Even the IFS, Nuffield and the Competition Commission admit that there is precious little demand for private healthcare

Last year, the Institute of Fiscal Studies (IFS) and Nuffield Trust (part of the private health provider) issued a report on the relationship between the NHS and the private sector since 2000 – or thereabouts. It is a good and full report, but its interpretation is that of a neloliberal think tank (Margaret Thatcher was an early member of the IFS) and Nuffield which – despite its protestations of balance – does have an agenda. Given these factors, some of the gems in there are to say the least surprising.

In the time since its publication, the Government has not started seizing on its findings for political gain. As we shall see, there are very good reasons for this.

Above all, what the report finds (without saying so out loud) is that the Conservatives have re-written NHS recent history to suit their agenda. In particular, the market data included therein suggests that, far from being a crock of the proverbial, the NHS did really rather well against private competition.

For example, between 1997 and 2011, public spending on health grew more quickly than it had between 1975 and 1997…for which read, respectively, Tory Government and Labour Government. The effect was to stunt the growth in the private health sector under the New Labour regime. This would suggest that, at the very least, NHS patients were satisfied enough with their treatment not to go private. The effect, in fact, seemed lasting: even after the banks dropped us in it during 2008/9 and public health budgets were cut, the market for private health spending continued to shrink at first…despite it being given some £5.6bn worth of business by the NHS itself after 2006.

Thus the IFS/Nuffield report concluded:

‘There is also evidence of some substitution between public and private funding, with people who might previously have paid to go private becoming more likely to use the NHS’.

Although we’re going back a long way here, the exact same thing happened in the education sector during the 1950s, when the very high standards being set by Britain’s free grammar schools shrank the private school sector dramatically.

However, once the Conservatives get into power, the private sector gets a two-handed leg up: NHS budgets are frozen in real terms – and are down when set against rising demand….and the amount passed over the private sector leaps (during 2011/12) to £8.7bn.

The Government as represented by the smarmy, mealy-mouth Jeremy Hunt tries hard to keep our eyes off this ball: but the empirical market facts speak for themselves: when given a level playing field on standards, the NHS provides a very real threat to the private sector…..and all those MPs who represent its interest. For example, former Health Secretary Virginia Frunt-Bottomley, second cousin to Jeremy Hunt – and the lady who cancelled the Government’s Terence Higgins Trust donation.

In starving the NHS hospitals of money (and then looking sad when they have to go into administration) the Conservatives are simply tilting the playing field back in favour of the private sector. It’s simple more of that behind-the-scenes market manipulation that neoliberals somehow seem to need all the time when their decisive markets don’t make decisions they like.

The truth looks to me something like this – which is, by the way, nothing new: only a small minority of citizens think private medicine is worth the money they’re asked to pay. Hence the reason (as the Competition Commission’s August 2013 Interim report showed) “Revenues from privately-funded healthcare services have been largely static since 2005….all five main [private] health groups report spare capacity in their hospitals”.(The percentage of US citizens with private health insurance is in similar long-term decline).

This latter study, by the way, was another attempt by the Government to “prove” the latent demand for private healthcare. As we can see, it showed the opposite. Not only that, in terms of “theories of harm” (TOHs) to natural market competition, only one out of seven of those identified said that the NHS ‘might’ be a barrier to new private entrants.

When it came to the private operators, however, the CC report had this to say:

‘Private hospital operators, on average, charge somewhat higher prices in local areas where they face fewer competitive constraints’

The CC’s final report is due out next month. We can expect some tortuously dishonest interpretation of its findings from the Government. Can we expect a persuasive, damning examination of it by the Labour leadership? Don’t hold your breath.

Yet again, the Conservative Party in its current incarnation is miles away from supplying what 93% of the population wants: a publicly provided health service as opposed to one based on insurance and private fees. It remains as keen as ever to give its mates an unfair advantage at the expense of the hard-up citizenry. I have been pleading for the mutuality solution for nearly three years now: take it away from a bungling, uncommercial State, and give it to a sector far less likely to cheat the customer.

Neither main Party is remotely interested in that solution. Which (sigh – as usual) tells you all you need to know about the Wasters of Westminster.