Doublethink in the UK is nowhere as present as it is with the NHS. Simultaneously, it is both underfunded, understaffed, and overcrowded, yet is also the pride of Britain and envy of the world. The golden cow that is our health service may be complained about on a daily basis, but seldom are any useful suggestions for reform ever put forward.
This is certainly the case at the moment, as think-tanks the Institute for Fiscal Studies (IFS) and the Health Foundation release a joint report suggesting historically-steep tax increases to fund the crippled system; increases to the tune of £2,000 more per household per year, to be precise.
In general, this should come as no surprise. Calls for additional funding are commonplace, and there naturally comes a point where simply re-allocating parts of the budget ceases to be an option. However, this call for higher taxes raises a huge question: at what point will the NHS finally have enough funding?
The answer? Never.
Money for Nothing
Before I can explain why this is, and to justify my committing of the mortal sin of criticising the NHS, I should explain why the NHS ‘needs’ this extra funding in the first place.
It all boils down to the service’s difficulty of providing adequate healthcare within its current means. In England alone, the NHS faces millions of patients each day, which leads to extensive waiting times, missed targets, and even the inability of doctors to give patients the time they need.
Thus, the logic behind the call for higher taxes is that the money may be used to modernise the NHS and give it the resources it needs to deal with the ever-increasing demand.
Unfortunately, this logic simply won’t hold up in practise. As the NHS receives around 98.8% of its overall funding directly from taxes, the only way the rising costs of healthcare may be met is through constantly increasing the burden on the taxpayer. With an aging population, as well as new and expensive treatments, there will likely never be a point at which the NHS will not require any further funding.
Indeed, back in 2016 the Telegraph aptly described the NHS as a ‘funding black hole.’ Although NHS spending has continued to rise over the past few years, it is simply unable to do so at the same rate as demand, which shows no signs of falling back any time soon.
I would argue that the key issue here is the moral hazard created by the NHS’s funding system. Single-payer healthcare means two things; first, that the entire taxpaying population of the UK is entitled to treatment; second, that they’ve already paid for this treatment, and thus have no incentive not to make use of the services.
Heavy drinkers and smokers, parents who bring their mildly-sick child to A&E, and other such avoidable patients who clog up the system are all able to exploit the NHS because they’ve already paid for it. Thus, complacency, unhealthy activities, or overzealous use of the system are all implicitly encouraged. No amount of tax increases of public spending diversions can eliminate this moral hazard.
This hazard isn’t just limited to the patients, however. The monopoly the state holds on healthcare through the highly-centralised NHS has resulted in an absence of competition in the UK. Individual hospitals seldom seem to use their funds in the most efficient way, as there is no competitor to spur any streamlining or innovation.
While a minority of wealthy patients may be able to opt for the private alternative, most of us are left to deal with an inefficient, cramped NHS hospital. Extra money cannot serve as a substitute for the innovating effects of healthy competition.
The Competitive Compromise
To make one thing clear: when I talk about implementing competition into the NHS, I’m not necessarily talking about privatisation. Rather, the UK has to consider switching from the heavily-outdated single payer system, to the far more efficient European models of state insurance.
Rather than funnelling money directly into hospitals, these systems instead allow patients to choose whichever hospital to go to, which are reimbursed by the state following treatment. Patients retain the freedom of freedom of choice, thus requiring hospitals to compete with one another to receive reimbursement from the state.
This element competition is crucial if we are to ensure a stable model of public healthcare with the patient at the centre. Hospitals must meet their targets and constantly innovate if they are to receive money from the state, unlike the current NHS which consistently fails to do so.
Moreover, it would be possible to tailor state insurances to the individual patient, offering different premiums based on numerous factors. Those who live unhealthy lifestyles (smokers, drinkers, obese people, etc.) may be required to pay higher premiums to counter their increased likelihood of requiring medical attention. This removes the moral hazard currently clogging up the NHS, and may contribute to a far more efficient system.
Thus, the NHS really does not need another £2,000 per year from each household. We can’t solve the NHS’s woes without introducing competition; introducing a Euro-style state insurance system may represent the most logical solution for a modern social healthcare model.
