Will Britain finally ditch the failed NHS model?
National Health Service (NHS) waiting lists hit 7.4 million people in September, with more than 6.1 million patients waiting for their first appointment. The NHS has a constitutional requirement that 92 percent of patients must wait no longer than 18 weeks for treatment after being referred by their GP and even this pathetically low bar has not been reached since November 2015.
Dissatisfaction with the service is at an all-time high, with only one in five people satisfied with how the NHS is run. And this goes for staff as well as patients – doctors trained overseas are leaving in their droves as a further 4,880 left in 2024, a 26% increase on the previous year. As one think tank report put it, the system is in a state of ‘permacrisis’. So, have we finally reached the point where Britain can no longer keep dragging its feet on overhauling its state health system?
The fact is Britain is an outlier for having hung on to its nationalised healthcare system for so long. Across the former British Empire, nearly every country which followed our lead in either continuing to develop a complete, Beveridge inspired NHS-style health service or even a largely state-led healthcare system has reformed it for greater private sector involvement and a more dynamic healthcare market.
After becoming independent from Britain in 1965, Singapore inherited a classic NHS structure. Heavily subsidised government hospitals, the state as the primary provider and payer for healthcare, and universal public access free at the point of use as the central philosophy, all led to ever-increasing healthcare expenditure.
By the late 1970s, Lee Kuan Yew’s government recognised that the model was fiscally unsustainable. They could see that rising costs, a growing and ageing population, and insatiable demand for advanced medical services would put a major strain on future public finances, so they embarked on a complete rethink of healthcare provision and financing.
Singapore transitioned to a healthcare funding model based on individual responsibility, emphasising personal savings and co-payments to control costs and deter overuse. Medisave, a compulsory savings programme where workers put a portion of their wages into a personal fund to pay for medical expenses for themselves or their families, was introduced in 1984. Medishield, launched in 1990 and which later became Medishield Life, brought in a basic, low-cost insurance scheme to cover for large hospital bills that couldn’t be covered by Medisave.
Greater competition was spurred through private sector growth and restructured hospitals. Singapore’s public hospitals became government-owned corporations, not-for-profit institutions accountable to their own Boards of Directors that operate with a significant degree of managerial and operational autonomy. These hospitals compete both against each other and with the private sector, driving up quality, efficiency and innovation.
India, sadly, also followed the UK’s example upon gaining independence in 1947. Their Bhore Committee Report of 1946, effectively adopted an Indian version of our own Beveridge Report of 1942, repeating the many of the same mistakes and setting the country on the path of government dominated health and welfare.
Unsurprisingly, state-run hospitals and clinics with the public sector at the centre and minimal user fees failed to scale effectively and the private sector had to step in to fill the vacuum. Reforms to accelerate this trend in the 1980s and 90s have seen private hospitals across India become dominant, providing a dynamic alternative to public sector provision characterised by poor quality treatment and excessive waiting times.
Similarly, Kenya, Malaysia, and Ghana all suffered their own NHS-inspired beginnings upon gaining independence. With taxpayer-funding, government as central service provider and public hospitals controlling care, all endured chronic underfunding, overburdened public hospitals, and staff shortages endemic in such inefficient systems. In the 80s, 90s, and 2000s respectively, each of them encouraged major private sector expansion, public-private partnerships, the contracting out of services, and private health insurance and employer health schemes.
The experience of Britain’s former Middle East protectorates also show that it doesn’t matter whether a centralised healthcare system is funded through general taxation or oil and gas revenues, the same problems emerge, and the same market-led reforms are required.
The Gulf state of Qatar, granted independence in 1971, put vast swathes of its oil revenues into its health service only to have to make major cuts to the health budget in the mid-1980s when costs outstripped oil returns. When these pressures emerged again in the late 1990s, the Qatari government began a gradual shift to the Swiss model - a universal insurance system of individual and employer-provided health insurance.
Nearby Oman, with full independence from Britain in 1951, set out to create a healthcare system from near-zero after 1970 under Sultan Qaboos. The centrally planned, state-led model, delivered by the Ministry of Health and free at the point of use as a result of oil revenues, quickly became swamped by exploding demand that outpaced public capacity.
From the 1970s to the 2010s, Oman’s population quadrupled at the same time as life expectancy leapt from the mid-40s to 78+. As a result, demand for advanced diagnostics, specialised surgery and long-term care rocketed beyond the public’s sector’s ability to deliver.
To meet the demand, Oman’s government created the conditions for massive expansion of its initially tiny and tightly controlled private healthcare sector. The sector went from an almost negligible role in 1990 to 27 private hospitals in 2019, thousands of private clinics and pharmacies, and 4.3 million private outpatient visits a year. A mandatory health insurance scheme is being rolled out for expatriates and foreign visitors, eventually designed to cover everyone in the country.
So, could Britain see better outcomes for patients if it gets with the programme and follows its former colonies out of its healthcare malaise? The results of the evidence speak for themselves. Singapore has amongst the best healthcare outcomes in the world – life expectancy, infant mortality, and disability-adjusted life years are all stellar. India’s reforms have seen it become one of the top destinations for medical tourism on the planet. In 2019, Qatar was ranked 5th in the world for improvements in health outcomes and medical infrastructure. Oman has cut its waiting times for key diagnostic procedures down from 16 months to less than four weeks.
Unlike our political class, leaders in these countries recognised reality, made market-led reforms, and are reaping the benefits. There’s no reason Britain could not do the same. We just need to swallow our pride and look around the world at what works.
Dr Helen Evans, Health Fellow,
Adam Smith Institute