The Junior Doctors’ Strike

The junior doctors’ strike kicked off which has resulted in 4,000 routine treatments being cancelled and even more appointments, check-ups and tests. The doctors are on strike in a dispute regarding a new contract and their concerns about the level of pay for working weekends and stronger limits on working hours.

Absurdities and Fallacies

For most people who luckily are not employees of the state it seems strange to go on strike to demand changes to your contract. Imagine if the whole economy was built upon such an absurd and inefficient system. Most people’s minds are so obscured by the fallacious arguments around this issue that they cannot see the absurdities:

  • Why are customers of the NHS who pay for the services (via tax) being punished?
  • Why are the customers not being reimbursed for the lack of services during the strikes?
  • Shouldn’t those who fund the NHS (i.e. taxpayers) have the power to sack the NHS or the government for such a mess?
  • Would you pay for such a rubbish service in the private market?

How does the market work?

In the market, if you pay your employers too low, your competitors will take them off you (hence why retention is a big challenge for businesses) and if you pay them too high, you will incur costs and go bankrupt. The market then- in the words of Adam Smith- gravitates the price towards what the employee is producing for the employer. It isn’t a perfect system but it is the most efficient, accurate and dynamic one known to man so far. People in the market move jobs all the time for variety of reasons; some get a part-time job to pursue a hobby, some freelance so they can work from the comfort of their homes, some move for higher pay and more job benefits, some move solely because of location etc. This is the flexibility that the market affords- if you don’t see it in some places in the market, it’s because the government is involved in one way or another.

The Free Market Alternative to the NHS

The employees of the NHS find their job location, pay packages, hours and career progression highly bureaucratic and rigid. In the free market there wouldn’t be a monopoly such as the NHS which forces you to pay for its services via the coercive apparatus of the state. Instead, thousands of companies- from big multinational corporations to small firms- would compete with each other to provide you the best service for the best price. This healthy competition is also good for the doctors. If a private healthcare provider pays a doctor too low then the doctor will simply move jobs to someone who’s paying higher or get headhunted by rival companies.

Is Private Healthcare Bad for the Poor?

First of all, the NHS is not free; it costs the taxpayer well over £110 billion. And also with the good- such as ‘free’ treatment if you break your leg- comes the bad; especially in diagnosis. Here are some stories:

 

In fact, one report warns that doctors miss one in three cancer cases.  In fact the article recounts this story which demonstrates the superiority of private healthcare when it comes to diagnosing health issues:

A pensioner saw her doctor three times about difficulty swallowing, but it was not until she went private that she was diagnosed with end-stage oral cancer.

Nigel Farage has been in a similar situation:

After six weeks, I went to see my GP in Biggin Hill. By this time, I was having difficulty walking. My left testicle was as large as a lemon and rock hard. The GP arranged for me to see a consultant that day. To say that this consultant was disinterested would be an understatement; perhaps he had a round of golf booked for the afternoon. ‘‘Keep taking the antibiotics,’’ he preached, and that was that.

I was in a terrible state by now. I phoned the office and spoke to one of my bosses. He told me that I was covered with private medical insurance and that I should use it. The next day I saw a private GP, Dr Solomon, in the City. He told me I must have a scan. I had been alarmed by the swiftness of my own GP’s referral to a consultant but, after that, no medical professional had taken me seriously. Until now. Dr Solomon made an immediate appointment for me to see a top surgeon called Jerry Gilmore in Harley Street.

 

Second of all, in the market the suppliers want to grab as much market share as possible and therefore would compete for it. If a luxury healthcare provider offers healthcare for £10,000 a month but only a 10% of the population could afford that then other providers would compete to provide slightly lower quality healthcare at a £1,000 a month to grab another 20% of the market. Other providers would provide basic healthcare for the masses for £50-£100 a month. They would all also compete for ‘pay-as-you-go’ type of treatments. Now you may be thinking can a £50 a month healthcare provider be any good but you’re forgetting one very important thing. Competition brings about low prices but high quality and also incentivises innovation. Look at mobile phones: not everyone could afford them at first but now in a market economy we have phone companies competing with each other and almost everyone has a smart phone and everyone has some sort of a mobile phone. This is because the market competition pushes for higher quality products (which entails innovation) at lower prices. This is the historical pattern of the market; products are made more and more accessible to more and more people and quality continuously increases. This is true for anything from mobile phones, cars and PCs to toiletries, meat and clothing.

This is all notwithstanding the fact that people can still pay charity if they like now that they’re not compelled to do so by the state and that medical health companies can – for sincere charitable reasons or simply because of PR/Marketing- treat the poor and unwell.

4 Comments

  1. I am not convinced 3 newspaper anecdotes are the best evidence against the NHS. The same doctors would see you in a private system, although would probably have more time, thus reducing the risk of errors. There are 340m consultations annually in primary care alone and mistakes occur in any system.

    A recent OECD report has more convincing evidence however, as summarised in this IEA piece: http://www.iea.org.uk/blog/the-tale-of-two-healthcare-reports-and-what-it-tells-us-about-the-nhs

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  2. Hi Zach,

    This isn’t an academic paper. Three anecdotes were supposed to be examples of many (which the reader should have inferred). There was also a report that says one in three cancers are missed by doctors. These are in my opinion enough for a short blog article.

    But you insisted on more evidence but you provided one link to an article which itself is talking about two contradictory reports i.e. one that says NHS is one of the top healthcare systems in the world vs one that states it is one of the worst. Regardless of what this one commentator states on the website of one of the most well known free market think-tanks in the world, I don’t think we can call your evidence ‘convincing’ either.

    For those who want to ’empirically’ study the private vs public healthcare debate, I have some guidelines:

    1) Why did you decide to study it empirically?: here you must show how the Misesian branch of Austrian Economics is wrong when it says that empirical investigation of social sciences is rather weak and we must rely on logical deductions based on the axiom of human action.

    2) Are you doing the right kind of empirical research: your research may be immaculate and flawless but is it relevant?: In the early 50s, Alchian and Friedman separately argued famously that many empirical investigations were futile because of their misunderstanding of neoclassical economics

    3) Which methodology have you picked and why?

    4) There have already been debates on empirical and historical studies done on this debate. Have you taken them into account and how does your one differ or add to the contributions.

    5) and the normal checks e.g. the accuracy of your data? your sample size? etc.

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    1. Systems produce outputs, they can be observed. And you can conceivably, given some ethical assumptions, compare the measurements and make a judgement. If you want to predict which system might produce better outcomes, then I agree that the Austrian approach has more value than trying to extrapolate from past performance alone, in that much I agree with you.

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  3. The core issue with the NHS is it is a coerced monopoly. It is not about those who work in it.

    Moving from where we are to a pluralistic system without massive disruption is something I spent a little time thinking about and posted up one possible solution on this site a few years ago.

    The problem is it would almost certainly take more than one parliament and would require very careful explanations and reputations of FUD put about by ideologues and vested interests.

    The current “privatisation” is an abomination – replacing state run geographic monopolies with privately run monopolies is not a step forward. If anything, it is a step backward.

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