‘Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.’
Nancy Pearcey (Author)
If you can recall the political debates leading up to the 2010 UK General Election, the Conservative Party’s claim that ‘the NHS will be safe in our hands’ may come to mind. This reflected an acknowledgement that the National Health Service had almost achieved religious status in the eyes of the British public.
However, action was needed: so, rather than broaden access across a range of competing suppliers, David Cameron sought to outflank the Labour Party by ‘taking politicians out of the day-to-day running of the NHS’, likening the move to independence for the Bank of England.
But, unlike the delivery of health services, the setting of interest rates governs our currency and its relationship with the world economy: de-politicised it may be, but it cannot be shared. In contrast, by setting up NHS England, Cameron simply added weight to an existing monopoly and did nothing to make the provision of health services more efficient.
Fast forward fifteen years and we can now see that the process of adding weight to that monopoly has just provided even more evidence of its ineffectiveness. However, abolishing NHS England, as announced by the Government last week, will not resolve the problem — what's needed is the acceptance that universality and monopoly cannot deliver results.
Over the past forty years, there have been many initiatives to introduce competitive provision into previously state-monopolised services, including electricity and water utilities, railways, post and telephones. The policy of privatisation was introduced by the Thatcher Government, and it has achieved varying degrees of success.
This is because some utilities — such as water and sewage services — cannot operate efficiently on a sharing basis, and these are the areas where the highest degree of regulation is needed.
In contrast, the ‘privatisation’ of telephone services has exposed British Telecom to the heat of competition, helping it to modernise considerably (although that process is not yet complete, even after forty years).
The introduction of competing electricity suppliers has also been generally successful, notwithstanding a rather overbearing approach on pricing from the regulator which is not currently enabling customers of ‘green electricity’ suppliers to see the full benefit of their climate-conscious choice of electricity generation.
The journey from monopoly to competing suppliers is certainly not easy, but there is no question about its push towards greater efficiency, more innovation and creative thinking and — most importantly — its customer focus; so that customers are treated with respect and not simply as account numbers.
The NHS, in contrast, has to rely on the ‘Florence Nightingale’ mindset which is shown by so many doctors and nurses in NHS hospitals, but which is not in so much evidence in administration and other areas.
It's not uncommon for people to think that competition has to be accompanied by polarisation of wealth, and there’s no doubt that many businesses do give a disproportionate amount of attention to those with the greatest capacity to spend.
However, those who believe in a more equitable society should not be tied into thinking that the only alternative is monopolistic universality.
If public funding is made available by targeting its provision on those from disadvantaged backgrounds, freedom of choice can be enabled throughout society. There are many ways to achieve this: in respect of health services, health insurance premiums could be either wholly- or partly-funded by Government in order to give patients more choice; whereas, for those able to pay, it should be mandatory for them to contribute to health insurance.
Hospitals and other medical establishments would then be able to draw down on these health insurance policies as patients made use of their services, as we proposed on 17th October 2022.
Comprehensive access to health information is essential for this to operate effectively, but the NHS App has already shown how this can be organised. It is, of course, currently focused only on NHS and state provision, but many people already use private GPs (due to the unresponsive nature of the state system), and regular health insurance check-ups, and the results of these should be incorporated into the App to ensure that the full picture is provided.
In searching for the opening quotation for this commentary it was clear that monopolies have built a deep reputation for inefficiency and greedy control. In contrast, open competition is one of the core tenets of democratic capitalism which enables progress and innovation to be made.
Of course, it needs effective regulation; and that's why we have agencies such as the Competition and Markets Authority. But this should not just be a feature of the private sector, while the public sector is left to groan under the weight of its state-driven monopolies.
The abolition of NHS England is a bold step forward by this UK Government, but simply politicising the monopoly will not solve its inefficiencies, while at the same time creating much confusion and stress. We need to go a step further and foster genuine, people-centred competitive provision for health services. As the title of Fraser Nelson's comment article in last Saturday's Times said, ‘The PM is on the move. Less clear is whether he will use his new, centralised control to do things for people, or to them. Does Starmer want to empower or to rule?’
Gavin Oldham OBE
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