The mixed economy of welfare is a political system where a state utilizes both the public and private entities in the exercise of economic control. In other words, a mixed economy of welfare refers to an economic system that uses a mixture of socialism and capitalism (Barr, 2012). In welfare states that operate in this model such as the UK and Nordic countries, there is freedom of economic activities and government interferences in provision of social welfare. Therefore, the concept of free markets and government control blends seamlessly without mishaps. As a result, there is an effective interaction between the government and private sectors. Under the public sector, the government ensures the provision of defence and energy while the private sector participates in producing consumer goods, small-scale industries as well as agriculture. Most importantly, a mixed economy employs the universal provision of services such as education and health (Miller, 2004). Therefore, the private sector works with the regulatory authority to ensure that as much as it seeks to generate profits, the citizens are benefit as a whole. Unlike a free market system where the market forces determine pricing decisions, supply, and demand without government intervention, a welfare state ensures a harmonious provision of well-being to the citizens without rivalry. The private sector works within the government regulations to benefit the citizens. There has been a rising privatisation of healthcare because the concept promises increased efficiency particularly in the public sector. Privatisation promotes more individual choices and the reduced political accountabilities for the shifts or changes brought by the private sector. The paper seeks to explore the benefits and demerits associated with the private sector provision of healthcare in a mixed economy of welfare.
Advantages of Privatisation of Healthcare
The National Health Service (NHS) is an inefficient system that is highly overrated and does not achieve more than other universal healthcare systems (Niemietz, 2017). Firstly, the Health Secretary ordered the investigation of the NHS for the increased infant mortality at one of its trusts. The fact that the NHS is free to some point it does not promise an improved quality of care. Furthermore, the NHS is limited due to the lack of a broad range of treatments and the survival rate is also low especially in chronic diseases such as cancer. Besides, the NHS suffers from underfunding and it is estimated that it will need 50 billion pounds more annually by 2030 in England alone (Moberly, 2017). Therefore, the NHS needs radical reforms that improve how the system works to boost productivity.
The NHS is an unaffordable system that wastes billions of pounds. It is also unaffordable partly because of increased costs as medical technology progresses in healthcare provisions. According to experts, technology will promote the management of chronic diseases like cancer but it will lead to high prices. Besides, the NHS will need under funding sources, for instance, insurance because it is unaffordable through taxation. The universal health delivery was also lost when the NHS implemented the commissioning of registered patients to receive care. Competition in the private sector promotes affordability and better quality of care (Crawford, 2014).
On the other hand, the NHS is associated with complex bureaucracy. Critics argue that the King's fund has employed many managers with the backing from political bureaucrats. Currently, the organisational structure of the NHS is quite complex and over-regulated leading to increased transaction costs. The regulatory, bureaucratic and administrative burden is insupportable coupled with poor leadership. Many of the problems that face the NHS remain untouched. Therefore, privatisation will ensure sustainability in the healthcare system and minimised bureaucracy.
The freedom of choice is an integral aspect of the society. In healthcare provision, choice is essential. Therefore, privatisation of healthcare will lead to better and improved quality practices as well as pricing strategies. As a result, other than solely relying on the NHS for care decisions, consumers will have more choices while searching for medical facilities. More choices imply better quality standards and informed decisions among the patients.
Last but not least, privatisation of the healthcare sector will promote increased transparency and accountability. For instance, there will be a better management of organisational resources such as the staff. Moreover, the pricing decisions will be open so that consumers can learn to trust the private sector. The spending will also be transparent and organisations that will mishandle patients will be liable for their own mistakes. Currently, the NHS harbours irresponsible practices that are hard to prosecute due to the existing bureaucracy (Vecchi, Hellowell & Gatti, 2013).
Disadvantages of Privatisation
According to the Nursing Standard, the public healthcare is highly efficient because the programs are funded by the government (2013). Furthermore, international comparison studies stipulate that the public managed healthcare is sufficiently managed to ensure positive outcomes. For example, the US runs a private insurance system leading to the increased spending per individual. The cost of healthcare in the US is the highest in the world as compared to other countries that have a government managed system of healthcare (Mandelstam, 2007).
Similarly, private healthcare providers are typically profit-driven and that the bias by stakeholders can lead to over-treatment, charges and the bypass of safety concerns. However, one of the most disturbing concerns is that demand may be over-exaggerated for political reasons. The private sector stakeholders lobby in government forums and policymakers which could lead to the manipulation of figure to suit political purposes. For example, the pharmaceutical companies in the US lobby the policymakers and even pay politicians so that they can maintain a high cost of drugs (Hope, 2007). Furthermore, politicians with private entities may also at one point infringe on transparency to suit their political ambitions.
Privatisation of healthcare does not totally eliminate bureaucracy. Private entities also promote bureaucratic processes but on a different level than public institutions. The private entities have been accused of using bureaucracy to protect their interests or stakeholders at the expense of the consumers. The vulnerable people of the society will always suffer from such circumstances. Furthermore, privatisation also leads to health inequalities (Moberly, 2017). The privileged in the society benefit from improved health services because they have the resources to fund their medical costs. Moreover, the privatisation would lead to the creation of a monopoly entity that takes all the best doctors due to a better pay and working condition dividing the rich and the poor.
Finally, privatisation does not promote transparency and accountability. Since some of the private stakeholders are wealthy, they may use manoeuvres designed to get more returns by exploiting the health consumers. A core fear among the UK healthcare consumers is that patients would receive alternate standards of care other than the service paid (Sawyer, 2009). In conclusion, privatisation of the NHS is a critical milestone that will solve the ills facing the UK's healthcare sector.
Barr, N 2012, The economics of the welfare state. Oxford: Oxford University Press.
Crawford, S. M 2014, NHS privatisation: A step too far. The Lancet Oncology, 15(12). Doi:10.1016/s1470-2045(14)70399-7
Hope, C 2007, NHS to become 'unaffordable', says think tank. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/news/uknews/1544606/NHS-to-become-unaffordable-says-think-tank.html [Accessed 13 May 2018].
Mandelstam, M 2007, Betraying the NHS. London: Jessica Kingsley Publishers.
Miller, C 2004, A Mixed Economy of Welfare: A Plurality of Providers and a Diversity of Service User Relationships. Producing Welfare, 49-70. Doi:10.1007/978-1-4039-3850-3_4
Moberly, T 2017, Accountable care systems and accountable care organisations in the NHS: Progress or route to privatisation? Bmj. doi:10.1136/bmj.j4105
NHS privatisation poses many dangers 2013, Nursing Standard, 27(20), 15-15. doi:10.7748/ns2013.01.27.20.15.p10274
Niemietz, K. (2017). Why can't we admit to ourselves that the NHS is the most overrated? System in the world? [online] The Independent. Available at: https://www.independent.co.uk/voices/nhs-overrated-system-private-healthcare-america-inefficient-developing-world-a7683541.html [Accessed 13 May 2018].
Sawyer, M 2009, Theoretical Approaches to Explaining and Understanding Privatisation. Privatisation against the European Social Model, 61-76. Doi:10.1057/9780230250680_5
Vecchi, V., Hellowell, M., & Gatti, S 2013, Does the private sector receive an excessive return from investments in health care infrastructure projects? Evidence from the UK. Health Policy, 110(2-3), 243-270. doi:10.1016/j.healthpol.2012.12.010
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