Question: Assess the economic arguments in favor of opening the NHS to a less centralized and more free market form of funding (12 marks)
At this very moment the NHS is using a centralized system. A centralized system is an economic system in which decisions about the production, allocation and consumption of goods and services are planned ahead of time. They rely on control and regulation by a government in accordance with a plan of economic development. The government have set up the NHS that runs throughout England. This system has allowed free health care occur. This is because the government funds the NHS. The money that has been given has come from the tax money we all pay. However there have been issues regarding this form of system as there have been many issues regarding waiting lists and the diagnosis of problems and illnesses. “The NHS is less equitable in its operation than the government suggests, particularly in its regular denial of treatment to the elderly and in a system of patient referral and priority that is often arbitrary and subject to regional and local variation”.
These problems have made many parties such as the Conservatives to opt using a more open or free market. A free market is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy. An example given of this free market is the passport idea that was given in the source. “Instead, under their ‘Right to Choose’ policy, patients would be provided with a ‘health passport’, and would have the option of treatment at any hospital, be it NHS or private, and at a time of their choice.” This will mean that the health care is split even more so that the health care is distributed and the work load on the NHS is less. It will also mean that less funding will be needed to cover the costs as part of the operation bills will be paid for by the patient if done privately. This will mean patients both on and off the NHS will receive improved treatment, as well as greater choice for customers. Paid healthcare also increases the patients’ perception of value for the service, which will now be quicker. However the free market system does not work perfectly. Corruption may occur, for example - health insurance companies do not like to insure patients with chronic illnesses such as arthritis due to the long-term expenses, whereas the NHS is obliged to treat such patients. Also doctors are more likely to be attracted to private health care because of the higher salary they will get, and therefore there will be fewer doctors on the NHS than in Private practices.
Overall I think that a free market would be better of, as it would improve the healthcare overall. The whole passport idea will encourage patients to move away from the NHS, and patients who remain with the National Health Service will experience improved care because of this. However we should not go straight into a free market as the sudden change may be very costly and very ineffective. We need to have a transition period over a few years to make the system work otherwise it may turn out like it did in the Soviet Union.