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NIEMIETZ Kristian

Dr Kristian Niemietz is a senior research fellow at the Institute of Economic Affairs. He is the author of the books Redefining the Poverty Debate and A New Understanding of Poverty.

I always find it bemusing when some protest group seeks to prevent the opening of a supermarket, or a fast food outlet, on the grounds that “the local community” does not want it. If that is the case, what are these people actually afraid of? I have never seen anybody being dragged, kicking and screaming, into a supermarket or a fast food store, so I’d imagine that if “the local community” is opposed, the business in question cannot be viable for long. If those protesters believed a word of what they say, they would sit back, relax, and watch gleefully as the business stands empty day after day until the lack of demand forces it to close.

As I rule of thumb, I trust nobody who claims to speak for “the community”, however that community is defined, because “the community wants X” usually means “I personally want X, and I want to force it on everybody else”. Those who protest against the opening of a supermarket, a fast food store, or whatever it is, know exactly that part of the community does want it, but believe that they should not want it. Such protests are really about making sure that people with the “wrong” preferences are not given the opportunity to act upon those preferences.

And that is also the mindset behind protests against the supposed “privatisation” of “our” NHS. Now, in case you haven’t followed recent events, you haven’t missed much. There is, of course, no “privatisation” of the NHS (unfortunately). There is just a wave of the usual paranoia, not the first and not the last, which is mostly about signalling membership of the right-on tribe. But it is true that since the introduction of patient choice and the decentralisation of NHS commissioning in the mid-2000s, the dividing line between private and public healthcare has become less like the Berlin Wall, and more like the US-Mexican border: still fiercely guarded, but no longer impermeable. Patients and local commissioners now have the option of choosing independent sector providers, and some of them do. Spending on healthcare services performed by non-NHS providers now account for about nine per cent of the NHS’s secondary care budget.

That is nothing in comparison to the social insurance systems of continental Europe. In Germany, the majority of hospitals are run by independent sector organisations, and even in France, a country one can suspect of many things but not of free-market fundamentalism, the private sector accounts for four out of ten hospital beds. But given where the NHS is coming from, it is quite a change. Labour’s quasi-market reforms have been the Glasnost and Perestroika of the British healthcare system.

The media narrative is that privatisation fanatics are secretly dismantling an institution that the public reveres, to sell it to their fat cat friends in the City. Nothing could be further from the truth. Any involvement of the private sector is either driven by the free choices of individual patients, or by the decisions made by local commissioners. In no way is this process “biased” in favour of private providers. Those providers are merely another option that patients and local commissioners can choose, or reject. That’s all. That’s what all the fuss is about. There is only one way in which the dreaded private sector could be exorcised from the system, and that would be to abolish patient choice and local commissioning, and to concentrate all power in Whitehall once again. Those who claim to oppose “NHS privatisation” are really opposed to the principles of patient choice and local autonomy, lest patients and local health professionals make ideologically impure decisions.

But as I show in my new paper Health Check: The NHS and Market Reforms, as far as it went, the introduction of patient choice, provider competition, and decentralisation, was a success. Rather than denigrate this legacy and give in to fashionable anti-market rants, healthcare policy should be about building on those improvements.

My paper outlines what this could mean in practice. The paper is not about designing an “ideal” healthcare system. It simply evaluates which parts of the ‘”quasi-market” reform agenda have worked, and goes on to develop a series of second-generation reforms that would build on what has already been achieved. If you are looking for just another confirmation of how wonderful the NHS is, don’t read it. But if you secretly felt a bit embarrassed when watching the Olympics opening ceremony (you know which bit), here’s a recommended reading for you.

66 comments for: Dr Kristian Niemietz: Labour, foes of NHS privatisation? But they made quasi-market reforms. Here’s my view of them.

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