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- The Observer,
- Sunday April 7 2002
With waiting lists still more than a million and climbing, there is a rising chorus of doubt that the NHS can ever work. Is the free-at-the-point-of-delivery taxpayer-funded state monopoly really the best way to deliver health care?
Before Brown commits more billions of taxpayers' money to the NHS in the Budget on 17 April, he will give his verdict on a report into the future of the funding of the NHS. The report, written by the former boss of NatWest Bank, Derek Wanless, will conclude that none of the health systems based on social insurance or user fees, that provide superior health care in Europe, could provide better health care than the NHS.
This is a quixotic conclusion. All eastern European countries had Soviet-style health systems identical to the NHS, delivering equally second-rate care, until the fall of the Berlin Wall. They then opened their minds, and almost all of them, from Poland to Romania, changed to social insurance.
In the UK, the rebel groundswell is rising on the Left and Right, with Labour-supporting doctors and right-wing lay people forming campaign groups to lobby for alternatives. Think-tanks have set up countless commissions and held endless seminars. The 50-year-long political consensus on the NHS has broken down, with the Tories becoming the first mainstream party to say that Bevan's collectivist creation can no longer work in the consumerist world.
The NHS defenders repeatedly put forward deeply disingenuous arguments of why other systems don't work. They argue that only the NHS can ensure the poor get access to good medical care, ignoring the fact that the sick poor get better treatment in France, Germany and Netherlands than they do in the UK. Those who claim that the practices of socialist France, socialist Germany and socialist Sweden are unacceptably right-wing are revealing their bigotry rather than an insight into health economics.
Other critics claim that the cost of social insurance falls unduly heavily on the low-paid, ignoring that it can be more progressive than the tax system. Even Labour's favourite think tank, the Institute for Public Policy Research, a staunch NHS defender, admits this is simply a bogus argument.
The NHS defenders love to claim that social insurance systems are less efficient and have higher administrative coststhan the NHS, as though the NHS is a model of efficiency. By the Government's own estimates, 20 per cent of NHS money is wasted, and it now has more bureaucrats than beds.The NHS is cheap, not efficient, and social insurance systems have a good track record of ensuring efficient methods of working.
The Government argues that social insurance is a tax on business that destroys jobs, the complaint of business people in France and Germany. But in Britain companies already pay private medical insurance for seven million employees - and that's after they've paid towards the NHS through corporation tax and National Insurance. Or you follow the Swiss route of getting individuals rather than companies to pay.
It is easy to analyse the strengths and weaknesses of the NHS; far more difficult to propose a new system that learns from the failings of others, as the Adam Smith Institute asked me to do in a pamphlet published this week.
I believe the fairest and most efficient way to deliver healthcare is to have competing social insurance schemes, as in the Netherlands, Germany and Switzerland. The schemes should be non-profit and independent of government, run by employer groups, unions, charities or mutual societies. As in Switzerland, it should be compulsory for all citizens to sign up to their choice of scheme, and illegal for any scheme to turn anyone away, so they can't cherry-pick the healthiest customers. The Government would set out the health care that every scheme had to provide; if you were unhappy with the service you were getting you could move to another scheme.
The premiums should increase as a proportion of income, ensuring the affluent paid far more than those on low pay. As recently introduced in France, premiums for the poor should be paid out of general taxation ensuring they get access to the same medical services as the rich.
It would be a one-tier system, unlike the NHS where the middle classes queue-jump by going private. All medical services should be free at the point of use, unless patients choose to pay for services in return for lower premiums. This is in effect similar to the French system where people pay charges to see a doctor, unless they take out a top-up insurance to cover the fees. To protect the seriously ill, there should be a limit, as in Germany, where no one pays over 2 per cent of their annual income on fees.
Central government should not manage the health system as it does now where the Secretary of State is in effect the chief executive of the NHS. The Government should regulate it, setting and upholding standards and ensuring the vulnerable are protected.
Such a system of competing social insurers may come as a shock to the British mindset. NHS defenders will no doubt point out problems. But Germany, the Netherlands and Switzerland have shown they can work fairly, delivering high quality healthcare to rich and poor.
This is not a right-wing plot to boost profits for insurance companies, but a way to make the health service work in the interests of patients rather than against them. Lord Desai, Labour's former health spokesman in the House of Lords, said that this proposed system provides 'a solid alternative that combines the best from many systems.' It is a proposal, which can be discussed, tweaked, or discarded. But for our nation's health, we need the debate.
