietz draws on a wealth of international evidence to develop a vision for a universal healthcare system based on consumer sovereignty, freedom of choice, competition and pluralism. His roadmap for reform charts a path from the status quo to a more desirable and effective alternative.

1. An alternative history: what Britain would have been like without the NHS
   In a universe not far from our own
   The announcement by the ‘Big Eight’, the UK’s major health insurance groups, to raise premiums faster than the rate of inflation for the sixth year in succession has sparked angry responses from across the political spectrum. The Secretary of State for Health called the decision a ‘disgrace’ and an ‘affront to hard-working families up and down the country’. The prime minister concurred, and renewed her pledge to tackle the issue of rising healthcare costs during this parliament.
   Several measures are already in preparation. They include a ‘naming-and-shaming list’, in which health insurers and healthcare providers have to disclose all bonus payments exceeding a certain threshold. The Department of Health is also reviewing plans to give the healthcare regulator, OfHealth, greater powers to shape the tariff structure and pricing policy of healthcare companies. Since the beginning of this year, health insurers are already obliged to inform consumers regularly about the existence of cheaper tariffs, and about how much money they could save by changing health plans. The government has also launched a public awareness campaign, SwitchHealth, to encourage price comparisons between insurers and increase switching rates. In addition, the prime minister has recently announced her intention to reform the corporate governance of the health sector. Patients are to be represented on the company boards of insurers and healthcare groups, and all foreign takeovers of companies above a certain size are going to be subject to a ‘public interest test’. The Chancellor, meanwhile, has hinted at the possibility of making the tax advantages enjoyed by the health industry conditional on stable or falling premiums.
   Industry representatives have dismissed public anger over industry profits as ‘obsessive’ and ‘misguided’. They claim that neither their profit rates nor their levels of executive remuneration are any higher than in comparable industries, and that both had been flatlining for a long time anyway. They also claim that prices in the non-profit sector are, on average, the same as in the for-profit sector. They cite increased costs, especially the new obligation to include the newest generation of cancer drugs in the standard health benefits package, as the reason for the increase in premiums.
   But then, they would say that. Their objections are unlikely to go down well with the British public, who take an increasingly critical view of the healthcare industry. According to the latest British Social Attitudes survey, more than four out of five people support a government-mandated five-year premium freeze, and about three in four support a permanent absolute cap, under which premiums can only be raised in line with inflation. About as many support banning bonus payments altogether, and almost as many support a statutory maximum wage for health industry executives. Price controls for pharmaceuticals and medical equipment also enjoy high levels of popular support.
   Perhaps strangely, then, the opposition leader’s plans to nationalise most of the health insurance industry, together with the large hospital and managed care groups, do not find much resonance with the public. According to the latest IpsosMORI poll, fewer than one in four people support this option. Qualitative research by the Institute for Social and Economic Research (ISER) echoes those findings. As one participant in their focus group interviews put it:
   Of course there are problems with the current system, and it needs reform. We all know that. But do we seriously want politicians and bureaucrats to be in charge of our health? That’s just absurd. What’s next, state-run breweries and bakeries? No, we need to quit this habit of shouting ‘nationalise it’ whenever something doesn’t quite work the way we want it too.
   Healthcare is an outlier in this respect. In other sectors, calls for industry nationalisations are usually popular. Whether it is energy companies, railways, banks, postal services – one can pick almost any industry at random and safely bet that at least two out of three people will want to see it nationalised.1 As journalist Ian Dunt puts it: ‘the public hardly believe in the private running of anything’.2 But they do not seem to trust politicians with their health. In the UK, the idea of state-run healthcare is politically beyond the pale. Even Tony Benn and Michael Foot never called for a wholesale nationalisation of the sector. Why?
   ‘Health systems are characterised by an extremely high degree of status quo bias and inertia’, explains Professor Henry Brubaker of the Institute for Studies. ‘Once you have a health system in place, you are basically stuck with it, whatever that system is. Outside of extreme events, such as wars, revolutions or the collapse of a regime, there are hardly any examples of countries abolishing a health system and replacing it with another.’
   If the UK had, through some historical accident, ended up with state-run healthcare, would that system now be equally immune to fundamental change? It is at least a possibility, and while it is not widely remembered, it is worth pointing out that between 1946 and 1948, there actually was a genuine attempt at a government takeover of the health sector. Under different circumstances, it may well have happened.
   In the immediate aftermath of World War II, there was unanimous agreement that the inherited National Health Insurance (NHI) system was in need of serious reform. But there was also ‘a noticeable absence of consensus over most basic aspects of health-care policy’ (Webster 2002: 3). There were various competing proposals, some of which called for the creation of municipal and/or regional health services, and their most radical variant called for a wholly government-owned and government-run ‘national health service’. This latter idea had been around for a while, but it had never really caught on. Even in the early days of the Attlee government, it did not seem to be going anywhere (ibid.: 17):
   The idea of using the Emergency Hospital Service as a springboard for the nationalization of hospitals had been canvassed during the Second World War […] but this idea had been rejected in all the major planning documents. Although Labour favoured evolution towards a municipal hospital service, its policy statements were careful to avoid offence to the voluntary sector.
   But the new health minister Aneurin Bevan was one of the keenest supporters of the idea, and set it on the policy agenda almost single-handedly (ibid.: 14–15):
   [Bevan] struck out in an entirely fresh direction, which placed the emphasis on the scarcely considered alternative of nationalisation. Perhaps within a couple of weeks of his appointment, he was already considering a scheme for bringing all hospitals under a single public authority controlled by the minister […]
   With the aid of his little group of immediate advisers, within a few weeks Bevan had drawn up a firm plan; with little alteration this was translated into legislation within the space of a year. […]
   Although there had been many press leaks concerning Bevan’s ideas over the previous six months, it was not until this date [21 March 1946, when the National Health Service Bill was published] that his full intentions became evident.
   But once those plans were out in the open, opposition began to form. Parts of the medical profession had been opposed right from the start, but they had little impact: the government dismissed their objections as a selfish defence of their own class interest. On its own, the parliamentary opposition would not have done much to stop the nationalisation plans either. No, what would ultimately stop Bevan’s plans was a rift within the organised labour movement itself. The opposition was led by a coalition of Friendly Societies – the working-class mutual insurance associations which had historically provided health insurance for the vast majority of people on modest incomes – and independent hospitals. They realised that the new system would mean the end of working-class mutualism and self-governance, and they had no inclination to become administrators in a state bureaucracy. They were fiercely proud of their autonomy, and they were determined to keep it. They were soon joined by various trade unions, which were running their own independent health insurance schemes for their members as well. A number of professional associations, which also ran health insurance schemes of their own, followed suit.
   The general public had never been enthusiastic about Bevan’s nationalisation plans anyway. Opinion surveys from the 1930s and 1940s show little enthusiasm for nationalised healthcare (Hayes 2012). Before the autumn of 1946, that reluctance did not translate into active hostility. From then on, however, the anti-­nationalisation coalition began to make an impression on the wider public. MPs were bombarded with letters from constituents who opposed the plans, rallies and town hall meetings were held all over the country, and the media coverage of the Bill turned increasingly negative. Once the organised resistance against the Bill was up and running, the parliamentary opposition jumped on the bandwagon as well, as did detractors within the Parliamentary Labour Party.
   It did not help that Bevan utterly failed to understand his critics’ position, which he dismissed as parochial and petty-minded. Yet the opponents’ case against the Bill was at least as deeply rooted in the labour movement as Bevan’s case. They simply reflected two very different conceptions of ‘collectivism’, between which there had long been a latent conflict, which was now coming to the fore. For one camp, which we might label the ‘grassroots collectivists’ or ‘voluntary collectivists’, collectivism simply meant joining forces with others in similar circumstances, and solving problems together, as a group, rather than individually. They believed that in the funding and commissioning of healthcare, group action was generally superior to individual action. But crucially, their version of collectivism had nothing to do with the state. ‘The collective’ was not the nation as a whole. It was a voluntary, self-organised and self-directed community, usually formed on the basis of shared economic interests and/or a shared social identity.
   For the other camp, which we might label the ‘paternalist collectivists’ or ‘national collectivists’, the collective was indeed the nation as a whole – opt-outs of individuals or groups who did not want to take part were not to be permitted – and collective provision synonymous with state provision. They believed that the important functions of social and economic life should be taken over by the government, delegated to public sector monopolies and funded on a compulsory basis (national insurance or taxation). More simply put, for the former camp, collectivism meant voluntary communities doing things together, whereas for the second camp, it meant delegating things to the state.
   It is difficult to see how a compromise between these two positions could ever have been reached. The two camps simply differed too much in their basic assumptions. To the Bevanites, the ‘autonomy’ argument made no sense. Like democratic socialists today, the Bevanites did not really think of the state as an actor in its own right. They thought of it as a neutral mechanism, which simply bundled the will of the people, and translated it into action. So they did not think of the planned new health service, or indeed of any nationalised industries, as being run by ‘the state’ – they thought of them as being run by the people. The state was merely the tool the people used to run things collectively. In this view of the world, the notion that state action could take autonomy away from people must appear absurd.
   The manifold problems ...

Table of contents

• The author
• Foreword
• Summary
• 1 An alternative history: what Britain would have been like without the NHS
• 2 Who should envy whom? NHS performance from an international perspective
• 3 A quarter century of NHS reforms: what worked, what failed
• 4 Other games in town
• 5 Towards a pluralistic, sustainable healthcare system: a strategy for an orderly transition
• About the IEA