Health problem is monopoly, not management

(Post lifted from the Adam Smith blog)

State hospitals and clinics in England went £140m into the red last year, with a quarter of them failing to meet their legal requirement to balance the books, government audit bodies have revealed. That's despite billions more of taxpayers' money going into them. Health Secretary Patricia Hewitt says they need better financial management.

No, that's not the answer. State healthcare is overflowing with managers. But since it's a monopoly there is no incentive for them to excel at the job. And doctors ignore them anyway, claiming 'clinical freedom'.

Last night the authors of our new health report gave a seminar at the Adam Smith Institute. They support the ideals of the National Health Service and many of its features. But along with many in the audience they were scathing about the ability of the NHS to deliver good, joined-up patient care. Sorry, they said, but this 1948 state monopoly has to go. Sure, the government should pay for a lot of health care. But we need state-run hospitals about as much as we need state-run supermarkets or clothes shops. People actually get a much better service if there is innovation and choice in its supply.

I was surprised just how directly people were talking. Even some government officials there were nodding agreement with this radical view. Or maybe not so radical, these days. People feel the extra billions being spent, but see no change in how the NHS is run. Shiny new buildings, same squalid service.

The NHS has long been a national icon, immune from criticism. Not now. The mood is growing that the 1948 monopoly model has had its chips. No amount of new management can save it. Better to break it up and make every hospital and clinic independent. One might even say, privatize them.

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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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