Why not... privatise the NHS

Nurse and hospital patient

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A look at eye-catching policy ideas that are often talked about but never seem to feature in UK general election campaigns.

The background

The NHS was created by the post-war Labour government in 1948. For the first time, hospitals, doctors, nurses, pharmacists, dentists and opticians were brought together under one organisation to provide services free to the public at the point of delivery.

The central principle - that health services will be available to all and financed entirely from taxation - has been an article of faith in British politics ever since. David Cameron is the latest in a long succession of prime ministers to vow that the NHS is "safe" in his hands and would not be "privatised".

But privatisation is a slippery concept. Some see it in the opening up of NHS services to more private competition. Others argue that the word "privatisation" would only apply if Britain dismantled the NHS altogether and adopted a US-style private health insurance system instead - and that the NHS's status as "sacred cow" is blocking constructive debate about its future.

Thomas Cawston: The case for privatisation

Competition is a "bogey" word in the NHS.

Yet this hostility to competition and private providers is a uniquely British obsession.

Diverse providers of healthcare are common throughout Europe.

Thomas Cawston
  • Thomas Cawston, research director, Reform
  • Masters in South Asian History at the University of Oxford and a BA in History and Politics at the University of Exeter
  • Reform is a non-party public services think tank
  • Corporate backers include outsourcing companies such as Serco, Capita and GE

In Germany for example a third of hospitals are run by charities, a third by for-profit companies and a third by government. Sweden has invited private providers to provide GP clinics and hospital services. By contrast only 3% of the NHS budget is spent by private providers in England.

The reason for competition is that can drive real improvements in care.

To take one current example, patients with chronic back pain in Bedfordshire will soon enjoy a much better service. The local NHS has asked different organisations to suggest the best way to deliver all musculo-skeletal healthcare services for the next five years.

All qualified providers, including NHS hospitals, GP practices and private companies, are invited to submit bids to provide a world class service at the greatest value for money.

The winning bidder will be the one that gets the different parts of the NHS to work together successfully so that patients are treated as quickly as possible. The competition will deliver new thinking and NHS patients will benefit.

Competition also puts patients at the heart of the NHS.

Poll after poll shows patients value their right to choose which hospital to go to and what treatment they receive. Yet without competition patients would have to "like it or lump it" and choice remains the privilege of the rich who can afford to buy their way out of the system.

Opponents of competition argue that it will fragment NHS services.

In fact, those services are already fragmented, which is one cause of the current crisis in A&E admissions.

The Bedfordshire initiative shows that competition can join up NHS services, to the great benefit of patients.

Oliver Huitson: The case against privatisation

It is not clear where the evidence base for competitive, privatised health provision comes from.

This is perhaps why the Conservatives and the private health industry, including the "think tanks" they fund, rely on a handful of soundbites. Respectable economic theory and the evidence from real-life healthcare both disprove their case - competitive markets fit healthcare exceedingly poorly.

Oliver Huitson
  • Oliver Huitson, co-editor of OurNHS website
  • Author of 2012 report, How the BBC betrayed the NHS
  • OurNHS is a three-year project dedicated to "reinstating a genuine National Health Service in England"
  • The site is hosted by openDemocracy
  • It is funded by businessman and philanthropist Henry Tinsley and the Andrew Wainwright Reform Trust

When markets are introduced into healthcare provision, providers chase income, costs soar, health outcomes suffer, fraud increases, and the system of universal care coverage collapses.

The public need only look at what's happening to out-of-hours care already - a stream of scandals, capped by an A&E crisis. Blaming this on NHS "fragmentation" is quite extraordinary. The privatised service, with less qualified staff to cut costs, has seen an increase of 50% in the rate of calls referred to A&E since 2010.

Sweden put "competition at the heart" of their NHS. "Choice" grew in affluent urban areas where privately-owned clinics pushing unnecessary care now abound. Of the 196 new clinics that opened in Sweden, all privately-owned, 195 were in wealthy areas.

The newly privatised Dutch system showed similar problems. The GP organisation tried to address it by asking newly qualified GPs to take positions in rural practices. For this "interference with the market" the national competition regulator fined the GP association 7.7m Euros!

Competition puts revenue, not patients, at the centre of care. It's a legal requirement for firms to maximise shareholder value - not patient wellbeing. This is why the public consistently oppose privatisation; it converts a public health service to a "fantastic business", in Cameron's words.

"Choice" is often a fantasy, as commissioners, patients and charities will soon learn; a warm buzzword used to mask the fact the NHS is being changed to a profit-led market without the public's consent.


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  • rate this

    Comment number 2.

    #1 freejames
    "The worst example of health care - USA, incredibly expensive and less effective, on average, than the UK."

    Not true. Having experienced the UK & US systems, I have found the US medical care to be far, far superior, making the UK look 20 years behind. Problem is, the US system excludes so many people. The answer - privatize the NHS but keep a free safety net for the poor.

  • rate this

    Comment number 145.

    The NHS is an inefficient dinosaur. The 5th largest employer in the world, in a country that has less than a tenth of 1% of the world's population. It is impossible to manage. Creating competition will bring us into line with the best healthcare systems in the world, such as Belgium, Germany and France. It is not sinister, and will deliver better healthcare for the same money.

  • rate this

    Comment number 9.

    "Private companies ONLY exist ... to make profit."

    State entities tend to end up existing for only one thing - the benefit of its its employees, who guard their perks & pensions, while the public is treated like animals at a vet's surgery. Look at the USSR's universal healthcare, & Romanian orphanages - all public sector. The NHS is near collapse & needs reform to save it.

  • rate this

    Comment number 53.

    The sale of all those hospitals, surgeries and care homes will bring in loads of much needed money, it a huge asset to sell off.

  • rate this

    Comment number 198.

    Thomas Cawston of Reform is 100% correct:
    Privatisation, allowing choice, in this most important of services is essential. It is accepted that monopolies drive up prices while delivering poor quality services, this is no different with the forced monopoly in healthcare. The NHS is an insolvent dog.

    Oliver Huitson's opposition amounts to fear-mongering and ignorance. People are entitled to choice!


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