The NHS needs radical reform

  • The NHS is a monopoly that does not provide comprehensive or high quality healthcare.
  • A social insurance scheme needs to be introduced, funded by employer and employee contributions along with co-payments from patients
  • Hospitals should be removed from government ownership and sold to private groups to create genuine competition and choice for patients

In a report released today, the Adam Smith Institute calls for radical reform of the NHS. The government’s current plans are trying to introduce competition to improve health care quality, but seek to do so only in a limited and overly bureaucratic way.

Instead, our report proposes the gradual selling off of all hospitals to multiple private groups, in order to introduce real competition and drive up standards. The sales receipts from this would be used to establish a health insurance fund.

The fund would be entirely self-financed through employer and employee contributions and co-payments from patients.  With the NHS no longer needing the £105bn in government funding the treasury could afford to cut direct and indirect taxes to offset the additional contributions individuals would make to the health fund scheme.

The report also argues that co-payments are essential for any health care system to be viable in the long term. Without them, costs will keep spiralling upwards uncontrollably. Introducing co-payments would move English health care towards a European-style social insurance system (with proven better performance than the NHS). It is proposed that these co-payments should be set at around 20% of treatment costs, but limited to a maximum of £6000 per patient per year.

To ensure costs are not onerous for patients, private insurers should be encouraged to enter this secondary market on a needs-blind basis. As the maximum insured risk is only £6000, insurance cover should be available for around £250 per annum.

The report’s author, Chris Davies, has experienced over 45 years of NHS care and writes candidly about the many ways the service has failed him. Many of the health conditions he has experienced were caused by incorrect and inadequate past NHS protocols, forcing him to spend large amounts on private healthcare or on going abroad for treatments to fix problems caused by the NHS.

After being failed repeatedly by the NHS, which he sees as a fifties-style nationalized service that does “time wasting and inconvenience on a monumental scale”, he has written ‘Reforming the National Health Service: Reflections on four and a half decades of NHS care’ to argue that the NHS cannot continue failing patients and should be radically reformed.

Tom Clougherty, Executive Director of the Adam Smith Institute, adds:

“Britain’s anachronistic healthcare system is failing its patients and the government’s proposed reforms will do little to change this. The NHS continues to consume a large amount of the government’s budget but does not deliver the quality of service that is to be expected in a wealthy, developed nation.

“As our author points out, we urgently need to reform the NHS and seek out alternatives to a one-size-fits-all nationalised service. Adopting a European-style social insurance model, and transferring England’s hospitals into diverse private ownership, will inject real choice and competition into healthcare provision and give us the patient-centred system we desperately need.

“We must not let nostalgia about the founding of the National Health Service get in the way of the desperately-needed reform of this sector.”

Read the report here.