EKIP– Expert Club for Economics and Politics A Different Opinion
Author: Nikolay Filibev
The UK's National Health Service (NHS) was created after the end of World War II and is the crown jewel of the Labour Party (the largest left-wing party in the UK). Although it is among the most developed countries, the UK has its own health problems. They are much deeper than politicians are willing to debate or take action on. Their actions have recently made the system worse, and proposals to remove the salary cap would only widen the abyss that is the funding of the NHS. The system suffers from chronic problems that are typical of a centralised and inefficient system.
So free, so golden
Although it appears to be almost free, with the exception of NHS Scotland, where even prescription drugs are covered, the real figures show that the health system is costing the consumer quite a bit. The budget for the entire system in 2016/17 was £122.6 billion, and while this is a large sum, it is woefully inadequate in its current form. According to the Office for Budget Responsibility, the NHS budget needs to increase by 4% above inflation each year to keep up with population growth and the growing demand for healthcare services. This will inevitably be met by higher premiums, which currently account for around 8% of the UK’s average gross income.
Social Scotland touches Labour's dream
The Scottish branch of the NHS covers all costs for the user. Due to the way funding is structured in the UK, Scotland receives £1,200 per capita above the UK average. And yet this system does not function like some utopian dream at all. At the GP level, the service is of poor quality, even compared to Bulgaria. To book an appointment you have to wait between 1 and 2 weeks. The alternative is to call early in the morning on the day of the emergency examination, which, however, is often fruitless. Also, patients are often limited by doctors to talk about only 1-2 problems, and for the rest to schedule another visit.
The failed digital reform
The attempt to introduce a digital database ended in a huge failure 4 years ago. Exceeding expectations several times, the final cost of this digital reform amounted to almost £10 billion. This is one of the biggest and most expensive failures in the history of public procurement. The mistake of the rulers is that 1) they tried to create a single centralized system and 2) they greatly underestimated the costs that the construction of such a system requires. The digitization of the health system would be several times easier and cheaper if companies were allowed to create their own decentralized systems that would work more efficiently.
Price negligence
One of the main reasons why the final bill for the taxpayer is so high is price negligence, or in other words, the consumer's indifference to the final price of the product. An example of this is how the NHS costs around 20 times more than the market price to procure a box of ibuprofen. The system sets aside £3.83 for each box of ibuprofen prescribed. By comparison, in most shops a box of ibuprofen can be found for between 20 and 30 pence. In 2016, 22,900,000 prescriptions for paracetamol were written in England, costing the taxpayer £87,600,000. This is just one example, but it is completely applicable to everything in healthcare and supports the argument for decentralisation.
The centralized health system costs the end user more than the private one mainly because someone else pays directly (government, health insurance, etc.) and the user can hardly estimate how much it costs him, and often does not have the incentive to do so. When the user is faced with the final price, he has an interest in looking for other alternatives (clinics, hospitals) to find the best quality/price ratio. This in itself will force private companies to reorient their business model to appeal to customers or risk losing money. The customer has the most power in a fully market system.
It seems that the prevailing view in Britain is that their health insurance system has the status of a religion. Religion in a bad sense, because they cannot or will not see the problems that stand in the way of effective healthcare and reducing preventable deaths. Ultimately, it is about human lives and statism and bureaucratic negligence that stand in the way of effective healthcare.
Image source: Digileaders.com
