Could health care be made fairer by privatising the NHS?
One of the main problems with the NHS is deciding which treatments should be offered, since it doesn’t have unlimited resources the decisions ultimately have to be made. What makes these problems worse is that while NICE can provide guidance it is up to the individual health boards (I think that it the right term) to make these decisions. This is a problem because individuals don’t get to choose what they treatments they would choose to receive and the spending can seem unfair.
So how would privatising help?
By privatising presumably most people would get some form of health insurance (I’ll come onto income inequalities affecting this later) whereby they pay so much a year for insurance and they get treatment if they need it. This is better as it allows individuals more choice, each person can choose which of the different treatments, etc they would rather have and indicate so to the insurance company which will then decide how much to charge.
This works better than the current way the NHS works because it allows each individual to make the decision for themselves, thus increasing “consumer satisfaction”, whereas in order to be “fair” the NHS has to make decisions based upon what it feels the majority wants, which means there is a minority not getting what they want.
How does this work when people are on different incomes
It would be quite simple to make this work for people with different levels of income, in particular people on low levels of income. All the government needs to do is simply take the money spent on the NHS per person and give it back to them. For people on lower levels of income this should be in the form of benefits, which can be spent on purchasing the insurance, and for people on higher levels of income it should be in the form of reduced tax, so they are no longer paying for services that aren’t being provided (I think that this should be a fixed reduction in tax, as could be achieved by raising the threshold for the upper rate of tax say, rather than a reduction in the actual rate of tax as a percentage of income earnt – though this does not form part of my argument in favour of privatising the NHS).
In this way people would be able to buy the same amount of healthcare, in monetary terms, as they do now though the increased competition from a private market should cause the quality of healthcare to improve. It would also allow for people to improve their health care, by spending more than the money they get back from the government, more easily. Though private healthcare exits at the moment people still have to pay taxes which contribute to the NHS so the amount they have to pay for an improvement is much greater than the cost of the improvement itself (as they are required to pay for all the things they already get from the NHS again).
Isn’t it a basic right to healthcare so why should anyone have to pay
Firstly people are already paying through their taxes and the proposed system of giving benefits to people on low incomes will protect their ability to buy healthcare.
Secondly this is in contradiction to the way the majority of our markets work, ie they use a free market. This is true even for other basic rights such as food, if you want food you have to pay for it and if you refuse to you’ll starve to death because it was your own fault (provided their is a sufficient welfare state for those who cannot earnt the required levels of income). If you are willing to pay for food then you should be willing to pay for healthcare. There is no argument that something needs to be provided for people who dont pay because that was their choice and a risk they are willing to take (somewhat similar to the way bankers who make risky decisions should have to face the consequences).
It would help remove negative externalities from activities such as smoking
By making people pay the health costs of activities such as smoking or extreme sports, in the form of higher insurance/medical bills, these negative externalities would be removed thus making these markets more efficient and reducing the need for government taxes on goods such as taxes. If people are willing to pay the costs of extreme sports then anyone else has no right to complain and it is an example of the free market making the decision that would most benefit society. In the case of smoking the taxes could be reduced since some of the externality is accounted for by the market, though some external costs remain such as the effects of passive smoking, reducing the level of government interference in the markets.
What about the care for people with higher costs of treatment through no fault of their own
This is the main problem I can foresee. If someone gets cancer, is physically disabled or has a strong likelihood of having a medical condition in a free market the insurance would be higher through no fault of their own so they would receive a lower quality of treatment than they would from the NHS with the benefits/lower taxes. I can think of two ways around this though neither are ideal.
Firstly the government could provide additional benefits for these people so they could get the required level of care, in order to provide the least possibility for the government to attempt to make the decisions we are trying to avoid from the first paragraph this would have to involve a formula to calculate the additional costs using data from a selection of insurance firms (perhaps finding the average percentage increase in insurance of the top ten most popular firms using a weighting based on their popularity). However this still requires some judgement by the government, and a body set up to do the calculations, on what conditions are a persons own fault and hence whether they should receive treatment (should someone injured in a car accident which was not their own fault get it as they didn’t cause the accident but chose to drive a car knowing the potential risks. If you decide they should then what about someone playing sport or smoking. The questions is what is the level of risk where it becomes your fault you got injured for taking that risk).
The second option is that insurance companies are not allowed to ask for certain information, on genetic disorders for example, and hence cannot raise an individuals insurance costs based on it. However this isn’t a free market as the insurance companies aren’t free to price however they like which is less then optimal.
Further benefits to a private system
In addition to the benefit of individual choice offered by a private system are the usual arguments that there would be improved efficiency and therefore a higher quality of care for everyone. This is also more likely to work in the healthcare industry then other that have been privatised, such as energy and phone lines, because the healthcare isn’t a natural monopoly (there is no reason why two firms can’t be as efficient as one where clearly it is inefficient to have two sets of telephone lines running parallel)
