Tuesday 21 February 2012 7:04 pm

A heretic’s view of the National Health Service

YESTERDAY, the Prime Minister met healthcare professionals concerned about the proposed reforms of the National Health Service (NHS). He reassured them that “this is about improving and enhancing our NHS, not in any way endangering it”. He is right that these reforms will preserve the NHS. Those who use it will still pay nothing. This is the defining feature of the NHS, and its politically sacred feature. Even politicians who understand that “user pays” generally promotes efficiency think it would be dreadfully uncaring in healthcare. They are wrong. A government that really cared about us would make us pay for healthcare. Services provided free to users are not gifts but burdens. They are compulsory purchases. Take a simple example. How much are you willing to set aside to cover the cost of medical care in your old age? Personally, not much. I would rather spend the money now to enjoy life while still deluded that I am young and healthy. I will save only enough to cover my basic medical needs when old and clapped out: enough for false teeth and a year’s supply of morphine. But wait. Like everyone else, I am entitled to comprehensive medical care when old, whether I can pay for it or not. So here is what I will do. I won’t save anything and then I will take all I can get free from the NHS, as will everyone else. How will the government pay for all this “free” medical care? By taxing me, of course, along with my fellow entitlement holders. In the end, my “entitlement” simply obliges me to buy medical treatment that I do not think worth the cost. Which is a strange way for the government to show it cares about me. Those politicians who provide us with entitlements are not billionaire benefactors. The burden of funding our entitlements falls back on us. Our entitlements thereby decrease our ability to consume anything else. Of course, many people consume healthcare, education and other state supplied services worth more than they pay in taxes. They effectively receive a transfer from those who pay more tax than they receive in state services. But even these net beneficiaries would be better off if they received not free services but their cash equivalent. This would allow them to consume according to their own preferences rather than politicians’. Perhaps you believe that no one in Britain should be so poor that they cannot afford decent healthcare. Well then, provide them with a guaranteed minimum income sufficient to buy health insurance. That is enough to satisfy your caring urge. If instead you provide them with free healthcare you achieve something quite different. You force them to consume what you think they should. But if you really care about people, you should care about what they want. The real beneficiaries of unpriced, tax-funded services – the NHS, the BBC, state schools, and the rest – are not their users; they merely lose control of their consumption. The beneficiaries are those whose services the rest of us are compelled to buy. Next time Cameron hosts some “healthcare professionals” at Downing Street, he should not offer them reassurance. He should tell them he is no longer willing to enforce their extortion racket. Jamie Whyte is a senior fellow of the Cobden Centre.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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