Image: Section of 1944 pamphlet - from "Beveridge on Beveridge: recent speeches of Sir William Beveridge", edited by Joan S Clarke (1944)

NHS Model – made redundant for being too good?

This is a blog in two parts. Part 1 will consider the international comparisons showing the current changes to the NHS as perverse in terms of the effect the sizeable increase in spending involved will have on population health. Part 2 will examine some of the background deals that have brought the UK to this bizarre situation.


International comparisons suggest we should renationalise the NHS instead of privatising it

The Beveridge model health system launched by the UK state after WWII has latterly been much critiqued, even derided, in the academic health policy literature, with little offered in its defence. On the face of it this is odd, for comparative statistics at national level make perfectly clear its advantages in combining high performance in supporting health, high to genuinely universal coverage, and at a lower cost than any of the alternatives.

The graphs below consider two population level indicators, lifespan and infant mortality, plotted from 2010 OECD data.

These two variables are used in international comparisons as standard proxy indicators of population health. The point of national health care systems (such as the NHS) is that they are supposed to protect population health in terms of reduced infant mortality and increased lifespan. Infant mortality relates more closely to health service performance, but covers only a single year of the lifespan and relates to a only small portion of the total service, while lifespan is a cruder proxy which is afflicted by many other factors alongside healthcare performance, but it is reasonable to assume that a national health service which does not increase longevity compared to no service would be widely considered to be malfunctioning.

The trends they show across the OECD countries are informative.

expediture on health care vs infant mortality


expentiture vs lifespan

Both graphs demonstrate the same data pattern, which apparently combines two trends. Taken together, these are very revealing about the organisation of healthcare.

On the left side of each graph, we see the countries with public healthcare systems at the top left and those with little healthcare provision at the lower left. There is a trend apparent which suggests that for relatively little investment, around $3000 (= £2000) per person per year, it is possible to run the best health services in the world. All of the top performers on health outcomes are publicly run services, and most were patterned on the Beveridge system.

Here is another illustration of why the UK government’s choice to copy the USA’s system is so bizarre as to imply that some form of malpractice must underlie it, also using 2010 data:

infant deaths per million births

So, even after the 2000-2010 decade of privatisation-supporting changes to increase NHS costs and reorganise the NHS to private sector tastes, the UK NHS still performs relatively well on both cost and outcomes at population level. Then why has the UK’s Beveridge system NHS been so thoroughly vilified in academia in recent decades?

The privatisers hate the Beveridge system: its demonstrated and demonstrable value for money makes clear the fact that the privatisers are selling an obvious rip-off, so it is a very undesirable comparator to have around. The trade lobby is keen to transform all Beveridge-style national healthcare systems to US-style healthcare, in which scared ill people and their families are highly motivated to pay through the nose to profit-making intermediaries who are in a position to exploit this to milk them of cash. At the same time, the insurance companies can relieve the “worried well” of thousands of pounds annually, for health insurance coverage that they would not have been accepted for if the company concerned thought there was more than a negligible chance of them actually needing it.

The current NHS privatisation is the mechanism to effect this transformation in England, with a very clever device, CCGs, invented by John Redwood MP and Oliver Letwin MP in 1986 as a transitional step to enable this wholesale transformation to an insurance-based system (see Adam Smith Institute’s 1988 The Health Alternatives for an explanation of how CCGs will work to turn the NHS over to the global insurance industry).

The Spanish Beveridge-style NHS has largely been destroyed now as part of the preparation for the TTIP (upcoming US-EU trade merger) and there have been riots over the introduction of charges. The Swedish one has been privatised under competition law, with the consequence that Sweden’s rural areas now lack medical services. The private sector aren’t interested because it’s not profitable for them so the market leaves gaps there, while the government is no longer allowed to intervene to add services because that’s an interference in the market, illegal for states under competition law rules.

The Italian Beveridge-style NHS is under the same attack but so far their doctors have been clever enough to exploit the chaos in Italian politics to stall it. Until recently, both Israel and Saudi Arabia had Beveridge-style systems which delivered excellent results at low cost; both have been besieged by management consultants promising market miracles, and both are in the midst of privatisation now.

What does the ubiquity of this disinformation in recent studies on the NHS signify?

It means that the academic literature has been targeted as part of the privatisation, as part of Oliver Letwin’s creation of the interest groups necessary to make privatisation first conceivable and then deliverable, by infiltrating what the public see as independent bodies, or by creating convincing astroturfers. The consequence is that the overall independence of the academic sector’s output has been lost, meaning some viewpoints are now absent from the debates. These tend to be those that contradict or expose the commercially helpful findings of the sponsored studies; they are of course, the viewpoints of the public interest and of the losers from the sponsors’ planned activities.

Overt actors include privatisation cheerleaders like REFORM (source of our PM’s current “Health Adviser”), and 2020Health, whose patrons include the heads of the Conservative and Liberal Democrat Lords Health Teams that saw the Health and Social Care Act 2012 passed into law, wholly against the public interest. Covert actors masquerade as socially concerned independent commentators, but inspection of the boards of the King’s Fund and the Nuffield Trust reveals both are dominated by business interests and senior management consultants who have had long term involvement in the NHS privatisation, with McKinsey & Co represented on both boards.

Unfortunately many academics have been taken in by the marketing of such astroturfers and treat them as independent academic commentators instead of the PR agencies they are. This category error has been disastrous for the NHS, with many genuine academics misled by it into citing attack-advertising as if it were research evidence for the wisdom of marketising then privatising the UK NHS.

Part 2 of this piece will examine the circumstances behind the scenes that have led to the imminent destruction of Britain’s jewel, the NHS.