The most efficient way to deliver any service is through competitive free markets, this is an incontrovertible truth however uncomfortable it might be the current Conservative government.
Competition in the free market is the key driver of innovation and efficiency. Where agents in an economy compete with each other for the business of individual consumers, there is great incentive to keep costs down, to innovate and to constantly strive to improve service. The father of Economics Adam Smith observed and formalised this in his Magnum Opus “the wealth of nations” almost three centuries ago. Indeed this holds true whether the service in question is a loaf of bread from the local supermarket, a pot of paint from the local hardware store or your healthcare service from your local GP.
As well as writing on this blog I am employed as a Data Scientist. Consider the fact that I offer my labour in a competitive market. In order to ensure that I can continue to command a good salary, I must continuously keep up to date with technological updates, with advancements in statistics and machine learning and with changes in the business world. My salary is kept at a reasonable level (at least from an employer’s perspective) by the fact that there are multiple Data Scientist available on the market offering a similar service.
Now consider if I was the only Data Scientist in the market i.e. I had a monopoly on that form of labour. Well I then would have no incentive to continuously improve, without competition I could be sure of employment. My salary would be considerably higher than it would be if I faced competition as I would have all of the bargaining power (Economists call this producer surplus). Of course this is a micro example but absolutely holds true on a macro level. It is the situation we find ourselves in with the NHS. The truth is that the system is flawed by design, extra funding through increased extortion of the tax payer will not solve the NHS’s problems. A monopoly is a monopoly whether it is a private sector monopoly or a public sector monopoly.
Of course there are circumstances where for whatever reason perfect competition is not possible. One could reasonably make the argument that the national grid or the rail network are examples of natural monopolies, it would not make economic sense to duplicate infrastructure in these instances. This argument does not however apply to healthcare. There is absolutely no reason why we could not introduce competition in healthcare and we consumers would very quickly see the benefits.
We need a government with fresh thinking on this issue. And as long we continue to treat debate around the NHS with religious fervour we will not get a world class healthcare system. The conservative party must once again start making the argument for free market. While we can all accept progressive taxation as a means of tempering inequality, this does not necessarily mean that the state must own and run services instead we can simply redistribute and let the private sector do what it does much better any state committee.
