Friday, 12 October 2007

"The madness of feeding this ravenous NHS"

Whilst reading yesterdays Times today (it was sitting around at lunch) I came across an article by Camilla Cavendish arguing that the NHS is "...swallowing more and more resources, at the expense of virtually everything else":

"The NHS is Britain’s last big state monopoly. It is the largest employer in the developed world. Its 1.4 million staff outnumber the private and public healthcare workforce of Germany, a country with 25 per cent more people and better health outcomes.[*]
In the 1990s it was possible to argue that the NHS was starved of cash. But not any more. Britain is now spending at about the European average, but lags behind too many other European countries in terms of results.
That is the real price of having built a bloated State. No one dares speak the truth, because there are so many vested interests to offend. But the writing is on the wall: a tax-funded free healthcare system is looking ever less sustainable. Politicians always fear the “popularity” of our health service. But that popularity will wane if the NHS comes to be seen as the enemy of every other public service."

Take a look at UK health spending compared to the rest of the OECD. Looks to me like we are getting the health outcomes we'd expect for the money we're putting in. Seems like rather than being a problem with tax-funded free healthcare, the problem is with people like Camilla Cavendish who pretend that we spend a disproportionate amount of money on the NHS when we clearly don't, and who pretend that privatising this system, or shifting to an insurance based system will magically decrease the health spend. It seems to me that it is people like her pretending that we are over taxed and downplaying the real costs of healthcare that cause other public services to lose out.

* I doubt this is true, it isn't clear where her figures are from, but given higher German healthcare expenditure, and e.g. figures like "In December 2003, 4.2 million people were employed in the health care sector, constituting 10.7% of the German workforce, according to data from the Federal Statistical Office (Federal Statistical Office 2003a).", I call bullshit.


potentilla said...

The Commonwealth Fund doesn't appaarently support the thesis that Germany is better, although I recall the Economist cautioning that there are some slightly odd measures and weightings if you dig down into the methodology.

Does anyone really think that privatisation would make health cheaper, overall? I think that there's a strong case that it would be much more flexible, and therefore probably better value for money, but cheaper, no.

pj said...

Obviously coming up with a decent metric for healthcare is difficult, I note the Commonwealth Fund uses 'efficiency' as one marker, which, whilst desirable in a health economy, doesn't seem like a good health outcome measure.

I don't know whether people think that privatisation will make it cheaper - but - what point is Cavendish trying to make otherwise?

She talks of the NHS being too large, not delivering on the money, and being unsustainable. What does privatisation have to offer here? It is clear that the NHS delivers just fine for the money, and that we won't save anything moving to a privatised system.

As for 'flexibility' and 'better value for money', I'm afraid I'm far from convinced that there is any evidence for this - the US is one counter example, but also the current private initiatives that Cavendish so likes in the NHS make their money through doing only routine procedures and being paid the single uniform rate (often with a premium) while NHS tertiary centres take up the difficult expensive cases but get paid the same money.

Which isn't to say I think the NHS is perfect. Doctors are a real vested interest that have done far too well, and that the government are too afraid of, while things like co-payment for non-cost effective or experimental treatments need to be revisited.

There does also need to be a move to more flexible provision of traditionally secondary level services in the primary care sector.

But none of these things require privatisation.

potentilla said...

Belatedly - my general interest in the possibilities of privatisation arises from my strong view about the ineffectiveness of planned economies and central forecasting. Human beings just aren't clever enough to be able to forecast anything like accurately, and centrally planned economies have a tendency to crash and burn. On average, over time, a regulated free market (with privately-owned although not necessarily for-profit players) does better at providing the services that are needed.

I don't have a fully worked-out view of how I think health care ought to work, though. (But the existing bits and bobs of privatisation in the UK are fairly irrlevant, since they are just tacked onto the edge of the NHS).

pj said...

Well obviously that's a fairly widespread view - but I think the empirical evidence rather argues against it in the healthcare sector with most health systems, whether state run or social insurance/private provision hybrids giving similar returns on the money, and with the US private system a poorly performing exception.

The problem with healthcare is that everyone needs it, so state intervention is necessary somewhere, whether that be running the health service as in the UK, mandating compulsory insurance as in most of Europe, or providing a safety net as in the US.

potentilla said...

The US is expensive overall, and not comprehensive, which is bad. But AFAIK the "hospital experience" (ie medicine plus all the things surrounding it like cleanliness and waiting times) is fairly consistently good. You can't just write the whole thing off without further consideration, I don't think.

pj said...

I'm not writing it off, there are clearly some very good aspects of the US system, particularly for those hwo can afford it, but overall it is not exactly the best example to be following.