Private providers are the NHS’s last hope

The NHS is in crisis. Nearly 7.5 million people are on waiting lists, the highest figure since records began in 2007. There have been almost 100,000 more deaths of people with cardiovascular disease than expected since 2020. The junior doctors’ and consultants’ strikes remain unresolved. 

But we may now be seeing the first tentative signs that the Government is coming up with creative ideas to reform healthcare. As this paper reported, ministers have announced that private sector healthcare providers will be brought on board to provide over 400,000 diagnostic scans, checks and tests each year. We need to go back to when Tony Blair was prime minister to last see such an expansion for the role of the private sector in the NHS.

Our political class remains in fear of discussing social insurance models for funding the health service, such as those successfully operating in France, Germany and the Netherlands. So long as it remains taboo to consider any alternative to an NHS funded through general taxation, the only way of breaking up this inefficient monolith, with its shameful outcomes, is to bring competition into the provision of healthcare.

Mr Blair, writing in The Daily Telegraphlast month to mark the 75th anniversary of the NHS, called for a massive increase in private provision within the NHS. What is needed, he argued, are “new providers and new partnerships … where the incentives of funding and accountability are designed to encourage innovation. This must include active encouragement of new providers to enter the system, particularly for high-volume, low-complexity services, many of which can now be provided digitally.”

Such diverse provision is standard in European countries. And they enjoy better healthcare outcomes than the UK. Private hospitals only account for one in 10 hospital beds in the UK, compared to three out of 10 in Austria, four out of 10 in France, six out of 10 in Germany, seven out of 10 in Belgium and 10 out of 10 in the Netherlands. Spending by the NHS on private providers – even if we include general practitioners, dentists, pharmacists and optometrists – accounts for only about a quarter of the NHS budget. Private provision is much more significant in nearly all other advanced economies.

Those who are fond of lecturing us about how everything is done better in the European Union seem strangely averse to learning lessons in the few areas where European outcomes really are better than ours.

Yet much of the recent debate on NHS reform has not been about increasing private provision in the NHS, but further reducing it. Both Labour and the Conservatives, when Sajid Javid was health secretary, have contemplated making nearly all GPs direct employees of the NHS rather than private contractors. Thankfully, Labour has now somewhat rowed back on this. Wes Streeting, the shadow health secretary, states that he has “absolutely no intention of nationalising GPs”.

Despite signs of the shibboleth losing its edge, the public remain stubbornly wedded to the founding myths of the NHS. But they are surely much less concerned with who is carrying out treatment, provided it is timely, efficient, of a high standard – and free at the point of delivery. Few people live in fear of having their routine scan or operation in a Bupa hospital, rather than the local NHS behemoth.

The Prime Minister’s current skirmishes with the green lobby show that he can also afford to be bolder on the NHS. The revolt against Ulez ensured the Conservatives held Uxbridge and South Ruislip in last month’s by-election. This emboldened Mr Sunak to push back on the Government’s net zero commitments, albeit rather more modestly than this paper would wish. Nevertheless, even these tentative steps have resulted in a surge of support for him among the Tory grassroots. According to Conservative Home’s regular survey, a month ago his net satisfaction rating stood at minus 2.7. It now stands at plus 20.7. 

If competition improves healthcare, Mr Sunak and the Conservatives will reap the rewards. Their standing in the polls mean they have little to lose by being radical. And they will not just have potentially boosted their electoral position. They will have performed a service for the country. The NHS isn’t working. The best chance of making it work is to let loose a multiplicity of providers under its umbrella.