By IEA Editorial Director Kristian Niemietz
According to a recent YouGov poll, about 20% of the public believe that the NHS provides better-quality healthcare than other European health systems, while about 30% believe that other European health systems provide better-quality healthcare than the NHS.
In any other policy area, such polling results would be a complete non-story. The grass often looks greener on the other side, an impression which is sometimes correct, sometimes illusory, and sometimes a bit of both.
But given Britain’s famously cultish devotion to the NHS, this is a sensational result. Just two and a half years ago, about 40% were convinced the NHS outperformed its European peers, and not much more than 10% doubted that. Eight years ago, 44% even said that the NHS delivered the best health outcomes in the world.
We are witnessing a major shift in what is permissible to say in public. Criticism of the NHS, and a curiosity about alternative ways of delivering healthcare, are no longer considered thoughtcrimes. They have become almost socially acceptable.
This did not just happen on its own. Over the past two and a half years or so, I must have read at least a dozen articles in mainstream media outlets which openly criticise the NHS, and ask whether Britain might be better off with an alternative system. (And, no, I’m not counting articles written by myself or my colleagues.)
The alternative system these commentators usually have in mind is the Social Health Insurance (SHI) model. SHI is a system in which the role of the state is not to run healthcare facilities, but to ensure universal and equitable access to them via a regulated health insurance market. Unlike commercial insurers, SHI insurers are not allowed to discriminate on the basis of health status. In addition, SHI systems have a safety net for people who cannot afford their premiums, so that, unlike in the US, nobody goes uninsured.
Interestingly, even critics accept that SHI systems have major advantages. Their argument is not that SHI systems are terrible. Their argument is that it is simply too late for Britain to introduce such a system now. We are too far gone. We are stuck with the system we have.
But are we really?
In my new IEA Discussion Paper The Denationalisation of Healthcare, I look at the experience of countries that have previously replaced NHS-type systems with an SHI model. This is not unprecedented: it has been successfully done before. The Czech Republic and Slovakia did precisely that in the 1990s and early 2000s, gradually moving away from the nationalised health system they had inherited from the old Czechoslovak Socialist Republic (CSSR). They created a national health insurance fund, which, initially, covered the entire population. They then gave people freedom of choice: they could stay with the state insurer if they wanted to, but they could also opt out, and switch to a different one. Meanwhile, some healthcare facilities were privatised outright, while others were devolved to the local level.
The former German Democratic Republic went through a more rapid and more radical version of the same process in the early 1990s, as part of the Reunification process. They set up local health insurance organisations, which, initially, covered people on the basis of residence. They then gave people the freedom to choose their own health insurer, and they combined this with a large-scale privatisation programme of healthcare providers. Before the end of the decade, eastern Germany had established a competitive healthcare market.
In the 2000s, the Netherlands also went from a notionally private, but de facto NHS-like system to a competitive and pluralistic one.
On the basis of that experience, I then sketch out a possible road map for a similar NHS-to-SHI transition in Britain. It is not as radical as it may sound. The NHS already has internal commissioning organisations, which fulfil a role similar to that of health insurers in SHI systems. Why not convert those commissioning units, openly and explicitly, into health insurance companies, and then give people free choice?
NHS trusts have already been given greater autonomy than they used to have historically. Why not go all the way, and convert them into free-standing, independent medical cooperatives?
I realise that this is not going to happen anytime soon. But it is worth making clear that if the political will were there, it would be possible to manage such a transition in a gentle, gradual way, which need not be especially disruptive.