Why the NHS Should Not Be “Privatised”

Like many “libertarians”, I regularly spouted the idea of NHS privatisation. I assumed that it was a bygone statist organisation that should’ve been privatised like the rest of them were under Thatcher. I instantaneously assumed that the inefficiencies present in the current system would be cured by privatisation, like the wave of a magic wand. Now, I’m not so sure. The dichotomy I perceived, of private versus government ownership, is a completely false one that is usually taken up by what Carson calls vulgar libertarians. Unfortunately I was guilty of the same vulgarity. There are many conceptions of organisation and ownership that would be present in freed markets, such as common ownership, stakeholder governance, worker ownership, cooperatives, temporary microbusiness and many more. This whole dichotomy just feeds into the neoliberal narrative of evil government and good corporations, when in fact they both play on the same team. By privatising the NHS, we simply follow this path to the inevitable corporatisation of the health services of which, despite their many faults, have allowed UK citizens one thing many countries don’t have, a tax-based healthcare system that is nominally free at the point of use.

First I must define privatisation to make the argument clear. By privatisation, I mean the process of selling off a state-owned asset to the highest bidders. Thatcher presided over this phenomena with the selling off of public utilities and many other state-owned organisations. Now there is a convincing argument that what actually happened was the dissemination of shares to regular people, creating a conception of shareholder democracy. However, this initial phase eventually fell through due to the rigged markets found under Thatcherism that led to increased centralisation and a hoovering up of shares by large corporate actors. The whole process was illegitimate. If we look to the Hoppean idea of government property, it is in effect the collective appropriation of land and resources by the state via its coercive taxation regime. In reality these resources are the ownership of the people they were stolen from. In the case of public utilities, many of which were created by the state, they should have gone to the people of the UK through the shares scheme that was originally done, but also through other ownership models, such as local cooperative ownership, creating consumer and producer commons that would lead to a decentralisation of economic power in favour of individuals collectively owning shared resources. Through a shares regime that certainly could’ve happened, if stock markets were actually markets and not simply corporate tools for the movement of debt and expropriated wealth. In decentralised stock exchanges, we would’ve potentially seen stakeholder governance take hold or shared stock ownership, leading to divestments into utility companies that were locally based and further leading to a much more competitive market in utilities, particularly the energy market. And before some foolish, sheep-type libertarian gets on my case and talks about the knowledge problem and efficiency issues, the work of Robert Millward has clearly shown that public ownership, even the type found under Attlee and Wilson, was not significantly less efficient than private ownership. I believe this is because modern private ownership, represented best by corporations, is simply a form of implicit state control through specific regulatory apparatuses, complex tax laws that are exploitable and state-based protections such as limited liability and subsidies.

What actually happened was that stocks were put on the national corporate stock exchanges, which instantly benefits traders and corporate players over individuals who simply own a share. The idea of privatisation within the neoliberal framework is a fallacy, that many libertarians seem determined to make a reality. It is simply a continuation of the theft originally committed by the state to create these institutions in the first place. Real privatisation would mean decentralised ownership by consumer-cooperatives, local stock exchanges and direct democracy. The same formula is occurring with the NHS. The elements of privatisation seen, such as PFI and the dissemination of certain services to “private” companies, has simply benefitted corporations and vested interests at the expense of patients, doctors and NHS workers.

Current models of privatisation in the NHS has been a resounding failure. Internal markets have had some positive impact, but not enough to declare it anything more than a side issue. The Private Finance Initiative (PFI) has simply led to the indebtedness of many hospitals throughout the UK, which in turn has effected services and led to the contracting out of some services, allowing for zero-hours contracts and other forms of exploitative labour within the NHS. With the 2012 Health and Social Care Act, we saw a further wave of implicit privatisation, with private management taking over certain hospitals which again lead to many failings. There are two main reasons. The first is that the NHS is an extremely centralised system, but much of its socio-economic knowledge comes from local health problems and individual doctor-patient relations, which aren’t reconcilable with the top-down approach of the NHS bureaucracy and middle management. This is the basic knowledge problem that is faced by all centralised systems of organisation. It also leads to the second problem, which is that corporate management has as little understanding of the local knowledge as the NHS bureaucrats, thus imposing them upon hospitals is completely pointless. Instead, ownership needs to be in the hands of those affected, the doctors and patients. Again it may be said that the 2012 act introduced this to some extent by giving doctors powers through Clinical Commissioning Groups to govern the problems and knowledge found in their surgeries and hospital. However, because the decision-making process is still vertical and centralised, these groups become pencil-pushers who fill out paperwork and do little decision-making of their own.

Then there are questions of power involved in the privatisation of state-owned resources. Who do these privatisations benefit? As previously noted, much of the privatisation that has occurred in the NHS has been of little benefit to patients, creating indebted hospitals and reduced services. However it has benefitted the creditors and large service providers who can carve up the NHS and use it as a tool of profiteering. What would be created would be a series of private monopolies that could simply charge exorbitant prices and create regulatory webs that restrict competition through their rent seeking powers. While the NHS is far from perfect, the corporatisation of NHS services is much worse.

While I am opposed to the neoliberal idea of privatisation in relation to the NHS, I am no means a supporter of its continuation as a government service. The use of involuntary taxes to fund it is theft in my opinion. However we must remember it’s not a simple dichotomy of government versus private. This is a false choice. Rather, what I would like to see is a massive decentralisation of NHS services to individual hospitals. This in some ways solves the knowledge problem, with local health concerns and doctor-patient issues becoming more prevalent as services are coordinated locally, not nationally. Further, in terms of ownership I’m supportive of any model, but my preferences are towards a combined consumer-producer cooperative model, where patients, doctors and NHS workers decide on the processes of service provision and healthcare necessary to be funded, with voluntary community provision of funds through cooperative membership fees providing payment for such a system. A similar, more politically viable proposal is the idea of local health boards, with members elected by the general public so as they represent patient concerns and ideas in relation to healthcare provision. There could even be the development of decentralised record-keeping, with electronic records being anonymised for individuals through an autonomous, trust-based system, similar to the Blockchain, where health data is held by the patient and only shared with chosen recipients. The general decentralisation of ownership away from both corporate and government models is the best idea generally, as it allows organisation to reflect local needs and concerns better than any centralised, hierarchical system, whether that be statist or corporatist.

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