Replace NHS with social health insurance system, think-tank says

A think-tank has called for the NHS to be replaced with a market-based social health insurance (SHI) system.

(c) Nicolas J Leclerq/Unsplash

(c) Nicolas J Leclerq/Unsplash

The Institute of Economic Affairs (IEA) report, which cites growing public dissatisfaction with the NHS, said the adoption of a European style SHI system would boost the UK's lagging healthcare outcomes.

Dr Kristian Niemietz, report author and IEA editorial director, said: ‘Until not even three years ago, the NHS used to be Britain's most revered sacred cow, and criticising it was the ultimate social taboo. Now, three out of ten people say openly that some of the continental European health systems deliver better-quality healthcare than the NHS does.'

The report cites a YouGov poll showing Britons are now increasingly likely to say the NHS is worse than European healthcare systems, with 29% saying it's worse (+18 since April 2021), and only 20% saying it as better (-22).

The IEA argues the UK is underperforming Western Europe countries on almost all parameters, with the second highest avoidable mortality rate, among the lowest cancer survival rates and longer waiting times.

The report suggests replacing the NHS with an SHI system by:

  • turning ICBs into non-profit statutory health insurers
  • replacing healthcare funding through taxation with health insurance contributions
  • NICE defining a statutory minimum package for health services that all health insurers have to cover
  • setting up a risk-structure compensation scheme
  • introducing free choice of health insurers to create a health insurance market
  • turning hospitals and other healthcare providers into freestanding independent companies
  • removing the cap on the number of medical students and introducing a market-based approach to medical education
  • phasing out national pay scales and introducing a free medical labour market.

Matthew Taylor, chief executive of the NHS Confederation, said: ‘Switching to a social health insurance or other alternative funding model for the NHS is a misguided argument that many independent think-tanks have concluded will make no difference to health outcomes. If anything, it's a distraction when what really matters is the level of investment rather than the model of funding.'

Taylor cited research carried out by Ipsos on behalf of the NHS Confederation showing a high level of support for the founding principles of the NHS, with 87% agreeing it should provide a comprehensive service available to and remain free at the point of delivery, as well as being funded primarily via taxation (83%).

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