Competition key to curbing striking quacks
The junior doctor pay dispute is a symptom of the uncompetitive nature of our country's health service, argues Comment Central.
Ever since its inception in 1948, the NHS has had an effective monopoly on the provision of healthcare in the UK. Despite attempts by successive governments to introduce 'quasi-market' competitiveness into the health system, genuine competition and patient choice remain elusive.
This lack of choice between healthcare providers is evident in the junior doctors' dispute we see today. As a young junior doctor looking to complete your medical training you have one option: the NHS. This is in contrast to a host of other professions, including law, architecture and engineering, all of which require on the job training to become fully qualified, but all of which offer prospective trainees a choice of organisations with which to complete their training. If a trainee lawyer, for example, is unhappy with the terms at one law firm they can switch to another. Similarly, if the existing terms of employment at a firm are changed to a trainee's detriment, he or she can exercise their right to switch employers. Junior doctors in the NHS have no such luxury.
This absence of competition also fosters inefficiency. According to the OECD, the UK ranks 24th out of 30 high and upper/middle-income countries for the efficiency of its healthcare system. As the Institute for Economic Affairs highlights in its 2014 discussion paper, this inefficiency is detrimental to patient outcomes. The UK has a per capita public health expenditure rate of $2,802 adjusted for purchasing power parity, above the average for the developed world of $2,536, including countries such as Australia ($2,614) and Finland ($2,583). Despite this, both mortality and five-year relative survival rates for a range of common cancers – including breast and cervical cancers – are below those of most developed countries. Of the OECD members, were the UK to reach the efficiency level of the fifth best-performing country (Japan), life expectancy in the UK could be increased by more than two years without any additional healthcare spending and without people adopting healthier lifestyles.
Absence of effective healthcare competition is not unique to the UK. However, common symptoms existent in all those countries that exhibit low levels of healthcare competition are higher levels of inefficiency and lower patient outcomes.
Transforming to a more competitive healthcare system while preserving universal healthcare coverage is possible. Using a national health insurance model, taxes are pooled and used to finance a government-run insurance programme, while healthcare is delivered by private-sector providers. Such systems exist in Canada, Taiwan and South Korea, all of whom have more favourable healthcare outcomes than the UK.
By moving to a more competitive healthcare system, patient outcomes will improve, while allowing junior doctors the ability to jump ship if they are unhappy with their terms of employment. Everyone stands to gain.
