The Genie of Choice: Has it been let loose in Britain? Britain?

National Review, June 30, 2003 by Stephen Pollard

Four months ago, the British health secretary, Alan Milburn, made the most revolutionary announcement since the introduction of the state- run, state-funded National Health Service in 1948. He revealed that he was planning to introduce a health-care voucher. He didn't call it that, of course -- vouchers are a nasty right-wing idea -- but you know what they say: If it looks like a duck . . .

As Mr. Milburn put it: "From December 2005, by when extra capacity will have come on stream, choice will be extended from those patients waiting longest for hospital treatment to all patients. They will be offered choice at the point the [general practitioner] refers them to hospital. Patients needing elective surgery will be able to select from at least four or five different hospitals, again including both [National Health Service] and private-sector providers." All patients, in other words, are to be given a choice as to where they are treated, and by whom -- including private hospitals. The cost of their treatment will be quantified and made available to competing health-care providers. Prices are to be set for procedures, and anyone who wants to will be able to compete for that business.

That is the essence of the voucher, first enunciated by Milton Friedman in 1955 -- and announced by Alan Milburn to zero fanfare. It was almost as if he was ashamed of it.

If the rhetoric is backed up by action, this is revolutionary stuff indeed. The National Health Service has been the archetypal system of socialized health care, with patients directed where to go and when, within a state-funded, state-administered, state-governed system, by doctors who are in turn directed by bureaucrats as to where and when they can have their patients treated.

When the NHS was founded in 1948, we Britons lived in a very different country. Food was rationed. Life expectancy was about 50. A third of the houses in Birmingham had no sanitation. Only one in eight married women worked. In working-class, poverty-stricken Jarrow, infant mortality was 114 per 1,000 births. Even in prosperous Surrey it was 41 per 1,000. Today it is less than 6 per 1,000 for the U.K. as a whole.

In almost every other walk of life we are assertive consumers who regard the money we pay for a service as giving us a right to a say in, and control over, that service. Indeed, as Alan Milburn himself put it recently: "We are in a consumer age whether people like it or not." Even the logic behind the NHS's funding method is now flawed. In 1971, 13 percent of the population was over 65, and 900,000 people were over 85; by 2041, 25 percent of Britons will be over 65, with 3 million over 85. Thus, at the very time when the costs of looking after so many more elderly are rising, the proportion of the population of working -- and so tax-paying -- age is shrinking.

With the channel tunnel linking Britain to the Continent, decent health care is only a train ride away. When I recently broke my wrist in France, I was treated in a busy emergency unit within 30 minutes. When I was stabbed in London, I had to wait seven hours to be seen, let alone treated -- par for the course in the NHS. In a consumer age, patients are no longer prepared to be patient. They see what is available across the English Channel and want it for themselves. And with the NHS having been, consistently for many years, at the top of voters' concerns, no government could afford to ignore the thrust of voters' demands for an efficient, equitable, affordable, modern health- care system.

The premise of the Labour party is simple: There is nothing fundamentally wrong with the NHS idea -- a comprehensive, universal, state-funded system. The problems are a result of underinvestment, inefficiency, and hopeless management structures. The answer is therefore relatively simple: to spend as much money as possible and reform the delivery mechanisms. Thus in January 2000, Prime Minister Blair promised to increase health spending in the U.K. from 6.7 percent of GDP to around 9 percent (then the EU average). He has been as good as his word: By 2007-08, Labour is due to spend 9.4 percent of GDP on the NHS -- [pounds sterling]105.6 billion (a real-terms doubling since Labour took office). Indeed, this spending bonanza means that the NHS will soon be responsible for 0.35 percent of the entire world's measurable GDP.

But there is, as Labour now sees, a flaw in the plan. Since 1997, spending on the NHS has already risen by 40 percent in real terms. Yet activity has increased by a paltry 6 percent -- a pretty awful return on any investment. Between 1999 and 2000 alone, spending rose by 9.2 percent, but the number of cases dealt with increased by only 1 percent.

The Scottish experience is even worse. Despite NHS spending levels that have long been 20 percent higher per person than in England, with over 30 percent more specialists, nurses, general practitioners, and intensive-care beds (relative to the two populations), waiting lists in Scotland are far longer than in England, waiting times are getting worse, and death rates for heart disease, cancer, and strokes are among the worst in the Western world. So much for money being the answer.