How the NHS limits access to healthcare
People are apparently concerned that the Prime Minister, Rishi Sunak, might have gone to a private GP. According to a nursing trade union leader, he needs “to come clean as a public servant”. Meanwhile Scotland’s First Minister, Nicola Sturgeon, says she has “never” used private healthcare and “wouldn’t encourage people to go private.”
Of course, parts of the NHS have always been delivered by the private sector, including NHS-branded GP practices and NHS-contracted pharmacies. Nonetheless, in the political sphere there is a view that going to an NHS-branded service (including those provided privately) is “fairer” than paying out of pocket or using health insurance. This, however, is a misnomer on two grounds.
Firstly, a significant group of users of private healthcare are self-employed people doing what might be called working class jobs. Plumbers, builders and white van drivers can’t afford to spend 18 months on an NHS waiting list when they are suffering in pain. While public sector office workers might be able to work from home or take lots of sick leave, if self-employed people stay in bed, they won’t be able to pay bills. The unfairness is surely that the NHS expects them to stumble on in pain, not that they have chosen to take out credit to get treated quickly. No one should feel morally compelled to wait for months for treatment when they have the resources and will to go private.
Secondly, the reason the private sector is able to deliver services quickly is because the incentives are different. NHS GPs, for example, are paid in large part by a lump sum per patient regardless of how many patients they see. Likewise, NHS accident and emergency services get the same amount regardless of the number of patients they see. So the incentives are structured so that providing a faster, more accessible service is actually the road to financial ruin. Even when NHS providers receive payment per treatment, such as for hip replacement surgery, the incentives are then destroyed because NHS commissioners (who control budgets) insist that hospitals who treat too many patients slow down. A huge NHS bureaucracy has now been employed in “referral management”, who slow down and try to reduce the number of patients who are allowed to go for hospital surgery.
In the private sector, where patients are paying out of pocket for the treatment they receive, doctors and healthcare providers are given the incentive to treat patients more quickly, drive efficiency, and offer services at the weekend and in the evenings. Because patients are paying, they can have the treatment, without a third party trying to ration them.
If the purpose of the NHS is to act as a rationing system, then the current set of incentives have a reasonably positive effect, placing some limits on rising costs. If, however, we assume that patients should get the treatment they need promptly, the incentives are seriously flawed.