What the NHS can learn from a former British colony

Any economist will tell you that monopolies are bad, for both the consumer and for the industry. Non-competition reduces the motivation for efficiency and innovation. And because it represents a single point of weakness, it exacerbates systematic failings, and even facilitates abuse of the market/industry.

The NHS is the UK’s largest employer. It represents a monopoly of the UK health industry. Even if you wish to consult a private specialist, you need to be referred via your registered GP. You cannot simply choose to see a GP you’re not registered with. It represents a single point of weakness, a failing which can be hugely costly and damaging, due to the scale. And because it is closely tied to politics, it becomes a massive political football for tribal politics, the cost of which is borne by those who need the health service the most. Some examples: when Jeremy Hunt decides to make a pay cut for all junior doctors, thousands of doctors and many more patients are badly affected. The Labour-instigated NHS IT project – the failed system has cost the Treasury billions, and costs will continue to rise as the NHS is contractually bound to the IT providers.

In Malaysia, there is no such monopoly. There is an extensive and well-funded public health system. But unlike the NHS, it is not “free at the point of use”. Patients who require treatment pay a nominal sum of 1 Ringgit for every consultation and treatment, regardless of the nature of the treatment. That is Malaysia’s equivalent of £1 (actual monetary value: 20p). It is far from sufficient to cover the cost of the treatment, but it is a sufficient amount to deter time-wasters, yet priced at a level that even the poorest can afford this treatment.

Alongside this publicly funded provision of health services, there is also the thriving market of private health providers. Because private health providers are operated on a for-profit basis, there is competition in the marketplace to provide the best health service at the most competitive rates to the customer. The costs are correspondingly higher of course, but this at least represents a choice for the patient-consumer. If they wish to skip the queues at a public health centre, and they wish to pay for optional extras, the option is there. And in fact, a great many people do indeed choose to pay for faster and better service.

Because of this, the burden on the public health service is greatly alleviated in terms of operational costs and volume of service. Those who are willing and able to pay for their own treatments can choose to do so. Public funds are directed at those in need of it the most – those who are unable to afford private healthcare. And market rises to meet demand: as the economy improves, and more people are able to pay for their own private healthcare, the health industry improves, and overall national healthcare improves.

As the saying goes, the proof of the pudding is in the eating of it: In Malaysia, waiting times for public GP services are a matter of hours rather than days as we have in the UK. If you decide to pay for a private GP, it’s actually in the order of minutes – waiting over an hour is unheard of. For more serious treatments such as surgical operations or x-rays, the wait time is only a matter of days. In comparison, patients in the UK suffer wait times of many months. There are many things not right in Malaysia and even more things that the populace like to complain about, but the healthcare system is not one of them.

Yet for some reason, “privatisation” is considered a dirty word in UK public conversation. And no wonder, the idea of “privatisation” is perceived as selling off the NHS to a private monopoly. Nobody seems to understand that privatisation does not have to involve selling off the NHS. The public health system (NHS) can remain exactly as it is, but the market can be opened up to allow privately owned health providers to participate. And in a free market, supply rises to meet demand.

The stupid thing is that the so-called right-wing “capitalists” (ie the Conservative party) don’t understand this basic idea of capitalism. Capitalism and the free market is not about turning public monopolies into privately owned monopolies for-profit. I’m not just criticising the Conservative party’s attempts to sell off parts of the NHS either – I am also referring to the former Labour government’s ridiculous Private Finance Initiatives.

Why is it that the richest and most influential politicians in this country haven’t got any grasp of economics? Did they not all study PPE: Politics, Philosophy, and ECONOMICS???

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Author: Hoong-Wai

I'm a sinner. I have an interest in economics, philosophy, politics, science, sociology, technology, theology (in alphabetical order). I care about truth and justice. I can be a contrarian.

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