Should the NHS be privatised? Potential merits and demerits of privatisation of the National Health Service

Essay 2016 6 Pages

Economy - Health Economics




Potential Merits of NHS Privatisation
Economic Factors
Social Factors

Impending Demerits of NHS Privatisation
Economic Aspects
Social Aspects



The NHS Should Be Privatised


In 1948, the post-war Labour government in the United Kingdom (UK) initiated the National Healthcare Services (NHS). The NHS initiative brought together the hospitals, nurses, dentists, clinicians and pharmacists under one organisation to deliver free public medical services at various points of delivery. Since then, the provision of medical care has been entirely free and primarily funded from taxation, as an act of faith by the British administration. Since then, NHS has become one of the central issues in defining UK politics, where some argue that healthcare would be safer and efficient when managed by the government as opposed to privatisation provisions. As a consequence, contemporary NHS has become a different system, where both the public and the private sector provide healthcare (Pettinger, 2011). Typically, privatisation is used to describe the process or the act of transferring an industry from the public division, often overseen by the government, to the private segment. Thus, the aim of this paper is to critically evaluate the statement "The NHS Should Be Privatised," using an argumentative approach.

Potential Merits of NHS Privatisation

Economic Factors

Transferring NHS to the private sector is likely to increase the level of efficiency in the management of healthcare resources and services. Typically, enhanced efficiency has been used as the primary factor to support NHS privatisation. The private sector is mainly concerned with increasing the profit margins at the possible reduced costs of operations (Canvas, 2016). The profit-making concern is driven by the need to reward the stakeholders and the investors who put their resources in a venture hoping to obtain profit after a certain period. As a result, the managers and those involved in the management devise strategic plans to achieve financial goals, which are often time-bound. Such approaches have the potential of enhancing the overall NHS, not just for monetary goals, but also for service delivery (Naguleswaran, Tribedi, Fenn & Patel, 2015). On the contrary, government run organisations do not share profits with the stakeholders or the managers, hence little or no motivation to work hard and vigorously.

According to Buck (2015), the total amount spending increased to 4.26% in 2014 compared to 1.44% in 2013. In addition to this, Bucks reported that the annual spending in public health care was 10 billion pounds out of the 113 billion pounds spent in the financial year 2013/14. However, compared to the private sector, 6.5 billion pounds out of 10 billion pounds were spent. The variation indicates continued increase of interest in the private sector mainly because of the improved services. Also, it illustrates the efficiency of financial resources management in the private sector as opposed to the public sector, further affirming the preceding assumptions concerning privatisation of NHS (Buck, 2015).

Moreover, profit-oriented organisations are more concerned with long-term and sustainable approaches. Such factors are likely to streamline medical care in the UK. For instance, the UK government pledged to improve the health care system in 2013 by spending 3.8 billion pounds as a way of encouraging social care organization to adopt organised care plans. The government further assumed that the reduction of hospital admission from 2015 to 3% will save the country about 500 million pounds in the same year (Buck, 2015). However, this has been dismissed by the House of Commons Public Accounts Committee as impossible. These facts further illustrate the consequences of having a government depending on the electorate votes to remain in power, since most policies and projections are based on optimism rather than the available business facts. The fact that the government recognized the need to increase the efficiency of the management and coordination of health and social care organisations illustrates the prevalence of poor management in the public sector (Buck, 2015).

Social Factors

Subsequently, absolute privatisation of this industry will definitely eradicate political interference and interim goals in the management of NHS. Government agencies make poor business managers since all actions are influenced by political ideologies and stresses as opposed to economic competence and business ethics (Wheeler, 2013). For instance, a government may opt to employ surplus workers or increase the wages in attempts to please the electorates, increasing the burden of healthcare. It may also keep off from retrenching workers for the fear of negative publicity and the consequences during election periods. Apparently, most regimes are concerned about the upcoming elections, increasing the tendency of having interim plans and projects, depending on the immediate social or political needs of the society (Buck, 2015). This is different when it comes to privatisation. A privatised NHS organisation will be guided by business ethics, where critical decisions are based on economic principles (Naguleswaran, Tribedi, Fenn & Patel, 2015). Populist resolutions at the expense of economic development will not appear in the management of the healthcare industry.

Impending Demerits of NHS Privatisation

Economic Aspects

As previously mentioned, the formation of NHS brought together critical components in healthcare, making it one of the largest unions in this industry. Transferring the ownership of such a group is likely to bring about an inherent monopoly. Besides, the need for higher profit margins and efficient services will naturally outlive other corporations, leaving a privatised NHS as the sole provider of healthcare public services and hence the domination. Such a monopoly will increase the risk of citizens’ exploitation, by seeking higher prices for the essential services. Consequently, this will escalate the cost and deterioration of the healthcare services due to the need to cut the cost of operation to increase the profit margins (Wheeler, 2013).

Social Aspects

Secondly, the government represents the public interests at the expense of economic ethics and principles. Additionally, people hold the government accountable for any mess or catastrophic incidents that may occur in the public sector. Once the NHS is transferred to the private zone, the public loses the power to hold healthcare providers accountable. This is mainly because private companies are legally required to reward their stakeholders by prioritizing revenue generation (Wiggin, 2016). Evidently, private companies do not represent the public interest to reward the stakeholders. The government, on the other hand, stands for the interests of common people. As an illustration, the government is morally and legally obliged to provide essential services, even when there is no profit generated from such services (Pettinger, 2011). In particular, NHS must discharge its duties effectively regardless of the profit or looses being incurred. This approach is not present in the vocabulary of private businesses. As you would expect, profit-oriented business tend to retract from regions or assets with deprived returns as they project to achieve sustainable financial growth.



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Title: Should the NHS be privatised? Potential merits and demerits of privatisation of the National Health Service