Adam Smith Institute

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Polly insists Tory NHS policy is working and working well

This is not, of course, what Polly Toynbee thinks she is saying yet it is still so. Her claim is that recent Cameron/Conservative policy concerning the National Health Service is working and working well:

After Brexit, David Cameron’s second worst legacy is his assault on the NHS. His explosive 2012 Health and Social Care Act was designed to privatise it into small pieces, while an eight-year funding droughtyields new worst ever figures every month. The wonder is that the service still treats so many so well. The number of GPs fell again last month, while graphs for nurses, emergency doctors, ambulance staff and just about everything show a relentless downward trend. Waiting times for cancer treatments rise, as do delays to treating older people’s hip fractures after falls.

The NHS is now the top cause of public anxiety, according to Ipsos Mori. Is there any good news? There is: the Institute for Fiscal Studies finds a continuing steep rise in NHS productivity, treating ever more people, far outstripping dismal overall UK productivity rates. Hold on to that fact,....

The grand problem with the NHS has always been that productivity. As many, including Polly, have told us it has its own inflation rate. 4% or so in fact. That is, unless the budget increases by that amount each year then there will be insufficient resources. Some of this is Baumol's Cost Disease - productivity is more difficult to increase in services than in manufacturing. But the cure to it, in so far as there is to something structural like that, is more markets, as it is in manufacturing and agriculture. Markets and competition are the causes of productivity increases. As someone as notable as Paul Krugman has pointed out, it's entirely possible that the entirely non-market Soviet economy managed not to increase total factor productivity one whit between 1917 and 1989. 

We are not entirely on board with thinking that recent NHS policy has been perfect, to put it mildly. Yet the general gist, more internal markets, more competition, we approve of. And here we have Polly Toynbee no less telling us that it has been working.

Productivity in the NHS is increasing faster than in any other sector of the economy. No, don't wonder whether that is true, just consider the statement and the source. If it is true, as is stated, then that must, definitively, mean that recent NHS policy has been successful at dealing with the system's most glaring fault, the slower than the rest of the economy productivity growth.

And look at our source - Polly Toynbee. Good news, eh? It would be even better if she realised what is was she was saying....