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Britain’s Health Care Debate Is Broken

Labour treats every reform as a step toward privatization and the Conservatives never push back.

St Thomas Hospital London England
St Thomas’ Hospital in London, England, January 31, 2019 (iStock/Ray Lipscombe)

When it was revealed last week that the British government had not ruled out giving American pharmaceutical companies more generous patent rights under a post-Brexit trade agreement with the United States, the opposition Labour Party was up in arms, accusing the ruling Conservatives of putting the National Health Service (NHS) “up for sale”.

The Conservatives rushed to deny it.

“The NHS is not on the table,” said Health Secretary Matt Hancock. “We are absolutely resolved that there will be no sale of the NHS, no privatization,” said Prime Minister Boris Johnson.

The episode was emblematic of the British health care debate: Labour mischaracterizes any proposed change as a step toward privatization while the Conservatives, rather than make the case for choice and competition, try to convince voters they care about the NHS even more.

Same story

Labour knows health care is one of the few issues on which it is trusted. Under Jeremy Corbyn, the party’s economic and foreign policies have veered so far to the left (to say nothing of Corbyn’s unwillingness to stamp out antisemitism in his party) that many voters in the middle are planning to hold their noses and vote Conservative in the election next week, even if they have little faith in Boris Johnson. So Labour latches onto any suggestion that the Conservatives might tamper with the NHS.

It has accused the Conservatives of secretly wanting to “privatize” the health service for decades, starting when Margaret Thatcher outsourced catering, cleaning and laundry services in a bid to save money for medical care.

But it was a Labour government, led by Tony Blair, that introduced choice and competition into the system by giving patients the right to choose their own hospital and paying hospitals per patient treated, rather than lump sums based on past activity. Leftists, like Corbyn, opposed even those changes, fearing they would lead to richer people getting better care than the poor. That hasn’t happened.

The last major reform the Conservatives undertook was organizational. In 2012, they merged two types of health authorities and put spending power in the hands of local doctors rather than professional managers. As usual, opposition was hyperbolic, with warnings from medical associations that “people will die” and from Labour that — you guessed it — the Tories were embarking on a “privatization” of the NHS.

Through all this, health spending has risen year after year.

And still British health care ranks only sixteenth (PDF) in Europe, between Estonia and Slovakia. All other countries in Northern and Western Europe do better.

Why? Because they don’t treat national health care as sacrosanct and aren’t afraid of a little competition.

More money

France, Germany, the Low Counties and Scandinavia realized decades ago that if the government pays for everything and everyone in health care, it will create a bureaucratic mindset that saps initiative and fails to treat people with “sensitivity, compassion and professionalism.”

That is exactly what has happened in the UK, in the words of the NHS ombudsman.

Britain has the longest waiting times of the countries on the North Sea. Surgeries are regularly postponed. Patients are lined up on trolleys in the absence of hospital beds.

Yet even the Conservatives refuse to challenge the notion that all the NHS needs is more money. In every manifesto, they promise to hire more nurses and open more hospitals.

Most egregiously, in the 2016 EU referendum, Johnson and other Brexiteers argued that the United Kingdom could spend as much as £350 million more on the NHS — per week! — if it left the EU.

This has been debunked. The figure doesn’t count the money Britain gets back from the EU and it implausibly assumes the entire sum would be spent on health care (and not, for example, on compensating farmers for missing out on EU agricultural subsidies). But polls show 42 percent of voters still believe the claim against just 36 percent who know it to be false.

What could the UK do?

Learn from countries that provide better health care. The Netherlands and Switzerland consistently rank first in Europe. Both have mixed systems, with publicly-owned hospitals, private health insurance and subsidies for low incomes.

The Dutch moved away from an NHS-like system in the early 2000s, when they were tired of waiting for months only to receive mediocre care. They didn’t want a big government bureaucracy anymore, but they also didn’t want an American-style system where even middle-income families struggle to pay their medical bills.

So they created a tightly controlled market. Dutch consumers can choose from a variety of private health insurance plans, as long as they get basic coverage. Insurers are not allowed to refuse anyone. The government sets maximum prices for drugs and a maximum yearly copayment, which is equivalent to about three months’ worth of premiums. Premiums pay half the actual cost of insurance. The other half is paid from payroll taxes. Insurers negotiate prices with doctors and hospitals and they can charge extra for care provided outside their network. In most cases, doctors and hospitals will send their bills directly to the insurance company. Patients see little paperwork.

There was resistance when the system changed. Some Dutch people still long for the days when they didn’t have to compare insurance plans and pay €120 out of pocket for it every month. Between 71 and 75 percent of voters believe the government should spend more on health care.

But when they’re asked to evaluate the health care they receive, the Dutch give it an 8 out of 10 on average. 76 percent consider themselves in good health.

The Dutch are not dogmatic about liberalization. When the government abolished price controls in dental care in 2012, hoping it would spur competition, but it led to virtually all dentists raising their prices, the policy was reversed after half a year.

When it comes to health care, such pragmatism is completely foreign to the British.