Health Economics with Focus on Privatisation of UK Healthcare System (Essay Sample)

Health economics with focus on privatisation of UK healthcare system
Introduction
The 1942 Beveridge report stated the fundamental requirements of the modern welfare state in the United Kingdom. It was implemented in 1948 by the labour government. National Insurance system and National Health Service schemes were established. These initiatives were based on the ideology that the government or state should safeguard the health of its citizens especially those with socio-economic needs. This can be in form of pensions, grants and other benefits (Greener, 2009).
Over the last few decades, there has been an extraordinary increase in healthcare disbursements internationally (Cohen, 2008). In the year 1973, £3 364 million was spent on both private and public healthcare in the UK, an average of £60 per person. However, by the year 2005, the figure had increased almost 40-fold. This increase in spending hasn’t been supplemented by a parallel decrease in demands on the healthcare systems hence cannot be justified (Cohen, 2008). These trends demonstrate that available resources are unlikely to meet healthcare demands hence necessary choices have to be made on how to best utilize the available resources to maximise the quality of care to be delivered (Powell, 2008).
Health economics
There is competition between the NHS, private and voluntary sectors in provision of healthcare in the UK today. There have been intensifying debates on the future of the NHS and on future privatisation of the UK healthcare system (Peedell, 2011). There have been major concerns on the eradication of welfare state and the implementation of a privatised healthcare system (Gubb & Mellerr-Hebert, 2009). Some argue that that healthcare should be left out of the domains of the normal market because of its significance to mankind and its upfront costs.
The most successful healthcare systems globally have certain common features such as strong regulatory frameworks, ability to respond to the market forces, meet minimum standards of quality and finance and availability of information on cost and quality of healthcare (Gubb & Mellerr-Hebert, 2009).
Over the last years, reforms have been carried out in the NHS despite challenges such as the UK government having control over healthcare funds raised from taxes. Others such as regulatory frameworks, culture, competitive tendering and provision all affect the success of the current reforms (Powell & Miller, 2013).
Market driven healthcare
It’s very difficult determining the market value of healthcare because of complexities associated with viewing it as a product or a service. The outcome is dependent on many factors which cannot be controlled by the healthcare provider (Douglas et al., 2001). However, we can adopt an economic analysis based on the concept of efficient use of available resources (Peedell, 2011).
Resource allocation
It is very difficult to assess resource allocation in the health sector because its market features are different from those of a perfectly competitive market. One must understand how the consumers (patients), suppliers (healthcare providers) and third party players (insurance companies) perspectives will differ with those in a perfect market (Douglas et al., 2001).
Privatisation of UK healthcare system
According to the World Health Organisation, privatisation is a process in which non-governmental actors, become increasingly involved in financing and/or provision of healthcare services (Maarse, 2006). Privatisation can be analysed from four different standpoints; i.e. financing, investment, provisions and management and operations (Powell & Miller, 2013).
Prime minister, David Cameron and the health secretary Andrew Lansey have repeatedly denied that privatisation of the NHS will not take place in England (BMJ, 2009). However, the policies contained in the Health and Social Care Bill point out that privatisation of the NHS is inevitable (Peedell, 2011).
Conclusion
There is an important role for the private sector in supporting the delivery of NHS care. However there are concerns of opening up the NHS to the private sector as the private sector puts profits before interests of NHS patients. This will result in a conflict of interest between shareholders and patients (Powell & Miller, 2013).
Health econom...