Zach Cope at Libertarian Home has a post that puts today’s UK NHS junior doctors’ strike into perspective.
…junior doctors have little choice of employer as there is an NHS monopoly on training; the market has shown the pay and conditions are too low, with dangerously understaffed rotas, rising emigration and increasing locum rates. The government’s proposals would reduce staff pay for an equivalent rota over time, thus hoping to delay the inevitable financial collapse of the NHS on their watch…the problem of regulation and central contracting leads necessarily to collective bargaining and industrial action.
Centralised provision of anything always leads to shortages. Mr Cope has various ideas for decentralising things in his post, too.
Personally, I envisage healthcare that is cheap and good because it is private. So cheap and good that nobody has to think twice about poor people who can not afford treatment. Much as our friend the Guardian commenter narnaglan described:
Did you know that the only medical proceedure where quality is going up and price is going down is elective Lasic eye surgery? Thats the proceedure where your cornea is made thinner to adjust the focus of your eyesight. It is not available out of stolen money, so the people who provide this service, and there are many of them, all compete with each other to give the best service at the lowest price. They compete to offer you the latest, safests techniques, using the most sophisiticated equipment.
Think about it. There are three Lasic clinics, two offering the same service at the same price and the third offering it at a lower price. Only one of the three has the latest equipment. You pick him out of the three, because he will give you the best outcome. The other two must adjust their offer to attract the clients. People with a little less money might pick the third, cheaper clinic, and the middle one might be chosen because it is closest.
What this shows is that in a dynamic market, everyone is served, and all clinics and service offerers are incentivised to do their best at the lowest price. This is completely different to the NHS, where it does not matter how dirty the hospital is, or what the outcome is; since there is no choice, no one needs to care about the price of anything or the quality of service being offered.
Of course, it will be cheap but doctors will still be well paid because they will be so effective.
This was in the Guardian? Seriously?
Pull the other one!
1. “Sir Keogh” ?
2. My recollection is that pre 1997 junior doctors really did have to work very long hours. And then Gordon poured in squillions so they could work shorter hours. It was perhaps his top productivity reducing scheme (no mean accolade) – for a LOT more money, the NHS got a lot less work from junior doctors, and a serious slowdown in their rate of training. Strangely, I’ve not seen this detail mentioned in all the chatter about the hardships faced by junior doctors now.
Sympathy level – slightly below zero. If you don’t like the deal, go and be an investment banker. The hours are tough, but the pay is pretty good.
So private schools will be cheaper too, as they compete? Oops, that didn’t work. Because private schools don’t compete on price, but on quality. And they pitch to the market with spare money, the rich.
Moreover schools and hospitals operating to the general public can’t be small and lean. They need to be quite large because they need wards, nurses, cleaners, cooks etc. Small private hospitals can and do compete (they do in NZ) but they concentrate on nice profitable parts of the industry.
There are branches of the medical industry that competition works well in. I would suggest dentistry is a better example than eye surgery. But again, they can be small and lean, able to move quickly to match the market. It’s quite different if you build a 200 bed hospital.
“So private schools will be cheaper too, as they compete?”
Yes. Before the state got involved, education was cheaper.
A market beats a monopoly.
Cheaper, how much tax per patient?
Zach Cope says “This sounds complex but the principle is that the individual must have some stake in the money being spent, or saved, when accessing healthcare, and that the more transparent and open this market is, and the more incentives can be aligned, the great the chance of maximising value.” Everything in that sentence after the “but” is certainly correct, but the “complexity” in his plan is unnecessary. A “digital voucher via a blockchain”? Why? There already exists a perfectly serviceable payment method: it’s called currency. All that’s really needed is to open up the healthcare system to private markets. No need even to eliminate the NHS: competition will work its magic and the system will either improve dramatically or collapse under the weight of its inefficiencies. Cope has been seduced by his own cleverness; his system would succumb to its inherent complexity.
Here in Oz we had a major revolt and then backdown over a modest fee ($5 or so) to see a GP.
Because it would hurt “the poor”.
But here we have the doctors refusing to get off the government teat so Mrs Grundy and Billy 10Whoppers dont come in every week for a ‘consultation” which consists of nodding their head and renewing a script.
http://www.abc.net.au/news/2015-03-03/tony-abbott-declares-gp-co-payment-dead,-buried-and-cremated/6275912
…”The original proposal would have saved $3.5 billion over five years according to the budget figures released last May.
….
Australian Medical Association president Dr Brian Owler welcomed the confirmation.
“The policy was never one which was going to improve general practice or make the healthcare system more sustainable, so we are pleased that finally we can end some of the uncertainty around that aspect of the co-payment proposal,” he said.”…
I am slightly confused by pickets holding signs that say ‘Save our NHS’. Why do they think that the NHS needs saving and from what? Is there anyone here who can enlighten me?
The junior doctors’ strike seems to be led by a bunch of Leftists some of whom are outright Marxists, with all the ritualised chanting and sloganising of the Marxists. However, if they genuinely believe in nationalised medicine provision, then who are they to dispute the right of the State to dictate the workers’ terms and conditions?
Do they believe that the State should do their bidding? If they do not, then they must take whatever they are offered, or resign. That would be consistent with a belief in socialised medicine.
If they do believe that the State should do their bidding, then on what basis do they claim the right to determine State policy? If they think that they are a special case to the extent that they alone should determine their terms and conditions, they should say so. If they think that they have the right to require Parliament to disregard the mandate (such as it is) of the electorate in respect of provision of money for the NHS, then they should explain where this right comes from. Or is it do as I say, not do as I do, like pretty much every other socialist.
Ah, the joys of a top-heavy nationalised self-serving bureaucracy. Anyone else remember the NCB? No C–t Bothers.
@Laird you confuse the blockchain with bitcoin, although Zach does mention bitcoin too the focus is on the blockchain – an immutable public ledger. The transparency he wants to get using the immutable public ledger will stop providers over-committing to care and allow shoppers to buy into a stable provider as well as helping to set the price of procedures.
General tip for understanding blockchain, when you read the word substitute it for “immutable public ledger” (or “Beyonce” if your prefer, but that joke has been done).
Mr Ed: I suspect the doctors decided they wanted to be doctors *first*, then jumped through all the hoops, including ideological ones and appeasing Marxist leaders, to get there.
Rob,
Those Marxists and Leftoids get there because like the Krikkit Warriors, as Ford Prefect put it ‘They care*, we don’t, they win’. (*i.e. care about winning, not patients). It is the fundamental problem with any form of non-commercial organisation that is not overtly devoted towards good ends (e.g. people who keep old aircraft running etc., nothing quite repels a Lefty like an English Electric Lightning), fanatics move in like rats in an open biscuit warehouse, displacing those content to lead apolitical lives and hijacking organisations so as to pursue an agenda.
This will come as a surprise to the French.
Simon, I understand that although Bitcoin uses a blockchain the two terms are not interchangeable. Nonetheless, I fail to see any significant value in creating an “immutable public ledger” for this purpose; certainly not enough value to justify the complexity. “Stable provider”? The market will handle that quite nicely. “Over-committing”? Ditto. “Helping to set the price”? Ditto again.
Bitcoin requires a blockchain because it is attempting to establish an electronic currency; it’s a protection against counterfeiting. How does one “counterfeit” a service? Either you provide it or you don’t. As I said, unnecessary complexity.
Cope is making things complex by trying to combine one solution for two things which ought to be looked at separately, i.e.:
1) Provision of healthcare
2) Payment for healthcare
Let’s start by making a competing market in the provision of healthcare, first. Leave it state funded until the market is functioning, and then look at the funding model.
The NHS is the religion of the British – it is rare that I agree with Sean Gabb, but Dr Gabb is correct on this point. And it is not a religion in the sense of careful reasoning (such as with Richard Hooker), it is more a “religion” in the sense of a fanatical cult.
Logic, reason, historical evidence – all collapse in the face of this religious devotion that the British have for the NHS.
Which means there is little chance (this side of a collapse) for real reform. Piles of dead bodies, due to the NHS, will just be taken (by the people) as proof of “cuts” in government spending on the NHS (even though there have been no cuts) and they will demand that it be given more money. And the more it fails – the more the people will demand that yet more money be given to it.
Any suggestion of real reform will be taken by “the people” as proof that the reformer wishes to deny the poor medical treatment.
Still turning to an alternative universe – where real NHS reform was practical politics.
The model NOT to follow is that of the United States.
In the United States medical care is reglated – regulated to an insane degree. Eveything has endless pages of government regulations attached to it – from getting permission to build a hospital (a private hospital) to practicing medicine itself. And there is demented Tort Law system on top of all that.
Also the government paying the bills for medical care in the United States (local, State and Federal government now pays about half of all the bills) has, with the insane levels of regulation, led to an EXPLOSION of heath care costs.
The American “health care system” is in a death spiral – with ever higher costs (due to government subsidies and regulations) leading to ever more (yes more) collectivism.
How to get back to a system where the person pays – either individually or via mutual aid (Fraternities, Friendly Societies and so on….) I do not know.
I wish I did know – but I do not know.
But we must remember that “choice” when someone-else-is-paying dod not work out well.
Americans have a “free” choice of universities – and the government picks up the bill (the “student loans” will never be paid back – they are over a TRILLI0N Dollars now)
That has not worked out well.
In fact it has been a disaster – with the government subsidies for higher education (like the government subsidies for medical care) leading to an explosion of cost.
How precisely would private schools compete on price against somebody who gives their services away for “free”?
It’s not just the NHS that’s the problem. We should never forget the doctors’ monopoly in the form of the British Medical Association. This restricts – doubtlessly intentionally – the number of doctors creating the whole over-worked junior doctor phenomenon.
Both the problems of companies over-committing to care and a backlash against fees to visit the GP can be solved very easily by an insurance based model where GP visits are included within the standard premium, but customers can choose to have higher deductibles (‘excess’) for visits and treatments, for a lower annual premium payments.
What Laird said – the infrastructure already exists – we do already have a functioning private sector after all so little in the way of innovation should be required. Adding a technological requirement for making changes just sets it up to fail.
The government could set a fixed reimbursement rate (for X categories of patient, determined by gender, age, smoker/non-smoker, postcode and so forth) that it reviewed. This would incentivise insurance companies to provide an efficient service, since they get to keep the surplus (or they could offer ‘cash back’). The government could review the reimbursement rate every 3-5 years or so; hopefully being able to lower it each time.
And again, there is no need to abolish the NHS. Just give it the flexibility it requires to compete.
So cheap and good that nobody has to think twice about poor people who can not afford treatment
Nobody should think twice (or even once) about poor people who cannot afford treatment because they do not deserve treatment. If you can afford stuff, you’re not poor. The whole point is that poor can’t have stuff that worthwhile people can.