Professor Alain Enthoven is one of the world's leading health policy analysts. In this paper for ASI, he reflects gloomily on the prospects for real improvements in NHS delivery unless there are more radical reforms than the politicians are contemplating.
Britain's tax funded health system is no longer the world's envy, but a quaint oddity. It will remain in financial crisis until we bring far more private spending on healthcare. Health costs cannot be met by taxation alone. The Institute highlights three areas where funding could be changed. The first is competing funds where 'NHS tax' contributions are paid into a number of 'social insurance funds' of their own choice. The second is charges where there should be co-payments for some minor services, as already happens in Europe. The third is cost, taking the responsibility for healthcare funding out of central government and handing it to private or non profit social insurance funds, will increase what we spend on healthcare.
A new ASI report suggests that Britain should follow Sweden, Norway, Holland and Belgium in asking people to pay the first £60 of their annual prescriptions bills. This would bring an extra £2 billion into the NHS, cut the waste of 'free' medicines that are never taken, and would allow patients to weigh up whether expensive new medicines – unavailable on the NHS today – were really worth paying for. Is £60 too much? It's only a sixth of what the poorest families already spend on booze, betting and baccy, says author Ian Senior.
While Labour and Conservative parties talk about the value of parental choice in education, other countries are actively encouraging it. "All state schools could become independant." say's the reports author, former Fabian society research chief Stephen Pollard. Examples are given where the public funding private provision model is successsfully being used. In America the charter schools, which have been set up by local parents recieve tax funding, are non selective and are exempt from much of the regulation on state schools. New Zealand has copied the charter school model replacing the old district bureaucracies with new boards of trustees for each school and abolished zoning. 82% of New Zealanders now claim to be satisfied with their children's education. 97% of low income families are satisfied. Equality and educational standards would both rise if the government stopped running schools and paid others to do it instead.
The latest book in the series from the Adam Smith Institute and MORI looks at the delivery of public services. The findings of the report highlight the differences between the consumer agenda and the producer agenda. The new survey looks at three services: police, schools and local government and the conclusion from all three is that what they deliver is not what the public want. The public want the police to tackle criminal gangs and organized crime, muggings and street crimes, prevent burglary and recover stolen property. A huge majority of people say that teaching the basics - reading, writing & comprehension - should be a top priority. Local government should concentrate on CCTV, keep council estates in good repair and tackle litter, graffiti and dog dirt. The disparity between what is delivered and what is wanted is clear to see.
Public services must be changed, not just funded. This report outlines the new vision for the NHS and state education which would make them more innovative and consumer focussed. The key is to make the public services producers "free–standing, self–owned and independent". They would manage their own budgets and set their own policy and priorities. Parents choosing a school would direct the government funding for their child to the institution they selected. Doctors and patients by choosing a particular hospital for a course of treatment would direct state funds to that institution. State schools, universities and hospitals would be driven by the demands of their customers. The public services would have to improve quality and efficiency.
Neither the NHS nor private health insurance plans run efficiently because neither adequately reflect demand of medical services. In both schemes there is no connection between usage and cost of services to the consumer, creating an over-demand for services. Attempts have been made to curb this problem by private insurers in the use of co-payments or other means of sharing service costs with consumers. This paper contends that independent Medical Savings Accounts, paid into by the employer but under the control of the consumer will sovle this problem by providing resources for care, but creating incentives for patients to use only the services they require.
Around the World in 80 Ideas is just that - 80 policy ideas from many different countries, which have replaced state ownership and control with choice, competition, freedom and innovation. The whole world is represented - from the commercialization of the Coffee Board in Ghana, to the private use of government-owned land in China; from airline deregulation in the United States to private maths education in Japan; from contracting-out the management of government buildings in Britain to economic reforms in Estonia. And these good ideas cover all aspects of government and the economy, from welfare, through utility reform and transport, to economic policy, health and education.
First, there was the agricultural economy. Then capital became the key productive resource. But the driver of wealth-creation today is the talent and brainpower of individuals: we live in a People economy. And since people are both diverse and mobile, governments and social scientists now need to change the very way they think about job-creation, regional policy, taxation, social solidarity, welfare, and much more.
Abolition of all benefit and contribution limits, except those on lump sums would produce a massive simplification of the non state pension sector. With little or no scope for abuse, given the recent erosion of pension tax privileges. But real simplification is possible only within the context of broader reforms of anomalies and complexities in the tax system, in how different pension schemes are treated, and in the relationship between pensions and the structure of social benefits. This report shows how.