Monday, June 17, 2013

Healthcare Privatization

1.0.0 Introduction One of the most important concepts regarding the health care system in UK, as in other nations in Europe, has been the financing and provision of health care. Since time immemorial the financing and delivery of health care in the United Kingdom has been characterized by a number of agencies and actors; while a great number of these actors have been from the public, there have also been some from the private sector. The intricacy in the provision and financing of health care systems in United Kingdom and other European nations is amplified by the fact that private medical services may be delivered to the consumers of health services by use of for profit or not-for-profit frameworks. Chang et al (2013, p. 2) indicate that the United Kingdom is an independent state occupying the region off the northwestern coast of Europe. The United Kingdom is comprised of the Great Britain and the north eastern segment of Ireland Island as well as number of other smaller islands. The United Kingdom, documented to have a Gross Domestic Product of 2.260 trillion Great Britain Pounds, is home to an estimated 62,262,000 people (Chang et al, 2013, p. 2). In recent days, it has been clear that a great number of the political systems governing in different parts of the world are challenged by increased demands and declining public resources to respond effectively to this demands; one of the areas that has been greatly affected is the health systems. Peedell (2011) points out that in spite of constant denials by England’s Prime Minister- David Cameron-, his deputy- Nick Clegg, the Secretary of health Andrew Lansley- and the chancellor of the exchequer-George Osborne-, the privatization of the National Health System in the United Kingdom is inevitable. 2.0.0 Health Care in the United Kingdom History The National Health Service (NHS) was established in the year 1946 in order to manage the health sector in the United Kingdom. Prior to 1946, health care had only been delivered to the rich; the poor would go without medical services unless they were able to obtain such services from teaching medical centers of charitable health dispensaries (Chang et al, 2013, p. 2). The National Insurance Act was introduced in the year 1911 by David Lloyd George; as a consequence of this act, employees would agree to the deduction of a small amount of money from their wages every month in exchange for their accessing medical care. Although this was a relief to the citizenry of the UK, the problem of health care provision was not yet solved since only the formally employed could access medical services. In the mid twentieth century the policy in UK attempted to establish a public system of health where medical services could be provided to the UK citizenry at the points of need. Chang et al (2013, p. 2) claims that in this system every citizen was allowed access to the health services since health care was financed from the framework of central taxation. The system formed was a tripartite one in which health care was classified as either community services, primary care or hospital services. Within a few years the faults in this tripartite system became conspicuous and an in the year 1974 the system was radically restructured in order to allow local authorities in UK to support all three parts of the health care system (Chang, et al, 2013). The administration of the health care system was also reformed and by the year 1990 the National Health Service and Community Care Act had been passed. This act allowed for the establishment of autonomous trusts to oversee hospital care. The Blair administration also contributed to the United Kingdom’s health care system by creating the NHS Direct whose purpose was to improve the delivery of health care in UK be decreasing the length of waiting times and the costs of health care as well as enhancing the quality of health care delivered to the people. Current System Overview According to Chang et al (2013, p. 3) the United Kingdom’s health care system is amongst the most proficient in the world as demonstrated by a study of five areas of performance that were pointed out by the Commonwealth Fund Report; these are quality, healthy lives, efficiency, equity and access to care. The health care system in the UK is universal and financed by the government; it is referred to as the National Health Service (NHS). According to Chang et al (2013, p. 3) NHS is made up of a number of publically financed medical care systems in different parts of the UK such as Scotland, Northern Ireland, England and Wales. Despite being liable to NHS, the citizens in UK are also free to purchase private health insurance if they want. Nevertheless, as indicated by Chang et al (2013, p. 3) the public NHS health care system is more superior to the private health care sector as demonstrated by the availability of a greater number of health care specialists, hospital institutions and beds, better health care for the aged, more power and information for patients and stringent regulations in NHS organizations (Chang et al, 2013). Tandon et al (2000) claim that an investigative study conducted by the World health Organization revealed that and estimated 85% of the health care expenditure in the United Kingdom is covered by the government; the private health care sector covers the remaining 15%. The most popular private medical insurers in the UK include BUPA, AVIVA, AXA, Medicare international, Freedom Health Insurance and National friendly Health Care (Chang et al, 2013, p. 5). The United Kingdom’s health system is perceived as being unique from that of other nations such as the United States of America due to the fact that the UK system is typified by a compulsory insurance framework, secondary function fulfilled by the private for-profit insurance companies as well as the significance of the state in the planning and administration of the health system. Presently the United Kingdom delivers public health care to all its citizens, a number that translates to an estimated 58 million people. Due to the funds collected from the citizenry in UK, the health care system in UK is fully funded by the government at the point of need. According to Chang et al (2013, p. 2) an estimated 18% of the total income tax in the United Kingdom is channeled to the health care systems; this translates to an estimated 4.5% of every average citizen’s total earnings. Despite the fact that the health care system in UK is gradually expanding, the private health care system is still very minor in comparison to the public sector (Chang et al, 2013). 3.0.0 Privatization of Health System in UK In many commercial forums the process of privatization is commonly described as the process in which the government engages in divestiture or an entire sale of assets in the public sector to owners in the private sector. According to Savas (1989, p. 343) the process of health care privatization may be described in a number of ways. Firstly, it may be described the liberalization of the market or its deregulation for the purposes of enhancing the development of the private health sector by use of identified incentives. Secondly, Savas (1989, p. 343) claims that health care system privatization may refer to the “withdrawal from state provision, where in the private sector grows rapidly as a result of the failure on the part of the government to meet the healthcare demands of the people” (Savas, 1989). According to Triggle (2012) the Health and Social Care Act (2012) was created by the UK parliament recently; this Act is perceived as the most radical attempt of restructuring the health care systems of the UK since the advent of public health care. This act aims at privatization the health care system in the UK by doing away with the NHS primary care trusts as well as the Strategic Health Authorities. Triggle (2012) reveals that the formation of this Act is as a result of the coalition agreement deliberations which began during the 2010 general election campaigns. These deliberations between the Conservative and Liberal Democratic sides made clear their intention to “stop the top-down reorganizations of the NSG that have got in the way of patient care”. An estimated sixty days later a white paper was publicized in the Daily Telegraph, entitled “Equity and Excellence: Liberating the NHS”. The Daily Telegraph described this white paper as “the biggest revolution in the NHS since its foundation”. Peedell (2011) claims that the proposals made in the Health and Social Care Bill are in accordance to the descriptions of “privatization” by Sava (1989) for a number of reasons. Firstly a main part of the bill is the fact that it involves the utilization of the phrase “any willing provider”. This means that health care in the UK will be contracted by both the private and third sector providers. Secondly, the framework for external support for commissioning will also allow for the contracting of the management of commissioning to the private sector. The fact that the Health and Social care Bill proposes that all foundation trusts be transformed to social enterprises translates to “divestment by donation to employees” as described by Sava (1989) which typifies the sets of procedures involved in mutualization. 4.0.0 Should Health Care in UK be fully Privatized? Challenges The question as to whether or not health care in the United Kingdoms should be fully privatized can only be answered by deliberating on the challenges and benefits that would characterized the process, implementation and outcome of a process of full privatization of the health care system. The structural transformations that are suggested by the Health and Social Care Bill as regards the provision and financing of health care in the UK are opposed to the principles of universal health care coverage. On the contrary, the transformations will only serve to allow the private providers and insurers with an opportunity to maximize their profits. Weil (2011, p. 7) claims than an estimated 12% of the population in the UK is medically covered by voluntary health insurance plans commonly referred to as Private Medical Insurance (PMI). Nevertheless, many have perceived the federal government’s attempts to transform all NHS hospitals into fiscally viable foundations as unachievable in the time limit of 3 years that the government has set. More over, According to Stinson et al (2005) the increased commercialization of the health sector in UK will only leads to tighter regulations from international bodies such as WHO and WTO. More over, in order for the process of privatization of the health care systems in the United Kingdom to be effective the government would have to come up with a number of deregulation policies so as to allow the private sector to be more involved. Another main challenge in the privatization of the health system in United Kingdom is that it may lead to the commercialization of services that are better not commercialized. The health services provided and financed by the government, as well as education and public transport systems, are very significant public services that should not be guided by the sole purpose of making profits. According to the principles of marketing as indicated in many business forums, supply of goods and services is more consistent and reliable where the monetary demands are high. This implies that full privatization of the health care systems in the UK will by characterized by a high likelihood of excluding the poor people from accessing health care services. This is due to the fact that low populated areas as well as areas populated by people from low socio-economic backgrounds will not be able to come up with a satisfactory monetary demand to attract the supply of health care. In the health care systems remain public, the government’s health care planning agencies can easily respond to this issue of health care disparities (Andre and Hermann, n.d, p. 5). Benefits There are a number of benefits that typify a privatized health care system in the United Kingdom as well as other parts of Europe. One of the most significant advantages of a public health care system is the fact that it attracts the interest and participation of the general public in the nation. The public, through mobilization process by the government, involves itself in ensuring the control of infectious diseases. In addition to this, since the public ahs invested greatly in other social agencies such as learning and commercial organizations, it has a stronger interest that the private sector in ensuring the health of the people (Andre and Hermann, n.d, p. 5). The privatization of the health industry in United Kingdom will lead to a greater efficiency in the delivery of health care services; this is due to the fact that the private sector involved will be directed by a profit incentive which is to reduce expenditure while remaining efficient. The fact that managers and health care practitioners in government administered or funded hospitals do not share in the profits made tends to depict them as being less interested in the efficiency and expenditure of health care in comparison to that private sector. Another advantage that comes with the privatization of health care in the United Kingdom is the fact that it will lead to less political interference. It is often time argued that the government is not very suitable as an economic administrator due to the political forces that are in play. Retrenching the number of workers in an overpopulated human resource in a government funded hospital may never happen due to the “negative publicity” it may have for the government in the eyes of its electorate. In addition to this, the private sector may manage the health sector in UK more effectively since it does not have to worry about the consequences or outcome of the next general election. When governments are in complete charge or monopoly of the health sector, they may be unwilling to invest much in health care schemes that do not benefit them in the next elections. When the private sector takes up the management of a majority, or all, of the health care facilities in the United Kingdom, the sector will be under great pressure from concerned shareholders to perform effectively so as to avoid takeovers. This will be advantageous for the people as it will enhance the quality and quantity of health care that they have access to. 5.0.0 Investigative Study An investigative study conducted by the national health institutions in the United Kingdom in the year 2004 revealed that the NHS is the most popular system of health care in the United Kingdom and that it has the greatest support from the citizenry of the UK in comparison to the private system. This investigative study was conducted as a form of independent survey. Out of 100% of the respondents that were involved in this survey a total of 92% (from hospital in patients), 87% (hospital out patients), 87% (GP users) and 70% (Accident and Emergency department users) reported a very high level of content regarding their personal experience of the medical services that they accessed from NHS health care institutions. In addition to this, more than half of the respondents, 67%, agreed with the statement “My local NHS is providing me with good service”. Another 51% perceived as being true the statement that “The NHS is providing good service”. This survey also evaluated the most credible sources of information on the NHS according to the views of the respondents. The findings here revealed that 64% of the respondents perceived the national press as being more critical, 54% the local press and then 51% for TV and radio. Nevertheless, the most reliable sources of information-as depicted by the number of respondents in the study who thought so- were the GP leaflets (77%), information from significant others such as friends and relatives (77%) and data or information from healthcare practitioners (75%). 6.0.0 Recommendations There are a number of recommendations that the federal government in the United Kingdom should bear in mind in the event that its health care system is to be fully privatized.  Unless it is really necessary, the health care system should not be “fully” privatized so as to avoid the emergence of private monopolies that may infringe upon the rights of consumers and harm public interests.  The private sector has to be regulated so as to ensure that they adhere to particular standards of service as well as the cost of health care goods and services. 7.0.0 Conclusion This paper has deliberated upon the issue of health care privatization in the United Kingdom. After giving a brief overview of the history of health care systems in the United Kingdom, the paper has clearly depicted the process of privatization in the UK as well as the challenges and benefits that typify such a process. As has already been indicated in this paper, it is important to note that health care should be perceived as a public good rather than a commercial commodity. This is due to the fact that it is almost impossible for health care to function as per the principles of commercial markets. Publicized health care systems allow the state to play the important role of planning and administering the health care sector so as to ensure all citizens are supplied with health care regardless of their socio-economic backgrounds. The state also ensure that the health care practitioners and experts are not only well trained and adherent to the set standards and codes of ethical behavior, but that they are also provided with the equipment and resources that they require to dispense their services effectively. 8.0.0 References Andre, C. and Hermann, C., (n.d), “Privatization of Health Care in Europe”,, [Accessed on 22nd April 2013] Chang, J., Peysakhovich, F., Wang, W. and Zhu, J., (2013), “The UK Health Care System”, [Accessed on 22nd April 2013], pp. 1-11 Peedell, C., (2011), “Further Privatization is Inevitable under the Proposed NHS Reforms: The Government’s Health Reforms Fulfill Commonly Accepted Criteria doe Privatization”, BMJ, No. 342 Savas, E. S., (1989), “A Taxonomy of Privatization Strategies”, Policy Studies Journal, Vol. 18, pp. 343-355 Stinson, J., Pollak, N. and Cohen, M., (2005), “The Pains of Privatization: How Contracting Hurts Support Workers, their Families and Health Care”, Canadian Centre for Policy Alternatives Tandon, A., Murray, C. J. L., Lauer, J. A. and Evans, D. B., (2000), “Measuring Overall Health System Performance for 191 Countries”, GPE Discussion Paper Series: No. 30, World Health Organization Triggle, N., (2012), “Analysis: What Next for the NHS”, BBC News Weil, T. P., (2011), “Privatization of Hospitals: Meeting Divergent Interests”, Journal of health care Finance, Vol. 38, Issue 2, pp. 1-11