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Stop tinkering with the NHS – it needs a complete overhaul

It seems that I have a new addition to my ‘Do Not Read!!’ list of London Evening Standard commentators: Andrew Neather. The article from Neather that caught my eye on the train home yesterday evening was “I’ve seen the real cost of tinkering with the NHS

Neather begins his piece by trotting out the age-old red herring used by those who defend the current NHS setup – conflating the system with some of the people who work in it:

Down in the West Country for an aunt’s funeral, I was struck afresh by the oddness of people’s attitude to the health service. By the time my mother’s kid sister went to the doctor, it was far too late to treat her cancer. But for the remaining couple of months of her life, she received excellent care. “The nurses were so good,” said my mother.

And while, for sure, we read some healthcare horror stories in a nation of 60million, most of us say the same thing. In opinion polls, people consistently tend to rate their own care highly – especially their GP. But ask them what state they think the NHS is in, and half or more tell pollsters that it’s a basket case.

So your mother had a great nurse. How is that of any relevance at all to how the NHS is run? Presumably said nurse would continue to be a great nurse whether she worked in a state-run or a private hospital? It’s the same story with our GPs – in terms of the overall NHS system, we as customers at least retain some degree of control over whom we go and see in primary care. If we do not like our allocated GP, then we can usually ask to see a different one in future. Unfortunately, once we need specialist consultation and care, those of us needing NHS care pretty much have to take what we are given.

[Cameron] feels the need to do so because while the planned changes are complex, most people instinctively realise that NHS privatisation – companies profiting directly from their illness – is a scary thing. And they haven’t even lived in the US, as I have, and seen how rubbish such healthcare is in practice for all but those with gold-plated insurance policies.

Neather demonstrates his complete lack of understanding of economics here (although to be fair, none of our politicians apparently has a clue either). In a completely free market, i.e. with unfettered competition with no state interference in the form of barriers to new entrants, and with no regulations and tariffs favouring vested interests, profit is the deserved reward for entrepreneurs risking their own capital to provide goods and services to society. There is NOTHING wrong with profit – in healthcare as in any other industry – if it comes from voluntary transactions that benefit both parties.

Neather also throws in the obligatory red herring of the comparison to the US healthcare industry, as the bogey man to scare away people from even thinking about NHS reform. Of course the US is not the gold standard that we should be trying to emulate! As I wrote about previously, there are numerous other national healthcare systems with much better outcomes that we should be looking at for inspiration.

As a friend who is a head of service in mental health asks: “What if a private sector provider goes out of business -what happens to their patients? A decommissioned NHS service will not be there waiting.”

In a truly free healthcare market, there would be a multitude of private sector providers all competing for your business. If one provider went out of business (presumably due to incompetence or losing customers due to poor service), then there would be many others who could step in and would gladly take you on. If Ford went bust, would we suddenly not be able to buy a car? Would your lights go out at home if your electricity provider went into administration? Is Apple an international pariah because it makes stupendous profits from the sale of its highly desirable products? Of course not!

It would be perfectly possible to construct a fully privatised healthcare service in the UK, that would remain free at the point of use, and which would still provide cover for those who genuinely could not support themselves (e.g. the elderly & infirm, the mentally ill, etc). The problem is – and this is why I doubt that I will ever see it happen – that to create such a system would necessarily entail the dismantling of a system which serves the needs of the providers, rather than us the customers.

Perhaps the saddest thing about all this is that useful idiots like Neather don’t realise just how effectively they are being used by the same vested interests that perpetuate the NHS ‘basket case’ we all know is there…

Keynesian cretinism at the London Evening Standard

Like many thousands of other people, I pick up a free copy of the London Evening Standard to try and help minimize the pain of the daily commute home coutesy of South East Trains. Normally, the LES is a good read and time passes quickly. However, every now and again I come across an article that is so completely wrong that I can feel my blood pressure rising while reading it.

There are a few of the regular writers that I can now expect to be highly annoyed by whatever they write (e.g. James Fenton, Chris Blackhurst, Jenni Russell), but one of them stands out: Anthony Hilton, the City Columnist. One of his latest articles appeared last week, “Debt isn’t always bad. We may even learn to love it

Here a few of the (many) paragraphs that got my blood boiling:

In fact, the whole saga shows up our politicians at their worst. Listen to Chancellor George Osborne and you could easily believe government debt was invented by Gordon Brown. In fact, he made a pretty big reduction in the debt levels he inherited from his Conservative predecessor John Major – fixing the roof while the sun was shining, to coin a phrase – until he was knocked hopelessly off course by the financial crisis and the need to bail out banks.

Of course, it is unfair to blame Gordon Brown alone for our current problems – our fiat currency, the policy of the US and most other ‘developed’ countries’ governments to finance ever-increasing state debt via the printing press and permanent inflation (i.e. currency devaluation), and rampant crony capitalism are just some of the systemic Keynesian problems that no UK government has done anything to address for the last century.

However, the major cause of our current problems in the UK at the moment is the structural budget deficit – in other words the amount by which state spending oustrips tax revenue. Far from ‘fixing the roof while the sun was shining’, Gordon Brown spent our money like there was no tomorrow and built up the public sector of the economy to the point where it is now larger than the productive private sector. This is Gordon Brown’s legacy to the nation – had there been no financial crisis or bank bailouts the deficit would still be the same.

On current projections, debt is expected to stabilise at around 70 per cent of GDP or, shedding the jargon, it will be the equivalent of just over two- thirds of all the output generated by the entire nation in one year.

However, if things turned out much worse than that and debt rose to 100 per cent of GDP, the interest would still only be about five per cent or 5p for every £1 earned in the country. Eminently affordable, so why the panic?

Hilton appears to be talking about the UK’s “official” state debt, which helpfully excludes most of our pension liabilities as well as a tranche of other items (e.g. public-private partnerships) that are kept “off the books”. In fact, the UK’s total debt has been forecast to hit £10 trillion by 2015. For an even more frightening example of how much trouble we are all in thanks to Brown et al, have a look at this video – the total US debt is greater than the combined GDP of the whole world economy:

One more paragraph:

It would be wrong to say debt does not matter but we need a sense of proportion – and having made the point, the Government must move on. Talking tough on cuts may keep financial markets onside, but the Government’s priority should be to restore economic growth, not fixate about the deficit. Get growth right and the deficit will take care of itself; but a government which defines itself by cuts stands a very good chance of making things worse.

At the risk of repeating what many independent bloggers have pointed out ad nauseam already, what cuts?? The result of the ‘biggest cuts in a generation’ – you know, the ones that are proceeding “too far, too fast” – is simply a reduction in the rate of increase of our debt. Worth repeating: these cuts constituting the “final solution against the poor” will not even sort out our deficit, let alone start paying off the debt itself.

Hilton would do well to cold turkey himself off his big-state Keynesian theories and perhaps school himself on Austrian free-market economics. Who exactly is going to fuel this growth when those same people are slowly being strangled by red tape and de-incentivised by ever-higher taxes? Once again, who was in power over the last 13 years and did more than any other Chancellor to put these things into place?

Anyway, rant over. Hilton and the legion of others like him is the reason why I – like many others – no longer get my news from the mainstream media. If you want to start thinking for yourself then type ‘libertarian’ or ‘Austrian school of economics’ (or, for any US-based readers, ‘Ron Paul’) into your browser and see where it takes you.

In the meantime, note to self: stop reading Hilton’s articles. He’s not worth it.