LIGHT AT THE END OF THE TUNNEL FOR BRITAIN?

(Post lifted from the Adam Smith blog)

It's now clear the way that National Health Service reform is going in Britain. The new Health Secretary, Patricia Hewitt, is announcing today that she is doubling the volume of medical and surgical procedures that are contracted out to the private sector.

Think-tankers don't often make good ministers, as Hewitt, who once ran the smug and irrelevant Institute for Public Policy Research, demonstrated at the Department of Trade and Industry. But they are slick at finding their way around blockages.

The fact is that the Old Labour part of Mr Blair's own party hate the idea of NHS reform, to which he and the moderates are committed. They forced him to water down his plans to make state hospitals more independent, and even then very nearly killed them, slashing his 160-plus majority to just 17. With a post-election majority in the mere 60s, how could he possibly get through further reform.

The answer is, as Hewitt spots, he doesn't have to. She already has the power to contract out NHS work, rather than give it to state employees. We already sent cataract patients to Norway and hip-replacement cases to France. Foreign healthcare companies have come in offering treatments up to eight times cheaper than state hospitals, using new techniques like mobile operating theatres. Do more of that, then more again, and pretty soon you have made healthcare provision entirely private. Once everyone has got used to it, and has seen the merits of competition, you can start devolving the funding down from the state to the individual, using private and social insurance or medical savings accounts.

It's a solution which the Adam Smith Institute proposed more than 15 years ago. Don't try to reform an unreformable, intractable, unmanageable state service. Build a dynamic new one and let the sclerotic old system, and its sclerotic supporters, fade away. Next stop: education.


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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

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