It is rare these days for the plight of the glorious and wonderful NHS to be out of the news. From omni strikes to increased waiting lists and the inaccessibility of general practitioners, the problems mount up. Barely a day goes by without some handwringing commentator expressing concern about the intensifying and unprecedented crisis or a politician claiming to have the magic formula for turning things around.
Regular readers will recall that I have an affection for numbers. Having had long exposure to delusional narratives from self-accredited experts, I find numbers provide better insights, particularly if multiple data sources can be analysed simultaneously.
It was therefore no surprise when Aviva, a major provider of private health insurance, reported a 25% increase in sales in their healthcare division, with 123,000 new customers in the first quarter of the year.
BUPA, the largest provider of private insurance in the UK also reported strong earnings growth in its last financial year.
In March, Spire Healthcare, a listed private hospital group, reported an 8.3 % increase in activity.
All of these companies made bullish statements about the strength of their markets in respect of forward guidance to investors.
Private healthcare providers are enjoying boom times because NHS England figures from May show that performance in our world beating socialist healthcare system continues to deteriorate. Fewer than 60% of patients currently meet the 18-week treatment target. Readers should bear in mind that official NHS statistics are frequently ‘managed’, so this number is almost certainly the ‘best case’ scenario.
Figures released this month by PHIN – the Private Healthcare Information Network – show an 8% year-on-year increase in private admissions, the highest since PHIN began recording the data in 2016. For readers unfamiliar with PHIN, it is a body set up after a Competition and Markets Authority investigation into private healthcare some years ago. Its data is reasonably robust as private hospitals are required to provide the information. Both privately-insured patients and self-paying customers rose in the reporting period. Interviewed by the Financial Times, PHIN CEO Ian Gargan predicted there will be more than one million private sector patients this year and he expects private medical insurance to become more popular. “In a cost of living crisis, people still are willing to pay and prioritise their health,” he said.
Hard to disagree.
Right across the landscape, private healthcare providers are developing new products aimed squarely at self-funding patients, unable to access timely and high quality treatment on the NHS. The specialist professional medical press is replete with articles advising private practitioners on how to cash in on the self-pay boom.
Readers may imagine, that, as a self-employed doctor, working entirely in the private sector, I would be quite pleased by these developments. On the contrary – I think it’s an absolute tragedy. I also think it’s going to get substantially worse with the potential to become a national disaster.
More worryingly, I can’t see how things can get better in the foreseeable future.
The proximate cause of our current predicament was the catastrophic unnecessary lockdown policy with its entirely foreseeable impact on the NHS and the wider economy. This came on top of many structural problems which had been building for years – I have previously written about the unintended consequences of changing workforce demographics, the reduction in training times and the intensity of training, as well as changes in working practices and a cultural shift in workforce attitudes.
The question now is how do we get out of this mess?
It might be instructive to compare and contrast the current situation with the last time there was a serious issue with NHS waiting times in the late 1990s. The Blair Government came to power pledging to reverse this trend (which was nowhere near as acute as our current situation). New Labour splashed huge amounts of taxpayer’s money on the NHS – much of it was misspent on ruinously expensive PFI projects or on the new contract for NHS consultants – which meant doctors got paid more but with no corresponding increase in productivity.
However, there was one intervention that did have an effect: ‘waiting list initiatives’. This was all about reducing headline waiting time numbers by paying doctors extra for operating in the evenings or at weekends on patients who were likely to breach targets. Procedures could be done either in NHS hospitals or in the private sector, the key point being that doctors were paid by the case – it wasn’t included in their NHS salary. In effect, this was performance-related pay. The money was good (being close to normal private rates) and the work plentiful. The top rate of tax was 40% with generous allowances for saving into pensions. A no-brainer for energetic young consultants with good operative skills honed by years of intense training. They paid us, we worked hard, things improved.
Unfortunately, today is a different story. After the catastrophe of lockdown, brought to you by the same healthcare experts who are still running the system, the economy is in a mess, with debt-to-GDP in excess of 100% (it was 37% in 1997), current tax rates at a 70-year high and volatile inflation.
Financial incentives don’t work nearly as well when marginal tax rates on income over £100,000 are 62% and tax thresholds are frozen with inflation at 8%. Tapered clawbacks, such as loss of child benefit, also reduce incentives to take on extra work for those on lower payscales. For the industrious, a tax rate of 45% kicks in on earnings above £125,000. Much has been written about the disincentives around pension limits – the recent abolition of this absurd tax is welcome, but may not shift the dial because Labour have pledged to reinstate it if it wins the next election.
Readers may find it hard to find sympathy for high-earning doctors – I entirely understand that. Yet the point I’m making is that incentivisation changes behaviour. If society wants stuff done, it isn’t going to happen for free. Doctors are no different from the rest of the workforce – they will not take on extra work if there is minimal financial benefit due to high tax rates. As Charlie Munger (Warren Buffet’s business partner) pithily observes: “Show me the incentive, I’ll show you the outcome.”
Here is an example of change in behaviour. During the recent Junior Doctors’ strikes, consultants were asked to take on extra shifts to ensure hospitals were safely staffed at night. Many chose not to be remunerated in extra pay, but by ‘time off in lieu’. Faced with high marginal tax rates, it’s preferable to take extra time off particularly when the gearing incentives are double time for the emergency work – because the benefit of extra holiday is that it can’t be taxed. The result is that large numbers of anaesthetists in particular have accrued vast amounts of leave owing, so there are fewer available for elective lists. Interviewed by the Telegraph recently, the outgoing president of the Royal College of Surgeons observed that there were many hospitals where surgeons were only doing one elective list a fortnight, often due to lack of available staff. Lack of staff is not solely a problem in surgery. Last week a group of cancer doctors wrote to the Health Secretary about deficiencies in the specialist oncology workforce. Despite more money being spent, NHS productivity continues to fall.
These perverse financial disincentives are only a small part of the story as to why the NHS is failing so badly. I have written previously on the impact of changing workforce demographics on productivity. Simply put, an increasingly female workforce (many of whom are second wage earners) generally prefers extra time with children to extra time with patients – and who can blame them? A disinclination to take on extra work has been noted in other sectors of the economy. When fiscal policy does not reward those who do extra, this seems entirely rational to me.
Blair, Brown and their health secretaries Milburn and Hewitt, succeeded with their healthcare plan because they inherited an economy which was in pretty decent shape. It’s telling that Starmer, Streeting and Reeves have been conspicuously quiet on the normal Labour mantra about NHS underfunding, because U.K. health spending now ranks 5th highest in the OECD, although our outcomes are among the worst. Their silence on potential solutions suggests they know how problematic the situation is – I suspect they may be quite anxious at the prospect of assuming responsibility
Irrespective of who wins the General Election in 2024, the root and branch reform needed to transition to a European-style mixed healthcare economy is not even on the agenda. In addition to a mixed economy, we also require direct linkage of compensation to productivity – which the BMA will resist tooth and nail – and some system of demand management to reduce the colossal amount of pointless NHS activity. To get such a major realignment of how we ‘do healthcare’ in the U.K. will probably require the complete collapse of the current monolithic socialist system.
I fear we are heading for precisely that – with a two-tier healthcare system emerging by default. The current data reveals that direction of travel. Those who can pay will pay and be exploited by ruthless insurance companies and corporate hospital businesses. Those who can’t afford to pay will suffer. We haven’t reached the bottom yet.
The author, the Daily Sceptic’s in-house doctor, is a former NHS consultant now in private practice.
Stop Press: Isabel Hardman has made a similar argument to the in-house doctor in the Spectator.
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Just a comment about this line. “Those who can pay will pay and be exploited by ruthless insurance companies and corporate hospital businesses”. Well actually, if a private company wants to invest properly, and staff appropriately to provide services to the benefit of its customers, the patients, why is this ruthless.? Is it because they want to make some profit for the investors.? That doesn’t seem ruthless to me. It seems like a normal arrangement. Or have we fully converted to the concept of ‘free for the patient’ ignoring the vast amount of money it already costs for the NHS to be free to the patient.? One thing is for sure, that if this can keeps getting kicked down the road, there is no chance of us implementing a French or Australian style system. The market will just split into those that can and those that can’t.
Neil
COVID revealed, especially in America, how corporate private healthcare meshes with Big Pharma and corrupt government (both deliberately and consequentially) to constrain the professionalism of medical staff, to increase the cost of healthcare just as Big Pharma racks up the cost of treatment, and indeed to exploit staff financially for its own profit. Part of this is the interplay between health insurers, provate clinical facilities, and the malevolent interests controlling the whole medical industry.
Though he doesn’t spell it out in this article, In-house Doctor is right to observe that current private medicine is very far from healthy competitive capitalism, and there’s very little that can be done by medical professionals wanting “a fair days work for a fair day’s pay.”
Specifically on US Covid, there are concerns that US hospitals were inflating covid diagnoses because they got more government money for a “covid” diagnosis than, say, a bacterial pneumonia or fungal diagnosis. Does a similar situation prevail for other medical conditions, disorders and illnesses in the US? Did something like the alleged US covid mis-diagnosis scandal happen in the UK? Doubtless the UK statistics will be suitably ‘managed’..
I do see this, and I see how more and more the NHS’s function is to get a diagnosis that puts you on a ‘Care pathway’, in other words endlessly taking a drug or combination of drugs that may help you symptoms but not be the cure. The last thing BigPharma wants to do is to provide cures.
I don’t know. I think I saw that the good Dr was still making a case for the ‘Honest’ NHS vs the money grabbing, profit making alternative. Maybe I read too much into it. If so, I apologise.
Neil
I too may be wrong, but my understanding was that he was saying that if the NHS tidied up its act, the need for a money-grubbing private sector would diminish. As it is both are rent-seeking monopolies.
I think we saw the same thing from two angles. I can’t be in anyway confident in the NHS ever tidying up its act.. The only possibility for the future is to sweep it away and put something else in its place. I’m not keen to see a US style system either, but there are other working alternatives that could be tried. Not with the RCN and the BMA, and the whole of the left, and many of the right. The NHS is a religious cult.
NHS, PBUH…
Neil, have you seen how things are in the States? It’s absolutely horrific.
As crazy is this might sound, I think things are less bad in the UK, even right now.
As an American myself, I can vouch for that! When it comes to healthcare, the best advice we can give is, “don’t be like us!”
Hands.
Face.
Space.
Stay at Home.
Protect the NHS.
Save Lives.
Huh.
All for nought, apparently.
NHS healthcare is going the same way NHS dentistry did. In the ’70s there were very few private dentists; they started appearing or offering dual treatment in the ’80s. Now it’s virtually impossible to find an NHS dentist. All you can get on the NHS is emergency dentistry.
Healthcare is going the same way. Those with money or insurance will pay for their non-emergency healthcare. Those who have neither, will only be able to get emergency healthcare; routine treatments will be unavailable/unaffordable for them.
From multiple first-hand experiences – Polish dentists in Poland speak very good English. The quality of their work is excellent, the costs are not high and you can get an appointment within a day or two. And you can get everything done in one, maximum two, appointments – none of the get an appointment to make an appointment to make an appointment for an assessment then 2-3 months wait for the work to be done with inferior materials as we have here in the UK.
Flights to Krakow are pretty cheap right now. Dentists will sign you up the moment you turn up and they accept cash.
And then sample the delights of Rynek, Wawel and Kazimierz into the bargain.
Even better, Polish dentists in the NHS over here. Thanks Gregor
One difference, it seems to me, is that the private dentist can work in the way that a private doctor did in the past – pretty well everything he does is in-house, using minimal staff. Equipment costs are high, but income can be set to cover that as well as a decent income by the individual practitioner.
Medical care is different, because it is so dependent on access to (regulated) pharmaceuticals, lab services, surgical facilities, physiotherapy, psychotherapy and so on. A private GP has to connect, somehow, with all those services. A private surgeon likewise, but with the addition that he must get referrals from GPs constrained by NHS diktats.
No individual can create that machine, so he must join one, and the punter is then paying for a corporate monster rather than a professional’s skills.
Part of the issue is that the model for “good healthcare” has been set by corporate interests (back to Rockefeller, originally). If it were the case that much expensive investigation was not usually necessary, that cheap off-patent drugs are better than Pharma’s exorbitant offerings, or that someone needs lifestyle changes rather than remedial surgery or lifelong treatment, few patients will see the private practitioner in a small office without comparing him to all the busy departments in the NHS or BUPA.
Plus, of course, the fact that the GMC will soon strike off that guy in the small office for prescribing ivermectin or not prescribing statins.
Thanks for this
As much of this kind of original content as possible please
I totally agree. This is the kind of writing that can only be found here and this is the sort of thing I willingly pay for!
I worked in an admin position in a medical school some 20 years ago – one of the ‘new’ schools set up in the early 2000’s using the new methods of teaching ‘problem based learning’. Students then were about 50/50 male/female. Many of the female students then talked about eventually working as a GP – family friendly and part-time. Teaching time and curriculum space was fought over by competing anatomy professors (& other traditionalists) challenged by the ‘newer’ disciplines of subjects such as sociology and palliative care – relevant and important in the round, some considered more than others depending on the politics of the time both professional and local.
The 5/6 years university study were full-on and I found most of the students delightful, diligent and talented -with a lifetime career ahead of them in the NHS if they wanted with the pension benefits that entailed.
I understood that the initial med school funding was given to the university as a way to try and provide a home-grown talent pool of young medics who would want to make a home and stay and work locally to staff the local big infirmary and surroundings hospitals where they worked for their training ‘rotations’ that were desperate for staff. They still are.
The academic Dean when I started – on the cusp of his retirement and trained in Scotland in the ‘old-fashioned’ method of working 100 hours+ a week on a team that followed patients from start to finish – in unguarded moments – expressed deep regrets about the changes in training – the working time initiatives – and the potential reduction in knowledge and experience in the new population of students as mentioned above.
It’s been said before but the ‘perfect storm’ of changing demographics, obesity rates and consequences & patient expectations and the lack of individual health responsibility confounded by the unavailability of good primary care is a disaster for everyone.
I never forgot my mother telling me that when the NHS was opened in 1947 she remembered seeing the queues of women with long-term gynaecological injuries lining up to be helped unable to have afforded the repairs before.
That resonated then and still does now. Where now indeed…….
Seconded.
The NHS is a sinking ship, plain and simple. No amount of proverbial lipstick can save that pig, and it is one that very few countries currently share. That said, I would still caution against adopting an American style system in its place. Single-payer Medicare for all (largely private practice and hospitals, but publicly funded health insurance on a fee-for-service basis) like most modern and even semi-modern countries curently have, seems to be the least worst alternative overall, provided of course that it is NOT subjected to the same neoliberal “death by a thousand austerity cuts” as well.
TL;DR version:
There are three kinds of service: cheap, quick, and good. Pick two out of three.
And healthcare is no different. Neoliberal austerians, of course, prefer to do it on the cheap, damn the consequences. And it shows.
I still smile at the sight of those numpty’s clapping the NHS outside their home. Just how stupid have you got to be to believe anything the Government tells you
That’s the problem with so called socialists. As they’re always spending other people’s money they have no conception of value. It’s not in their DNA