Health of people in UK would be better without the NHS, says IEA research

New paper calls Britain's healthcare system 'historic mistake'

An NHS hospital in London. Alamy

The health of people the UK would be considerably better if the NHS had never been created, according to new research.

Premature deaths from cancer and other diseases are considerably lower in Australia compared with the UK, according to a paper by the Institute of Economic Affairs (IEA), titled The Wizards of Oz?

If the UK matched Australia’s survival rates — or even met them halfway — thousands of additional lives would be saved each year, it says.

In the 1940s, the UK and Australia had similar healthcare systems. The UK then created the NHS while Australia introduced gradual reforms to its existing model. The latter now has a superior system with substantially better outcomes, the paper says.

Cancer survival rates are several percentage points higher, while heart attack and stoke mortality rates are several percentage points lower, equating to thousands of lives.

Total healthcare spending is lower in Australia and it has been for nearly two decades. In 2019, it stood at 9.3 per cent of GDP, compared to 10.3 per cent in the UK.

While the Australian system has many flaws, the paper suggests it can teach the UK to be more relaxed about the benefits of private sector involvement in healthcare delivery, private insurance and decentralisation.

The paper does not suggest that there is one perfect type of healthcare system, nor that the Australian model is one for the UK to replicate, given it has problems of its own.

The paper does point out, however, that the NHS appears to have a lead when it comes to avoidable hospital admission rates for chronic conditions.

Waiting lists at public hospitals can be fairly long, and hospital admission rates for people with chronic conditions tend to be higher than in the UK, which suggests weaknesses in co-ordination and chronic care.

Dr Kristian Niemietz, IEA head of Political Economy and author of Wizards of Oz?, said: “The Australian healthcare system is perhaps the closest thing to a realistic counterfactual for how health care in Britain might have evolved if the NHS had never been created.

“On a whole range of measures, that counterfactual looks a lot more attractive than what we actually have. It is therefore not implausible to draw the conclusion that the creation of the NHS was a historic mistake and that Britain would have been better off without it.”

Some key takeaways from the paper are that ideas of tax rebates for private health insurance (PHI) and community rating in PHI are certainly worth looking into, as is the generally more decentralised nature of the Australian system.

The paper suggests that the conclusion to be drawn from the study is not “ditch the NHS, and adopt the Australian system instead”, but rather that the UK should not shy away from learning from international best practices.