While some campaigners and politicians on the British left remain convinced that the NHS constantly faces the threat of “Americanisation” or even being “sold off” to giant US health corporations, the hard right ideologues and “think tanks” most actively trying to “reform” away the NHS have time and again insisted that their vision for a more privatised system is based on very different models.
Kate Andrews, right wing commentator for the Spectator (and previously the obscurely funded Institute of Economic Affairs), has used her frequent appearances on BBC TV and radio panels to list the healthcare systems of Belgium, Netherlands, Germany and Switzerland, as well as Australia, as better performing alternatives to the NHS.
Analysis in the Lowdown has punctured the appeal of these “alternatives” – in funding terms alone these countries spend much more than the NHS, and have done for many years.
Ignoring figures distorted by the Covid pandemic, official figures from the Organisation for Economic Cooperation and Development (OECD) show Belgium spent 22% more than UK in 2019, Netherlands spent 29% more per head, Germany spent 46% more per head and Switzerland (the highest spending country after the US) spent 58% more per head on health than the UK. Australia spent 17% more per head – but wastes much of this, leaving many services subject to user fees.
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Interestingly a hard-hitting article on the Conservative Home website by Kings Fund policy advisor Charlotte Wickens has shot down all the right wing’s favourite ideas for “reforming” the way the NHS is funded, and ideas of encouraging more people to take out private insurance.
How does UK healthcare funding compare? (per capita)
Australian system
The Lowdown has previously commented on the expensive subsidies for private health insurance that were introduced in to the Australian health care system in the late 1990s, after the popular tax-funded Medicare system, introduced in 1984, had reduced the numbers covered by private health insurance from 70% of the population to just 30%.
Since then there have been growing signs of strain and crisis in the Australian system, in which the public sector hospitals carry the strain of almost all emergencies and complex cases, while the private hospitals cherry pick the simplest cases.
Dismissing Euro style reform another right winger, Adam Smith Institute President Madsen Pirie has chosen now to sing the praises of the Australian system, apparently oblivious to any of its problems.
Headlined ‘There is a health system the NHS could learn a lot from – and it’s certainly not America,’ Pirie’s article dismisses the US system – but also gives short shrift to the way health care is managed in the Netherlands, France, Germany and Scandinavia. For him Australia is the best of the bunch. He argues:
“Under the Australian system, the patient chooses where to receive healthcare, and the state’s money follows the patient to cover the costs of it. Australians are encouraged through tax rebates to take out additional private health insurance (PHI), and most do so. This often provides faster and more comfortable treatment, with the tax rebate reducing the premiums by about 25%. The private insurers are obliged to pool risks by charging people the same premiums without taking into account any existing or previous conditions. The tax rebate is justified by the lower costs to the public system when people go private.”
This glowing summary of the situation in Australian health care is completely at variance from many studies of the mongrel system created in 1997 by the right wing Liberal government’s decision to use tax rebates as an incentive (and the loss of them as a penalty) to drive better-paid Australians into taking out private health insurance.
In 2000 the European Health Management Association in an important report ‘The Impact of Market Forces on Health Systems’ noted that:
“In essence the Medicare system was proving too good for the private sector, so the government subsidised the private sector to allow it to compete better with the public sector! This was less ‘private competition’ than state subsidy of a private sector which could not compete.”
In 2001 another study correctly warned that not only would the diversion of public funds into subsidising private insurers result in restricted levels of spending on public hospitals, on which a majority of poorer Australians relied, it would benefit better-paid and wealthier Australians, who were least likely to need hospital care. It cited a study that showed much higher costs of private hospitals delivering the same treatment with the same equipment and technical and nursing staff.
By contrast if the $2.5bn spent on subsidies was invested in the public sector the government could:
“open and operate an extra sixteen 500-bed public hospitals. It absolutely dwarfs any monies the Coalition are putting into improving healthcare in rural and regional Australia.”
In 2012 it was calculated that the Australian tax rebates of $3bn in 2004-5 achieved “savings” of just $1.28bn in reduced caseload on public sector hospitals.
In 2020 a major international study of private health insurance published by the European Observatory on Health Systems and Policies included a whole chapter on the confusion and attempts to reform the Australian system since the 1997 changes. It noted that while in 1995 96% of health insurance had been with non-profit funds, by 2010 this share had fallen to 30%, with the profit-seeking sector dominant.
However less than half of the population was covered, with membership of private insurance plans falling to 47% of the population in 2016. The chapter’s conclusion noted that:
“This structure is not well designed for the coordination of care across hospitals and out of hospital services, for coordination across multiple providers, for the long-term management of chronic diseases, or for treatments that require complementary procedures, aids or prostheses and pharmaceuticals. …
“Services provided by professionals other than medical practitioners have been excluded from Medicare. … Services such as physiotherapy, speech therapy and other related health care are partially covered by insurance, depending on the policy type. The uninsured must either pay out of pocket or wait for limited public services.” (p60-61)
Last September the Guardian published an article highlighting problems in the long term care of older patients in Australian hospitals that were strikingly similar to the problems created by the lack of public investment in our NHS hospitals and our dysfunctional privatised social care system, arguing ‘There is no ‘magic wand’ for Australia’s healthcare system, but we desperately need a rethink.’
The following month came another highly critical look at the way in which the Australian system fails to connect up services – in a way reminiscent of the divided “mixed economy” of private, charitable and municipal hospitals in Britain before the NHS. There is an obsessive focus on hospitals when community services are what is needed most.
The Guardian article was headlined ‘Shiny new hospitals won’t solve Australia’s healthcare crisis. They could make it worse’. It argued:
“In the face of a national healthcare crisis, framed by upcoming elections in Victoria and New South Wales, comes an astonishing competition between the two major political parties to dot the states with new and redeveloped hospitals at a cost of billions. The ‘build and they will come’ sentiment will deliver worse outcomes if it detracts from general practice. …Professional bodies and health experts point to the lack of skilled workers at every level to staff these facilities.”
So the Australian system seems to be a more expensive and less efficient way of echoing and amplifying the problems we have in England’s NHS.
Indeed even Australian ministers admit things have never been worse. According to ABC News Health Minister Mark Butler admitted the health sector is in “the worst shape it has been in its 40-year-history.”
Many GPs have withdrawn from the inadequately-funded block-billing system, and imposed their own charges for consultations. Mr Butler confesses: “It has never been harder to see a doctor than it is right now. It’s also never been more expensive.”
This is a far cry indeed from Mr Pirie’s claim that: “Australians report that if for some reason their GP cannot see them in good time, you can find an alternative almost instantly. Again, that’s because the doctors are paid for seeing and treating patients.”
Even a cursory Google check by Mr Pirie before penning his paean of praise for the Aussie system would have shown him that as recently as February this year a report from the Australian government’s Productivity Commission detailed the impact of mounting out-of-pocket medical costs for Australians, with more people postponing or skipping visits to GPs, psychologists, psychiatrists and mental health professionals because of the cost.
In Victoria, 50 per cent of non-indigenous Australians waited longer than 800 days for their first visit with a public dentist, almost double the length of time from the previous year, and 10 per cent were waiting longer than four years, an increase of almost 12 months on the previous year.
Mr Pirie also claims, despite the evidence to the contrary, that the Australian system is cheaper than the NHS. But despite the system costing more per head than the NHS, the Productivity Commission report revealed in the last year, almost 22 per cent of Australians postponed appointments with a psychologist, psychiatrist, or mental health professional other than a GP (because each of them levies a charge).
And more than five in 100 Australians who needed a prescription for medication delayed or avoided collecting the drugs because it was too expensive.
Guidance on the cost of mental health services reveals the complexity of the multi-tier system in Australia in treating the patients least likely to be able to pay GP or other fees:
“Most mental health professionals set their own fees, so the cost varies. Check with your preferred mental health support service and ask if you can use Medicare rebates, private health insurance rebates, or NDIS budget. Some practitioners may also offer ‘sliding scale’ fees, with lower fees for low-income clients.
“Medicare rebates are available to people with a diagnosed mental health condition such as anxiety or depression. You may still need to pay a ‘gap’ fee. This is the difference between the health professional’s fee and the Medicare rebate.
“The first step is to get a mental health treatment plan from your GP.
“… Many private health insurers offer rebates for mental health services and medical treatment. Check with your health insurance provider to see if you’re covered.
“… You may be able to use the National Disability Insurance Scheme (NDIS) funding for mental health support. …”
In 2019 a report from the Grattan Institute calculated that Australian taxpayers were subsidising private health insurers by $6 billion a year in government-funded rebates and another $3 billion a year on private medical services for patients. 60% of all surgical procedures are performed in private hospitals.
So privatisation is an expensive business. It funnels profits into shareholders’ pockets, and leaves the poorest – with the greatest health needs – least able to find or afford the care they need.
Australia’s experience in the last 25 years proves that model is far from ideal. And while Mr Pirie has proved that right wing headbangers are just fine with it, it’s unlikely that any party openly proposing such policies would stand a chance of getting elected.
The best alternative to our underfunded, fragmented NHS is a properly funded, staffed and publicly owned and run NHS, backed up by a properly funded and staffed National Care Service.
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