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The NHS is the nationalised hence, publicly funded healthcare system in the United Kingdom. The NHS is largely funded by general taxation (including a proportion from National Insurance payments but the National Insurance is not enough to cover the whole system)[1]. The UK government department responsible for the NHS is the Department of Health, headed by the Secretary of State for Health, who sits in the British Cabinet.
The NHS provides healthcare for residents in the UK with most services free at the point of delivery for the patient though there are charges imposed in response to financial deficits and it seems to be moving towards a privatised sector on particular services e. g. Eye tests, dental care, prescriptions etc. Around ? 98. 6 billion in 2008-9[2] is spent on the NHS.
It is the fourth largest employer in the world, and 70% of the NHS budget is spent on pay, a considerable sum goes to general practitioners, most of who have remained independent contractors and not salaried employees. Yet, many junior doctors and nurses still claim that they are underpaid. The NHS was originally a great system which was implemented after the war and as it was the only health service provider, it benefited from the economies of scale and hence average costs decreased costing the government a lot less money back then than it does today.
However, besides colossal labour costs there are other major problems currently present in the NHS which include Access controls, “Paying twice”, Waiting lists and the 18 week target, shortage of beds, the outbreak of “Superbugs”, computerisation, and Misallocation of resources which caused financial deficits in the past and with further injection of funding the NHS has resulted in a financial surplus at present. Access controls Treatments that are determined by NICE to be cost-ineffective (i. e. drugs that have only minor effect at great cost) are simply not offered by the NHS though may be available privately e. . cancer drugs and the new Alzheimer’s drug which have proven to be effective at the early stages of the diseases were not approved. GP referrals are needed to access specialist care. It has been argued that a nominal charge for an appointment with a GP could be introduced to prevent patients consulting their GP with trivial complaints. However, the danger of that is inequality as the poor people will suffer the most. Deductibles have been proposed particularly for US healthcare. However, charges appear to cause greater disparity between social classes.
Charges for an appointment with the GP have never been introduced to avoid the danger of patients avoiding consultations (for financial reasons) for conditions which might be potentially serious. Instead, the British government seems to favour primary healthcare and there are reforms and enlargement of the primary healthcare at present, i. e. via the development of large medical centres (polyclinics). The problem with this is that it disrupts the hierarchy between GP’s and Consultants, as consultants have historically been seen as more superior within the medical profession.
Access to quality hospital care is also limited under the NHS. The NHS is often characterised by its inadequate equipment and services. The main reason for inferior quality is due to cost control. The NHS finds it difficult to keep up-to-date with medical advancements and most of the new medical technologies are pioneered and employed in the United States. “Paying twice” Taxpayers who choose to pay for private healthcare must nonetheless still contribute to the NHS via taxation, and in effect “pay twice”, although the vast majority of emergency medical treatment is carried out by the NHS.
This is not an effect specific to the NHS, and occurs whenever a choice between a publicly-funded and privately-funded service exists – for instance in private education. Some patients with complex illnesses pay for some medical services privately, while turning to the NHS for the rest of their care. However, in one recent case a cancer patient was told that if she paid privately for a drug that was not covered by the NHS she would have to pay for the rest of her care. [6] NHS officials argue that allowing the practice would give wealthy patients an unfair advantage and undermine the philosophy of the system.
Waiting lists and the 18 week target Rationing is a part of all health care systems because resources are necessarily finite. In purely private systems, health care is rationed via the price mechanism, with those being able to pay for care getting it immediately and those unable waiting indefinitely (until they can afford it, which may be never). In the NHS, which aims to give a broad coverage of care to all without charging, health care is rationed on the grounds of clinical need, meaning that emergency cases get instant access where those with less urgent needs (e. . removal of varicose veins for cosmetic reasons) are given lower priority and so wait longer. Although there are obvious arguments in favour of prioritising by clinical need rather than ability to pay[7], it can mean that waiting lists vary widely between regions hence a post-code lottery which could undermine coverage. Patients waiting can choose to have a procedure done outside their local NHS district in order to be seen more quickly, and if the waiting time is long can often get private treatment at public expense, either in the UK or abroad.
A major programme is underway in the NHS to reduce all wait times to 18 weeks by December 2008[8]. This new target starts at the point the time the patient’s own doctor writes to the hospital specialist and ends when treatment begins. It therefore includes the time to make the first appointment, and the time for all diagnostic tests to be completed, evaluated, and discussed with the patient, which were not in the previous target. It has been widely criticised by doctors because it means diverting resources from more serious conditions to achieve politically-motivated goals[9], and doubts persist over its achievability[10].
Bed Shortages “A report in 2003 by the Intensive Care Society, which represents critical care staff, says hospitals could run into serious problems because of a lack of intensive care beds. The report says a lack of money is to blame and suggests the bed shortage could see lives being put at risk… It says the UK has some of the smallest intensive care units (ICUs) in Europe. It also has very low numbers of critical care beds and spends less on intensive care than many other countries. Just 2. 6% of acute hospital beds in the NHS are in intensive care units. This compares to 4. 1% in Denmark. [11] Outbreak “Superbugs” and dirty hospitals To date, there have been a number of outbreaks of antibiotic-resistant bacteria (e. g. MRSA and Clostridium difficile) in NHS hospitals. [12] This incompetent infection control has led to criticism of standards of hygiene across the NHS. Both C. difficile and MRSA are, however, not exclusive to the NHS, existing in British private hospitals and throughout other western healthcare systems; for instance, cases doubled in the USA’s private healthcare system between 1999 and 2005[13], and the UK’s death rate is half that of the USA’s[14].
The introduction of Private Finance Initiative cleaning contractors into the NHS and the associated “cutting corners on cleaning”[15] have been blamed for the problem, as has increased drug resistance due to inappropriate prescribing of antibiotics and patients failing to complete courses of antibiotics. Computerisation The NHS has been criticised over the implementation of its National Programme for IT which is designed to provide the infrastructure for electronic prescribing, booking appointments and elective surgery, and a national care records service. The programme has run into delays and overspends, with the initial budget of ? . 3 billion over three years officially revised to ? 12. 4bn over 10 years[16] and some sources putting it as high as ? 20bn[17]. Critics including the House of Commons Public Accounts Committee and the National Audit Office claim the project is falling behind schedule[18][19]. In addition, 93% of doctors within the NHS are not confident their patients’ data will be secure[20], some GP practices have begun to advise all their patients to opt-out of the scheme[21], and privacy campaigners have claimed the national care records system breaches patients’ privacy rights[22].
Misallocation of resources Due to misallocation of resources and shortages of funding, some hospitals and trusts were running a financial deficit and getting into debt. [26] In a normal free-market economy, some of these underperforming hospitals would be closed down like when the conservative reformed the system back in 1980’s (creation of NHS Trusts) and competition was introduced via an internal market system. The British government has injected more money into the NHS than ever before but due to inefficiencies, it has on the whole been wasted.
It seems that the UK welfare system is very obsolete and despite having such good intentions, negative effects have arisen. Most of the money was spent on increasing the number of doctors (highly-skilled labour), nurses and most of all administrative and clerical staff (human capital), and increasing salaries of those who were already employed. Consequently, less money was spent on treating patients. Although there is a counter-argument that doctors and nurses are still not paid enough and that increasing salaries would act as an incentive which increases their motivation and thus increases productivity.
The government is currently injecting more money into the NHS but doesn’t know where to allocate funding, thus causing a surplus which has angered most staff. “Doctors’ and nurses’ leaders reacted angrily today as it was confirmed that the NHS under spent by ? 510m” in 2006-07 “compared to a deficit of ? 547m in the previous year, according to figures published by the Department of Health. ” [23] After a detailed description of the major problems in the NHS, I would recommend the following reform proposals which deal directly with the specific problems.
The crucial questions that need to be answered are: Can the current system working? Can all the problems be solved? Is privatisation the cure to NHS’s problems? What would be the effect of privatisation? What type of system would I recommend from researching into other countries’ healthcare systems? New systems are often introduced without informing the public before making such serious decisions which caused uncertainty and dissatisfaction hence I would recommend more transparency to reduce asymmetric information, i. e. y asking for public opinion via a survey and to ask for feedback from medical staff. Access controls ??? How should we change the system? A comparison can be drawn with children receiving state education but also concurrently receiving private tuition. Should that also be banned? Consumers should be allowed have the freedom of choice as part of their consumer sovereignty and should not be restricted as NICE have rejected many drugs available in the free-market. These drugs could make a huge difference to the individuals affected and also to their family members.
Morally, its seems viable to allow people to exercise this option, however the economic motive behind Alan Johnson’s argument could be that if more people decide to go completely private, that would take the strain off the NHS. NICE evaluate the employability of drugs via the matrixes of cost control but as the NHS is actually running at a financial surplus the government should try to employ a more flexible system to allow more accessibility to these useful drugs. “Paying twice” The easiest solution would be to operate solely on one system, either completely on the NHS or completely private so that taxpayers would not have to pay twice.
Although a privatised healthcare system like the United States healthcare system seems to be a sound suggestion as people could choose not to purchase insurance and thus don’t pay at all for healthcare unless they choose to in the form of private insurance or single payment. There is also public insurance available for the elderly (Medicare) and for the younger less privileged people (Medicaid). However, there are many criticisms to privatising healthcare which I will discuss later on in the essay. People who pay taxes have the right to use the NHS, but they choose to opt out of it.
They are obviously in a more privileged position if they will to do so, and it was be unfair to the poor if the rich did not share the financial burden it would cause greater strain for the state. Waiting lists and the 18 week target Unfortunately, the trade-off from a universal healthcare system is that because every resident has the right to us it (and that it’s free at point of delivery) subjects the system to abuse. More people are likely to use it if it’s free even if it is not necessary. Thus to cut the waiting list, we must reduce the demand.
A minimum fee (e. g. ?0-100, a deductible) should be introduced for people who earn above a certain amounts to cease abuse of the system. Critics may argue that the demand for health care is inelastic therefore charging may not reduce waiting lists. Another way to cut the waiting list is to expand services, which means building more operating theatres, post-surgery recovery units and employing more staff to increase productivity. Waiting lists have been reduced since further injection of money from the government.
However, there are other solutions that have been proposed, e. g. sending patients abroad for healthcare. However, in countries like Denmark, the idea of sending patients abroad was ineffective because many preferred to wait locally then to travel. Also, ill patients are usually not in a fit state to travel. People who are heavy smokers or drinkers could be said to have caused their own illness and thus should not be treated on the NHS. The government should start warning people that if you smoke, you are responsible for your own health. This is likely to cause deterrence.
Elective surgeries which are non-emergency i. e. cosmetic surgery should be taken off the NHS. Bed Shortages Due to these bed shortages, there are often high occupancy rates which can cause the spread of infection. There should be more beds because most patients are turned away as beds are scarce and the “28 day re-admission period” has been introduced. There is a danger that people may have serious conditions which are fatal but still turned away because the government is not investing in the appropriate resources. The outbreak of “Superbugs”
There has been a move to fight the “superbugs” in the Hospitals by wearing special anti-germ proof clothing which kills germs when they make contact with the clothing. They have also put up many more soap dispensers in the Hospitals to help fight germs, there is also a campaign to scrub out germs and adverts on the TV stating “lets spread the word not the infection”. My proposal would include ensuring proper hygiene inspections and measures take place in every NHS hospital. Private hospitals should also be subjected to these inspections under regulation of the law as they are providing a service to the public. Computerisation
The Government and NHS national leadership have consistently argued that major capital investment in IT is necessary to transform services. Fragmented information systems, as in the US, prevent health services providing consistent data and can damage patient care where doctors may not have an overview of patients records held by another NHS body. The proposed system is costing too much money and is likely to cause problems. Thus, I would suggest that the government should scrap a centralised computerised system, but they could perhaps computerise records locally as patients are likely to stay in the same region.
However, this suggestion would still cost in terms of admin/clerical labour as you require human capital to enter the data into the system hence the government may want to scrap the whole system all together. Misallocation of resources The system should be de-centralised to reduce labour costs as fewer admin/clerical staff would be employed. The local hospitals would also make it easier for people to travel to and the NHS would not need to subsidise travelling costs. Besides placing a large emphasis on primary healthcare, the government should also invest in preventative medicine.
A healthier population of people would mean that less would need to spent on health care thus costs of healthcare would decrease which could deal with financial deficits. Dangers of preventative medicine would be that increase in life expectancy would continue to rise, producing an aging population. Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives. Smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations, according to doctors, with most saying the health service cannot afford to provide free care to everyone. 1. 7 billion is spent treating diseases caused by smoking, such as lung cancer and emphysema. Fertility treatment and “social” abortions are also on the list of procedures that many doctors say should not be funded by the state. The other side of this argument is whether this is moral? Can we value one person’s life more than another? People who lead unhealthy lives may be due to self-abuse but on the other hand research shows that people from lower socio-economic backgrounds lead less healthy lives due to factors like the lack of education.
The government should increase tax on unhealthy products such as alcohol to change the lifestyle of the nation, in the hope to create a healthier nation. The tax would generate revenue for the government which could be used to support the healthcare system. Dangers of preventative medicine would be that increase in life expectancy would continue to rise, producing an aging population. There are arguments produced that state that healthcare is based on induced demand. i. e. more doctors, more treatment. But do we really need the treatment is another question.
To limit spending on certain conditions, our government should copy the US healthcare system by employing Diagnostic Related Group payments. In the USA, evidence suggested that they would also reduce waiting lists and increase activity levels. However, the downside is that they may cause distortions between different patient groups. Privatised healthcare The National Health Service Act 1946 came into effect on 5 July 1948. Private health care has continued parallel to the NHS, paid for largely by private insurance, but it is used by less than 8% of the population, and generally as a top-up to NHS services.
Recently the private sector has been increasingly used to increase NHS capacity despite a large proportion of the public opposing such involvement according to one survey by the BMA[1]. Dentistry is an example of privatising NHS services. There has been a decreasing availability of NHS dentistry following the new government contract[23] and a trend towards dentists accepting private patients only[24], with 10% of dentists having rejected the contract offered[25].
This has caused problems because many people cannot register with an NHS dentist and thus the very poor people tend to suffer due to lack of coverage. The Benefits of the privatised healthcare is that the NHS would have shorter waiting lists if more people went private. If less people use the NHS it would enable the government to lower taxes and reduce borrowing. It also provides consumers with more choice. Private Sector has profit incentive to cut costs and provide a more efficient service e. g. public bodies may have over staffing because of political fears about job cuts.
It also causes diseconomies of Scale in the NHS. The private sector are not subject to the decisions made by NICE and thus can use drugs which fall short of the cost-benefit analysis criteria. Many believe that private hospitals have better trained doctors (due to higher salaries) and better medical equipment thus increasing the quality of care. The detrimental effects of privatised healthcare is that the private sector is run based on profitability and they may cut costs by reducing quality of service, e. g. employing less cleaners will lead to dirtier hospitals.
It may also increase inequality as poorer people cannot afford it. Health is a merit Good and will be underprovided in a free market system. Conclusion On the whole, the NHS is not as bad as people say it is in comparison with other healthcare systems around the world. There are criticisms about many healthcare systems e. g. USA. Developed countries with very good healthcare systems usually charge higher income tax then Britain, thus limiting the purchasing powers of the consumers. Access controls and the monopolistic NHS pose a threat to consumer sovereignty and also cause market failure.
However, healthcare is a merit good. A merit good is a commodity which is judged that an individual or society should have on the basis of a norm other than respecting consumer preferences. One rationale for this is paternalism, that the government or other donor provides such a good on the basis of “merit,” because it can better provide for individual welfare than allowing consumer sovereignty (Musgrave, 1987). It can be defined as a good which would be under-consumed (and under-produced) in the free market economy.
A merit good creates positive externalities. After analysing the pros and cons of privatised healthcare, it does not seem to be a perfect system either. Perhaps we should adopt an insurance system like some other European countries. However, the most important reforms that the British government should enforce are the ones that deal with the specific problems. To allow better management of individual hospitals and to avoid the problems of post-code lottery perhaps the government should give more power to the local government.