The perverse incentives created by privatisation are perfectly demonstrated by the structure that now exists in Health Care in Britain. There are effectively five options for members of the British population.
1) The NHS - Anybody who has had any reason to deal on a serious level with the NHS recently will understand that the system simply isn't working despite the best efforts of many of the practitioners and staff. The GPs act as guardians to a system of hospital care that costs money to perform so the economic incentive is for GPs to act as strict gatekeepers to restrict the flow of people to the hospitals. Furthermore, as I found out to my cost a couple of years ago, government hoops cause the hospital authorities to creatively doctor the waiting lists so that their targets are seen to be realised.
2) Private Healthcare Scheme (PHCS) - Paying ahead for supposedly preferential health care is also a no-no and the reasons are, once again, based on economic incentives. If an individual or family pays in advance to cover the risk of future treatment, the incentive exists within the PHCS world to limit such treatment once required in order to enhance the cash flow of the PHCS operators. This distortion of incentives is typical of other insurance-based structures eg the utilities offering protection against the highly unlikely event with a multi-loopholed contract or, indeed, the insurance industry itself.
3) One-Off Private Healthcare (PHC) - In this situation, one awaits illness or injury with dread. When such an eventuality arrives, you drag yourself and your cheque book to a PHC provider and, in a one-sided negotiation (due to your paramount needs), you are fleeced in order to get suitable treatment. A further perversity of this choice is that you are actually likely to get better (and more expensive) treatment to enhance the PHC's bottom line. A huge downside is that it is in the interests of the PHC to persuade the patient to receive unnecessary treatment - think dentists! A similar structure exists with car mechanics where the company desires to get the maximum payment for a job without crossing the threshold that would prevent the customer returning in the future.
4) Healthcare Abroad - This is the best option although each country has it's own indecipherable and illogical structure. I now get all my healthcare provision in Greece but, if I am ever hospitalised, I must provide my own nursing and ancillary support.
5) Preventative Attitudes and Alternative Medicine - Living healthily and utilising supportive medical and wellbeing care (eg acupuncture, tai chi, meditation etc) is a necessary adjunct to limit the potential for dealing with any healthcare provider at any time.
In Britain, of course, the poor only have one option - the NHS. Dentistry was used by shareholder capitalism in Britain as an experiment to see how the sector adjusted to a private structure. It is now virtually impossible to be registered with dentists unless taking out a private contract.
There has been much hot air from the chattering classes about the formation of a two-tiered health system in the country. This is not the case. There is only one tier and that is private.
