The NHS has been more expensive than private healthcare for a while. But today is the first day I saw the actual figures.
I have covered this point in a previous article but I thought it was worth expanding upon.
Here are the facts.
Health care absorbs 17% of the UK governments tax revenue.
The average cost of a health insurance policy is around 750 pounds a year.
a healthy 40-year-old male with no dependants will be charged £500-£750 a year for PMI with restrictions around the amount of out-patient care offered.
A luxury plan with no restrictions, such as Axa PPP’s “Premier” will cost a 40-year-old in London more than £1,500 a year
Okay, so what does 17% work out at for someone earning 15,000GBP a year?
httpv
At a minimum 50% of everyone’s in income in the UK goes to the government. 20% VAT, 20% income tax, 10% National Insurance. This is ignoring all the other taxes like fuel duty, car tax, inheritance tax and so on.
The first 3600GBP is tax-free so that leaves 11,400GBP to be taxed by the UK government.
Meaning the tax burden for a person earning 15,000GBP a year is 5,700GBP.
Out of this 5,700GBP 17% goes to the NHS equaling a figure of 969GBP per year.
Private healthcare is nearly 20% cheaper than NHS healthcare.
And these figures do not even take into consideration the quality of health care between the 2 options.
These figures expose the absurdity of NHS cuts, NHS reorganisation and any other problems the government says it has re healthcare.
The fact of the matter is the NHS could be phased out, the tax burden to the UK taxpayer and UK business reduced by 17% and everyone would be better off. Better service for less money.
And don’t forget, a 17% cut in taxes would also make private healthcare cheaper than it already is due to reduced wage and operating costs.
I am not going to pretend that running the NHS is simple. It is massively complicated which is why individual businesses should be left to proved care.
Better to have hundreds of competing healthcare providers than one. 2 heads are better than one. Hundreds of heads are……
If the UK government is committed to real reform in healthcare then the NHS should be gradually phased out by region, with the taxes for that specific region being reduced by 17% in parallel with the NHS stopping its activities.
And detractors of this idea, do not try to compare privatised health care with the health care system in the USA.
The healthcare system in the USA is not a free market system. The US healthcare system is the worst of all worlds. It has a heavy dose of government involvement while the actual health care is provided by private companies.
The whole system needs completely free.
But that is not the end of the savings.
With a completely market orientated healthcare system there would be massively reduced costs to society as a whole.
No longer would binge drinking and smoking not have a cost to the person abusing their body.
With a privatised system people would finally have a real cash incentive to look after their bodies.
Finally, people who looked after themselves would be financially rewarded for their efforts through lower health care costs.
If there is one factor that is detrimental to the health of a nation is taking away people’s responsibility to look after themselves.
Can you imagine if car insurance was free? Do you think there would be more accidents or less? Do you think people would be more careful or less?
Do you think attaching a financial cost to self-inflicted injuries caused through drink would make people think twice about their actions?
When people can attach a price to smoking, are they more, or less likely to quit?
Do you think people will be more or less healthy if every year they had to have a full medical before renewing their insurance plan?
And this is just the savings to personal health.
There are also massive environmental benefits to privatised healthcare.
No longer would pollution be a non cost factor in people’s lives.
If there is air pollution in your area, it doesn’t cost you anything with a government healthcare system.
Can you imagine the lawsuits that would be filed if there was a leak of toxic materials into the atmosphere and private companies are having to pick up the tab for treatment?
It would not just be the private individuals suing for compensation, the healthcare providers would also be suing the polluting company to cover their costs.
At the moment there is no social cost to pollution of the environment. As soon as you put a dollar price on pollution the whole issue becomes infinitely more serious.
Food companies who cause outbreaks of food poisoning, business which put harmful chemicals into the food chain from sea pollution, to the use of hazardous materials in the rearing of animals and crops.
All these companies get a slap on the wrist at the moment and the taxpayer ends up picking up the huge medical costs.
With a private healthcare system all this would stop. All of a sudden you have everybody taking the quality of their environment much more seriously.
No longer will it be acceptable to smell something funny in the air now again and think nothing of it. People are going to be asking what exactly is causing it and does it pose a health risk in the short and long-term.
A government healthcare system is taking away your responsibility for your own body. A “free” healthcare system is akin to treating your body like a hire care, someone else’s property.
With a leased car you no longer have to pay for maintenance, insurance and repairs. You are totally detached from the cost of ownership so you longer as much as you would if it was yours. When the government does the same to your body they effect is the same whether you realise it or not.
I think everyone would agree that keeping your body in tip-top condition is much more expensive, complicated and time-consuming than keeping a car in tip-top condition.
Yet which do you find yourself think about most at the moment, as a UK citizen. Keeping your car in tip-top condition or your body?
And then we get onto the profit motive.
The mainstream media loves to put people on the TV saying how putting a price on healthcare is immoral.
Ignoring the immorality of giving businesses a pass for pollution and the immorality of the costs of reckless behaviour being passed onto responsible people.
Saying profit should not be part of healthcare is like saying healthcare should be free.
In a perfect world maybe it should be but the fact of the matter is that healthcare costs money.
To run a healthcare system takes skilled staff and it takes resources. This is the same whether it is government-run or privately run.
But private healthcare companies will have a margin the government does not. Private healthcare will be more expensive!
Which takes me back to the start of the article.
The fact of the matter is privately run health care offers a better service and is cheaper than government-run healthcare.
The fact of the matter is the profit motive makes things cheaper not more expensive.
In my mind the phasing out of the NHS while in parallel reducing the tax bill on businesses and citizens by 17% is by far the best solution.
In fact it is an absolute no-brainer.
Less cost, better service. The facts speak for themselves.
Those are my thoughts, I would love to hear yours.
well, no health care is the cheapest solution. just let everyone die. screw’m if they can’t afford it. ???
you are saying let people die, I am not.
neither was I. a poor attempt at sarcasm on my part 🙂
I understood the sarcasm. Follow my comments on another thread and you will see i4wales unable to answer various HC questions on the cost for private healthcare posed by another youtuber. He quotes £740, painting it as decent coverage, but then reveals when pressed it’s very basic. He then doubles the price saying it;s all singing and dancing. Then it turns out it doesn’t include many NHS provided services. Hole the size of planets in his arguaments.
You could not be more wrong.
Private health insurance in the UK is less than an average person pays in tax for NHS funding because the NHS covers most medical services. Private insurance is only supplementary to the NHS.
What private health insurance would cost if there was no NHS would be much higher.
Only ture comparison between private and government healthcare systems can be made by comparing costs and health outcomes in the US and UK.
US is predominantly private healthcare.
UK is predominantly NHS healthcare.
Look at the official OECD figures.
http://www.oecd.org/document/60/0,3746,en_2649_33929_2085200_1_1_1_1,00.html
US spends $8233 per person in 2010 on healthcare. Life expectancy in US is 78.7 years. Infant mortality is 6.2 deaths per 1000 births.
UK spends $3433 per person in 2010 on healthcare. Life expectancy in UK is 80.4 years. Infant mortality is 4.7 deaths per 1000 births.
Children are more likely to survive in the UK. People live longer in the UK and yet the UK spends only 42% what the US spends on healthcare.
A private systems costs double what the NHS costs and yet health outcomes are worse.
Hi, your comment was directed at me? If so, thanks for the figures. I think I said before you cannot compare a private system with the US because there is so much government involvement in the USA. ie it is not predominantly private in the USA.
23% of government expenditure is healthcare related in the US or 835 billion dollars, or 2385 dollars per person. http://en.wikipedia.org/wiki/United_States_federal_budget
That is why I compare UK private healthcare with UK NHS healthcare.
I think it has to be acknowledged that there is at least a chance private healthcare could be cheaper the public healthcare which is why I say it is at least worth giving people the choice of opting out of contributing to the NHS if they want. (The figures you provide show even more spending per person on the NHS than mine.)
And by all means, only allow those people earning less than a set amount opt out to being with.
At least give the least wealthy people in society the choice, I think it is only fair.
independence4wales.You could not be more wrong.A true comparison for private vs NHS systems comes by comparing US and UK healthcare.US spends $8233 per person each year on healthcare. Life expectancy is 78.7 years. Infant mortality is 6.2 deaths per 1000.UK spends $3433 per person each year on healthcare. Life expectancy is 80.4 years. Infant mortality is 4.7 deaths per 1000.
The figures I quote below are taken from the Organisation for Economic Co-operation and Development statistics on healthcare.
The problem with your calculations are that you fail to realise that if you opt out of the NHS system your private insurance premium would be much higher than your rather simplistic calculation allows.
Private healthcare in the UK as it exists at the moment cannot cover all medical eventualities because private healthcare only considers access to private hospitals and facilities that have offer a very limit range of medical services. The more expensive and complex procedures are only performed in NHS hospitals. Effectively the existence of the NHS subsidizes private healthcare industry allowing them to only take on the more cost effective procedures/treatments.
I think there is some merit in what you are saying about giving people the freedom to choose but the calculations you provide as evidence suggesting private healthcare is much cheaper than NHS is based on a false premise.
That is why I feel that a comparison with the US is a more accurate guide for what a premium would be if you gave up access to the NHS altogether. The insurance company would have much greater risk than they currently do and therefore would have to charge you a much higher price. Of course I don’t know what price that would be but in the US where the private healthcare industry only insures people below 65 (i.e. the relatively low risk subset of the population in terms of healthcare costs), they charge double what the NHS charges.
Hi, about private companies using the NHS, I dont know the details but it sounds wrong, I hope the NHS charges the private companies for their services.
But like you said, I think people should at least be given the choice.
I stand by what I say about the US being a bad example. I think everyone agrees it is a basket case. Using the UK is a much better comparison because of the lack of government involvement in private healthcare. For example you have the US government paying for a quarter of all healthcare costs, using the figures above, and yet the federal government does not own any hospitals. That is a recipe for gouging which is why I think the US is not a valid comparison.
If I can take it one step further, all evidence shows the lower you are on the economic ladder the more appealing you are to business, in other words, there is more competition and that always leads to lower costs and better service. To give some real world examples, Toyota, Walmart, Asda, Tesco, Ryanair. All evidence real world evidence shows that when you have a free market in an industry that is catering for the lower rungs, competition is immense, prices are low, quality is high because there is so much more money to be made compared to catering for millionaires.
For example Bill Gates, one guy controlling billions, there is only so much he can spend on looking after his health, but a million people earning less than 20K will spend multiples more on healthcare than Gates which is why the highest competition is in providing for the little guy. If you see where I am going.
The lower you are on the economic ladder, the better you are catered for by the free market because there is so much more money to be made due to volume.
If you have any examples of a free market where the less money you have, the worse you the service you are provided with on a bang-for-buck basis please let me know. Specifically, worse bang-for-buck compared to the same type of service catering for a millionaire. If I am making any sense?
personally, I don’t care if it’s more expensive. if it pays for all that’s a better deal.