The NHS is world class – if you ignore its woeful outcomes


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When he described the National Health Service as a religion, Margaret Thatcher’s chancellor Nigel Lawson highlighted a peculiarly irrational aspect of British culture which persists to this day.

The widespread fiction that Britain’s healthcare system is somehow uniquely benevolent or successful is in no way helped by selective studies claiming otherwise. The Commonwealth Fund health think tank, for example, recently made headlines by claiming that the NHS is “the number one health system”.

The study in question ranked the healthcare systems of 11 countries, and found that Britain, Australia, and the Netherlands topped its rankings, while Canada, France, and the US languished at the bottom. This positive result is certainly surprising given the well publicised problems which have beset the NHS recently, such as the tripling of long waiting times for surgery over the past four years, and increasing rationing of basic healthcare services.

Such failings hint at the perennial problem of shortages due to price controls, which have been a key cause of the NHS’s underperformance throughout its history. When the state interferes in healthcare markets to hold down prices, it removes the incentive for consumers to economise and question whether they really need a given service, or whether those scarce resources could go to others in more desperate need. This inevitably leads to a greater number of people clamouring to extract services than the supply can handle, forcing the use of rationing and long waiting lists. So inevitably do price controls lead to shortages that, as the great Austrian economist Ludwig von Mises observed, “even capital punishment could not make price control work, in the days of Emperor Diocletian and the French Revolution.”

How is it possible, then, that the NHS should have ranked so highly in this recent study, despite these major problems?

The fact that public support for the NHS remains so high, despite this fundamental problem with the system, provides a stark real-life example of the dangers of ignoring economics.

Unfortunately however, price controls and shortages are far from the only problems which stem from the organisation of British healthcare as a nationalised monopoly. As Kristian Niemietz of the Institute of Economic Affairs has highlighted in his studies on this topic, many of the characteristics of the NHS which Britons mistakenly believe to be a unique source of pride, such as the fact it makes healthcare accessible to the poor, are actually present in almost every other healthcare system in the developed world.

The things which actually do set the NHS apart tend to be more along the lines of its widely acknowledged hostility to innovation, standards of maternal care which regulators described as “truly shocking”, and infant death rates so high that certain NHS trusts have had to be brought under police investigation.

How is it possible, then, that the NHS should have ranked so highly in this recent study, despite these major problems? The answer is in the great weight the study gives to banal matters of procedure, with relatively little attention paid to the small matter of keeping patients alive.

One might think that the NHS’s place in the bottom 20 per cent of developed countries for both cancer survival rates and medically avoidable death rates would be seen as too important to be swept under the rug in this manner. The Commonwealth Fund study also gives surprisingly little weight to the NHS’s dismally low efficiency in terms of healthcare bang per buck, a fact which undermines those who advocate simply throwing more taxpayers’ money at the system.

In terms of actual healthcare outcomes, most studies show the NHS ranking closer to former communist bloc countries like Slovenia than to its Western European neighbours. So poor has the NHS’s performance been that, if British healthcare were to improve even to the point that it was merely equal with Spain, a country whose GDP per capita is 25 per cent lower than Britain’s, 10,000 fewer Britons would die of medically preventable causes every single year.

The boundaries of socially acceptable debate still have a considerable distance to shift before the true rot at the heart of British healthcare can be addressed: namely its status as a taxpayer funded state monopoly.

Until this fundamental structural problem is addressed, the NHS will continue to fail its patients, just as the nationalised monopolies of the 1970s failed, and no politically easy remedies, such as increased funding, will be able to change that. In the words of economist Thomas Sowell, “you will never understand bureaucracies until you understand that, for bureaucrats, procedure is everything and outcomes are nothing.” For as long as British healthcare continues to be run as a government bureaucracy rather than a consumer-facing business, the very lives of British people will continue to be just another “outcome” for the state to ignore.