So why is it that we don't include the effects of the NHS in our inequality calculations?

As we all know we face a veritable plague of inequality at present. The various numbers are up to Victorian levels of top hats consuming everything and the orphan waifs starving in the streets. Except, of course, we have a remarkable absence of both the starving waifs and the plutocrats exploding from the volume of their own consumption. So, there must be something wrong with the manner in which we are measuring that inequality.

One of the things, not the only one but significant, is that we're not measuring the inequality reducing effects of government spending. That all gain access to health care is just fine by us even if we're not greatly enamoured of the details of the current NHS. But everyone having access to health care is quite obviously a reduction in inequality, isn't it? For if we all have equal access then we're all equal, right, in at least this manner? 

But a new paper, via, tells us that there's more to it than this:

Second, there is a mostly negative correlation between patient income and medical spending within all countries, except Japan and Taiwan for the over-65s and Taiwan and the US for the under-25s.

More is spent on the health care of the poor than the rich.

The (mostly) negative correlation between income and medical spending within all countries suggests that medical systems typically act to redistribute resources from the rich to the poor.

No one is really going to argue that the rich shouldn't pay more of the cost of the society than the poor do, even Adam Smith plumped for more than in proportion. But if the consumption of the state supplied goods is also pro-poor then we're again less unequal than the normal numbers suggest.

Or as we've been saying for some time now, inequality just isn't as high as the usual numbers suggest. For none of them ever do include the effects of a major thing we do to reduce inequality, the welfare state.