How much would the NHS cost to use if it was a private, commercial service?

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21 November
18:00
16 July
20:02

It is simply madness even to consider privatising NHS. NHS and social care are two of our best assets. Health is the wealth of nation. For people to produce wealth they must be healthy and hence it is important to have excellent healthcare which is free at the point of delivery. 

In our NHS each year approximately 360 million patients are seen by 1.3 Million staff! Most patients get the safe and the best care! However, sadly each year 20,000 patients die and 55000 patients suffer moderate to severe harm due to 'medical errors and vast majority of these errors are preventable by good governance, use of IT and promoting fair and open culture and learning culture.

First of all, we got to understand what do we mean by 'privatisation'? Is it really privatising the healthcare or privatising the running and managing of NHS by private sector? These two have different meaning. If NHS is funded by the public and the management of running of NHS is privatised and tariff is same, I do not see any problem at all provided the governance, safety and quality of care is good and there is control over the cost.

But private sector will not take on sick, ill patients and elderly patients and acutely ill patients. They need excellent care and NHS is very good at looking after these patients.  

I do not think anyone knows how much will be the cost for privatising NHS. If it is completely privatised then cost will go up and many poor, sick and ill patients will suffer and many will die and cost will go up eventually.

In my view, NHS must be publicly funded and there must be transformation of health and social care and there must be digital transformation, cultural transformation, service transformation and governance and accountability transformation. 

Commissioners must use commissioning power to commission for safety, quality, outcome, efficiency and values and for staff and patients feedback. NHS has culture of bullying, harassment, victimisation and there is poor governance and accountability and silos working and poor clinical engagement and if we address all these then I do not see any reason for privatising NHS and we can make it one of the safest and the best and most vibrant health and social care in the world.

Get leadership right and we can transform our NHS and there is no need to privatise it.

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16 July
18:14

The trouble with answering this question using international comparisons is that most people gravitate to using the USA as the comparison. Most ignore the fact that almost every other health system contains a mixture of public and private provision as well as a mix of public and private insurance. Both the NHS (where most secondary care provision is state-run and almost all payment is paid by the state) and the USA are outliers.

Most people are also unaware that the USA actually has higher government spending on healthcare than the UK (though this covers only the poor and the old, not the whole population). 

Most people know that the USA spends a large and increasing amount on healthcare as a percent of its GDP and gets pretty poor outcomes. But it is simplistic to assume that most of this problems is a result of private or for-profit ownership of both the insurance firms and the providers of health care. Many European countries, for example, have mixes of private insurance and provision and get good outcomes without the same spend as the USA.

The USA is expensive and gets poor outcomes for a variety of reasons that go beyond the fact that much insurance and provision is for profit and privately owned. Markets for healthcare are not the core problem there: rigged markets are. 

Insurers don't have to cover people and (at least before Obamacare and possible after depending on what Trumpcare turns out like) can refuse coverage for people with pre-existing conditions. Compulsory insurance schemes as implemented in many other advanced economies) spread the risk to the insurer and keep rates lower for those with the most need. In the USA insurers also suffer from state-level fragmentation. The rules are not national, pushing up costs for all through fragmentation, administrative complexity and lack of local competition. 

But far more importantly than that the market for care is rigged in favour of the providers and not the consumers of care. Hospitals don't typically have to declare their prices, removing one of the few useful facts that consumers might use to exercise choice and use market forces to drive down costs. And prices vary a lot from hospital to hospital in ways that look entirely unreasonable. Government has acquiesced in this and has not sought to protect consumers from the power of big providers. Insurers should be able to comparison shop but don't (and government has not exactly encouraged them to do so).

Perhaps even worse is the government attitude to the drug industry. Policy seems to favour doing whatever is necessary to protect industry profits regardless of the effect on the people who need medication. Government is not allowed to use its market power (via Medicare or Medicaid) to push down prices. Worse, even Obamacare couldn't force government to research and publish information on the cost-effectiveness of drugs; this is actually prohibited by legislation. 

In short, the USA has a whole variety of rules that work against the sick and protect the overpriced providers and insurers of care. That the main reason why it is so much more expensive than most comparable countries. 

To get back to the question of whether private healthcare would be more expensive than public healthcare we have to discount those exceptional factors from the USA. 

Private insurance is more expensive than paying for healthcare via tax. But not that much  more expensive as other European countries who get the rules right show. But the NHS would clearly be worse off if it relied on private insurance (but the right comparisons suggest that might only be a 5-10% factor not a 100% increase that might be expected by comparison with the USA).

What about public versus private ownership of provision? Whether private ownership would be more expensive is less clear. Many perfectly adequate health systems have a mix of public and private provision without entailing excessive costs. Even the NHS has always used private contractors for significant amounts of provision. GPs are mostly private contractors to the NHS and the population loves them so much it usually forgets that in debate. An obvious question is, if the NHS can use private contractors cost effectively for primary care, why could it not use them cost effectively for hospital care? Actually it does and pays them the same as it pays NHS-owned hospitals but the volume is small.

Ownership of provision in a well designed system is not that big a factor in determining how much the system costs. The real drivers of cost are how the overall system is designed. Many countries run systems that are similar to the NHS in outcomes and not too much more expensive. The USA runs a uniquely perversely "designed" system that punished the sick to benefit the providers.

So if we isolate the issue of turning the NHS into a privately run system, I'd guess it might be a little more expensive (primarily because private insurance is more expensive to collect and manage) unless we designed a perverted system like the USA (which nobody sensible wants to do).

The NHS has problems but how it is paid for isn't one of them. And how is delivered isn't much of an issue if we are worried about cost. But changing it would be expensive. So there is little reason to change how it is paid for and no reason to worry about using private providers.

7
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November
2016

In the US, healthcare is essentially an insurance-based, private sector industry. The US spends almost 17% of its GDP on health care. We spend less than half of that, around 7% of the GDP. Under a US-style system I think we’d end up spending at least double the amount we do now. We’d end up spending another £115bn to go to a privatised system.

 But the beauty is, outcomes are still a lot better in our system than in the US. In the Commonwealth Fund healthcare survey for 2013/14 we came out top for efficiency and cost-effective health care. The NHS was named the best.

 So the NHS is a world leader. You are given healthcare according to your need, not according to the size of your pocket, or your colour, gender, sex or race. It’s a unique system as far as I’m concerned, and I’ve travelled extensively, in Asia, in America, across Europe. Being a doctor, you always want to see how those systems work there and I’ve looked at them. I might moan and groan about the NHS, but in my experience, it is still the best system. 

But tragically, it’s being changed to the kind of system they have in the US.

“The Conservatives’ reforms are already leading us down the road to a US-style insurance-based system.”

All of [former health secretary] Andrew Lansley’s reforms, and what Jeremy Hunt is now doing  to healthcare, is leading us down the road where it’s going to become insurance-based like the US.

It will lead us to a two-tier system. We might have some people who can top up or who can give a lot more money for insurance. They might have a better quality service.  But by and large, for the rest of the country healthcare will become more like the kind of service you see in a third world country. We don’t want that. 

I hope the NHS is saveable – I always use Aneurin Bevan’s quote: “The NHS will last as long as there are folk left with faith to fight for it.”

I will qualify that however. Though I am so proud of the NHS, what we have really developed with the NHS, so brilliantly and beautifully, is a National Disease Service. If we want the NHS to be sustainable and healthy, then we have to look into the preventative bit of it, the public health bit of it, the lifestyle side of it. That’s the real elephant in the room. It’s such a shame. As a GP I can safely say that 70-80% of my consultations would disappear if people were able to look after their lifestyle, nutrition and exercise. It’s as simple as that. 

“I am so proud of the NHS but we don’t do enough on preventative healthcare. Really, what we have developed here is a National Disease Service.”

This kind of thing needs to be taught from the nursery, from school. As soon as people have kids, they need to realise how important nutrition, exercise and lifestyle are if they want to really live. People are living longer, but are they really living healthier? That’s the big question. You look at the diabetes and heart disease epidemics we’re getting, it’s alarming. Everybody’s got to contribute, whether it’s local authorities, schools, politicians. We’ve all got to understand this – we’ve got to get this right.

 The money spent on public health measures is only around 2-4%. We have to spend more money to address these things rather than having these structural reforms, or having ideological fights between left and right. Let’s take politics out of it. Let’s make it a real national health service where no political parties own it – we all own it.

 Let’s stick to what it has delivered for us for the last 70 years, and then we won’t have to pay for it at the point of use. The NHS is still one of the best – let’s not kill it.

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