Britain’s Blair Supports Private-sector Health Care

Published July 1, 2003

British Prime Minister Tony Blair is backing away from his country’s decades-old socialized health care model, following the lead of Sweden, which has launched a revolutionary move away from single-payer and toward a blended private-sector and public-sector health care model. (See “Choice in Europe,” Health Care News, May 2003.)

On June 13, Dr. John Reid replaced Alan Milburn as Britain’s health secretary. Milburn, who left his position for family reasons, believed years of central control over the National Health Service (NHS) wasn’t working. Reid appears to be cut from similar cloth–“an arch-reformer of the Blairite school,” according to Dr. Eamonn Butler of the U.K.-based Adam Smith Institute.

At a recent breakfast meeting at 10 Downing Street, Blair told private-sector health care executives he wants to open the British health care system to outside competition. His comments are expected to accelerate reform of the NHS and squelch the Labour Party’s rebellion against creating privatized hospitals. Under Blair’s proposal, NHS would no longer be micro-managed by the central government.

The breakfast was attended by representatives of private companies bidding to run 11 diagnostic and treatment centers (DTCs) scheduled to open this December. The new private DTCs would cut through the government bureaucracy and waiting lines to provide fast-track hip replacement and cataract surgery for NHS patients. They are expected to perform about 100,000 operations a year.

According to London media reports, Blair told the group, “We are anxious to ensure that this is the start of opening up the whole of the NHS supply system so that we end up with a situation where the state is the enabler, it is the regulator, but it is not always the provider. The basic principles of the NHS will remain, but we will operate them and implement them in a different way.”

Controversy Remains

“Unfortunately, this is a half-hearted reform,” warns the Adam Smith Institute’s Butler. “These hospitals will still be NHS hospitals, and have no real power to borrow (except from the Treasury) or determine their own pay, conditions, or staffing. They are a step in the right direction, but a very faltering step.

“And of course hospitals are only a small part of the NHS. Ninety percent of patient contact with the NHS is with family doctors or pharmacists–and they are strained to the breaking point because of the regulation, paperwork, and targets the government has set for them.”

British officials were not uniformly supportive of Blair’s plan. David Hinchliffe, the liberal Labour chairman of the Commons health select committee, said Committee members could find no substantial evidence that private companies offered the NHS anything that could not be achieved by the public sector.

Butler disagrees.

“What we need are independent, profit-making or non-profit hospitals, willing to take on NHS cases that are paid for by the government. There’s nothing earth-shaking about this: we already send patients to French and Swedish hospitals in order to reduce the backlog of cases here. Old Labour supporters are against this ‘privatization,’ but it would open up the market for health care while still ensuring that those who need treatment are paid for by the state. The Conservatives are proposing a ‘passport’–really a voucher–system that would do just this.”

The potential private-sector health care provider companies include Netcare, the largest integrated health care company in South Africa, and a host of companies from the United States, Canada, Germany, France, and Switzerland. The companies would bring their own clinical staff, to avoid exacerbating NHS staff shortages. Moreover, in an effort to prevent “poaching” doctors and nurses from developing countries, the British health department has promised it would not go ahead without the blessing of the South African government.

“Politically, it is impossible to privatize the NHS overnight,” admits Butler. “But it’s certainly possible to open up the market to a mixture of public and private provision, and public and private payment, just as it is everywhere else in the world. I think we should give people the taste of freedom, and we will soon find them demanding more.”

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].