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Why the NHS will go out with a whimper, not a bang Why the NHS will go out with a whimper, not a bang
(4 months later)
The day after the new NHS "reforms" came into force, last month, I made an appointment for a minor operation. Nothing could have been easier. My GP booked the appointment at an NHS hospital online, while I sat in her office. So is it true that we won't really notice any change? Or is this just a lull before a storm of privatisation is unleashed?The day after the new NHS "reforms" came into force, last month, I made an appointment for a minor operation. Nothing could have been easier. My GP booked the appointment at an NHS hospital online, while I sat in her office. So is it true that we won't really notice any change? Or is this just a lull before a storm of privatisation is unleashed?
In reality neither picture is accurate. There won't be a tsunami of hospital privatisation, because operating a full range of hospital services is unprofitable. To make money out of employing large teams of highly trained staff with sophisticated medical equipment to treat high-risk patients means charging prices far beyond the reach of all but the seriously rich. Throughout Europe, as in the UK, very few private hospitals offer a full range of services. Most have fewer than 100 beds and offer diagnostics and standard low-risk surgery. Even then they don't make large profits.In reality neither picture is accurate. There won't be a tsunami of hospital privatisation, because operating a full range of hospital services is unprofitable. To make money out of employing large teams of highly trained staff with sophisticated medical equipment to treat high-risk patients means charging prices far beyond the reach of all but the seriously rich. Throughout Europe, as in the UK, very few private hospitals offer a full range of services. Most have fewer than 100 beds and offer diagnostics and standard low-risk surgery. Even then they don't make large profits.
On the other hand, NHS hospitals are being degraded. This is the meaning of the assertion by Dr Michael Dixon, a spokesman for entrepreneurial or business-oriented GPs, that many NHS hospitals "will have to shrink or shut altogether because half their services should be provided elsewhere". By "elsewhere", Dixon means facilities run by private providers, because there are no plans to create alternative NHS-run facilities.On the other hand, NHS hospitals are being degraded. This is the meaning of the assertion by Dr Michael Dixon, a spokesman for entrepreneurial or business-oriented GPs, that many NHS hospitals "will have to shrink or shut altogether because half their services should be provided elsewhere". By "elsewhere", Dixon means facilities run by private providers, because there are no plans to create alternative NHS-run facilities.
The shrinking and closing of NHS hospitals is being driven by pressure from at least five main sources. One is NHS hospital debt, especially in hospitals with PFI deals that no responsible government should ever have sanctioned. A second is the McKinsey-inspired programme of "efficiency savings" – in reality mainly staff cuts, salary freezes and the rationing of treatments – which are reducing hospitals' capacities and performance. A third is the new regulations, which will force clinical commissioning groups to put various hospital services out to competitive tender. If hospitals lose these services, they will lose income, while being left with the costly services private companies don't see any profit in. A fourth source of pressure is patients' distrust of commercial out-of hours GP services, which is leading to an inexorable rise in demand for A&E services.The shrinking and closing of NHS hospitals is being driven by pressure from at least five main sources. One is NHS hospital debt, especially in hospitals with PFI deals that no responsible government should ever have sanctioned. A second is the McKinsey-inspired programme of "efficiency savings" – in reality mainly staff cuts, salary freezes and the rationing of treatments – which are reducing hospitals' capacities and performance. A third is the new regulations, which will force clinical commissioning groups to put various hospital services out to competitive tender. If hospitals lose these services, they will lose income, while being left with the costly services private companies don't see any profit in. A fourth source of pressure is patients' distrust of commercial out-of hours GP services, which is leading to an inexorable rise in demand for A&E services.
A fifth, potentially far-reaching pressure, is about to come from the government's plan to introduce personal healthcare budgets. Patients with chronic, long-term illnesses (and 15.4 million people in England have at least one such illness) are to be offered an annual cash sum to spend on whatever kind of care, from whatever kind of provider, they like. To the extent that they choose to spend it "elsewhere", NHS services will be impoverished, potentially on a mass scale. (And of course, the "elsewhere" service providers, while using the NHS logo, may not prove to be so good, and may also "disappear without warning if they do not make a profit", as Southern Cross did. But by then the previous NHS services will have disappeared.)A fifth, potentially far-reaching pressure, is about to come from the government's plan to introduce personal healthcare budgets. Patients with chronic, long-term illnesses (and 15.4 million people in England have at least one such illness) are to be offered an annual cash sum to spend on whatever kind of care, from whatever kind of provider, they like. To the extent that they choose to spend it "elsewhere", NHS services will be impoverished, potentially on a mass scale. (And of course, the "elsewhere" service providers, while using the NHS logo, may not prove to be so good, and may also "disappear without warning if they do not make a profit", as Southern Cross did. But by then the previous NHS services will have disappeared.)
So NHS waiting times are rising again, services are shrinking and staff tempers are fraying. As all this comes into focus, the only thing stopping many middle-class people from "going private" will be the cost. But – and here is the irony – so long as everyone has the right to free NHS care, the cost of taking out private medical insurance can be comparatively modest. Last week, I asked some friends with a young family to get a quotation. The most comprehensive package they were offered cost just £2,280 a year, while the average cost of health insurance for a family in the US is £10,000 a year.So NHS waiting times are rising again, services are shrinking and staff tempers are fraying. As all this comes into focus, the only thing stopping many middle-class people from "going private" will be the cost. But – and here is the irony – so long as everyone has the right to free NHS care, the cost of taking out private medical insurance can be comparatively modest. Last week, I asked some friends with a young family to get a quotation. The most comprehensive package they were offered cost just £2,280 a year, while the average cost of health insurance for a family in the US is £10,000 a year.
One reason for the difference is the exorbitant cost of health services in the US, boosted at every stage by profits, monopolies, high transaction costs and incentives to over-treat. The full impact of such market-driven costs has still to be felt here. But another major reason is that when your insurance cover runs out in the US, that's it; whereas in the UK you can switch to NHS care. In the UK, insurance packages even offer financial incentives to switch sooner rather than later. This is a major factor keeping premiums relatively low. While that lasts, private medical insurance will look more and more attractive to the better-off.One reason for the difference is the exorbitant cost of health services in the US, boosted at every stage by profits, monopolies, high transaction costs and incentives to over-treat. The full impact of such market-driven costs has still to be felt here. But another major reason is that when your insurance cover runs out in the US, that's it; whereas in the UK you can switch to NHS care. In the UK, insurance packages even offer financial incentives to switch sooner rather than later. This is a major factor keeping premiums relatively low. While that lasts, private medical insurance will look more and more attractive to the better-off.
So a first-class national health service is more likely to end with a whimper than a bang. Free provision will be gradually reduced to a level that the middle class see as good enough for the poor, while still serving as an ultimate safety net for themselves. The question is whether our self-respect will allow us to meekly accept this return to Victorian values.So a first-class national health service is more likely to end with a whimper than a bang. Free provision will be gradually reduced to a level that the middle class see as good enough for the poor, while still serving as an ultimate safety net for themselves. The question is whether our self-respect will allow us to meekly accept this return to Victorian values.
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