Exploring the Economic Impact of NHS Privatisation in the UK Economy

This essay examines the potential economic impact of privatising the National Health Service (NHS) in the UK. It begins by outlining the NHS's structure and funding, highlighting its reliance on public taxation and the potential effects of privatisation. The analysis considers arguments for and against privatisation, including improved efficiency, increased revenue, and heightened competition, while also addressing concerns about potential exploitation and reduced service quality. Examples from the financial services and automotive industries are used to illustrate the broader economic implications, particularly in the context of Brexit and medical tourism. The essay further compares arguments from individuals supporting each side of the debate, reflecting on how the research has shaped the author's perspective and concludes that the NHS must remain a public organization despite the pressures.

NHS PRIVATISATION
1

Table of Contents
INTRODUCTION................................................................................................................................3
EXPLAIN THE POSSIBLE IMPACT ON THE UK ECONOMY IF THE NHS WAS PRIVATISED. USE
EXAMPLES DRAWN FROM TWO INDUSTRIAL SECTORS TO ILLUSTRATE YOUR ARGUMENT..........4
USING THE ARGUMENTS OF THREE INDIVIDUALS SUPPORTING EACH SIDE OF THE
PRIVATIZATION ARGUMENT COMPARE THE TWO SIDES OF THE DEBATE.....................................7
REFLECT ON YOUR INITIAL VIEW OF THE PRIVATISATION ARGUMENT AND THEN CONSIDER
HOW YOUR POSITION HAS OR HAS NOT ALTERED IN THE LIGHT OF THE RESEARCH YOU HAVE
UNDERTAKEN...................................................................................................................................9
CONCLUSION.................................................................................................................................10
REFERENCES...................................................................................................................................11
2

INTRODUCTION
In the UK, the scale of the growth in the healthcare is quite evident. The attention to the needs
of the people is paid more attention to the increase in the value for money. It is heavily
explored that a comparable quality and safety to NHS services and patients are impacted with
the thought of organization getting private. Nevertheless, privatization is still an important
challenging factor which impacts on the delivery of the healthcare services of the National
Health services and other organization in the UK and Britain. The study focus on the impact of
the NHS turning to private possibly indulges with the economy of the UK. Further, supporting
arguments and reflection to consolidate the research is formulated in the assessment.
3

EXPLAIN THE POSSIBLE IMPACT ON THE UK ECONOMY IF THE NHS WAS
PRIVATISED. USE EXAMPLES DRAWN FROM TWO INDUSTRIAL SECTORS
TO ILLUSTRATE YOUR ARGUMENT
National Health Service (NHS) is publicly funded organization which provides the general
taxation of the system and overseen by the Department of Health. The organization was
established in the year 1948 with the intention to provide the free healthcare to the people
that are belonging to the lower category. Even the legitimately registered their system to be
available to legal UK residents regardless of nationality.
The NHS provides the majority of healthcare in England and involves the in-patient care,
primary care, ophthalmology, long-term healthcare and dentistry. The NHS is largely funded
from the amount of the tax which is generated by the National Insurance. The UK government
is responsible for the Handling the departments of Health of the NHS, It has been estimated
that the UK government had invested around £110 billion amount to the NHS (Tejvan Pettinger,
2017). Henceforth, the UK economy can be affected if any imbalance occurred in the practices
of the NHS.
The term privatization is not an easy concept as it might occur. There is lack of consensus as
constitutes of privatization in practice are approached. In case of NHS, the privatization is a
provision to handle patients belonging to the independent sector. The impact of the Brexit can
be foreseen as the Britain elections referendum has affected the policies of the National Health
services. The NHS relies on the sources of the private sector to a larger extent. It has been
statistically presented that around 6% of their budget is provided or funded by the private
providers. In the past, the conservative and Liberal Democratic parties both have signed up to
and has broadly hinted towards the privatization of the NHS in the coming years.
The possible problems that can be encountered with the privatization of the NHS on the UK
economy are the matter to be argued. Through privatization selling state and business trends
are highly affected as profit motive to run a business is decentralized (Hunt and Wheeler, 2017).
The critics to exploit the monopoly power and ignoring wider social costs can help in improving
4

the efficiency of the organization. However, the governments run industry do not share any
profits. If NHS turns to be private organization than they have a profit incentive to cut costs and
can become more efficient. The lack of the political interference can, however, improve the
economy of the UK. It has been foreseen that the government are somehow responsible for
making a poor economic decision. Therefore, it is reluctant to say that the government can
negatively publicize the organization and result in the loss of the job for many employees.
NHS as the public organization look for the short term views which reliable with the
government thinking. Therefore, they may unwillingly invest in the infrastructure improvement
and gain the long-term benefit for the organization. However, it has been recorded by Care
Quality Commission (CQC) that the shareholders of the organization are inefficiently utilizing
the facilities of the private resources and create the pressure from the shareholder's end to
gain more money. The increased competition has allowed the firms to enter into the private
sector as the natural monopoly can influence the economy of the country. The privatization
does not necessarily increase the level of competition until the nature of the market gets
change.
In terms of the financial services, the NHS plays a totemic role in the life of the British public. It
has been utterly founded that the EU referendum has created a trouble for the NHS and the
health services (Green and Thorogood, 2016). The issue of the funding was not only the
concern of the organization but it has along impact on the employment of the people. The UK
has long had a huge dependency on the nurses, doctors and other staff which was affected and
economy of the faced many pitfalls due to it. With this change in the policies and regulations
due to exit from Brexit had however increased the cost of the treatment but on the other hand,
diminished the quality of the services.
The financial crisis of the organization concern with the healthcare sector can concerns with the
EU decisions about the NHS which can henceforth, lead to privatization. However, Leaving EU
can help in proper functioning of the organization. It has been experienced that NHS generates
the major source of income through Medical tourism (Briant and Harkins, 2017). It can be
5

recorded that the people leave the UK in search of getting proper medical treatment as it has
considerably demolished the quality of the care.
Medical tourism is the phenomenon through which people travel abroad in search of gaining
access to the treatment facilities. The inbound and outbound travel due to tourism will be
affected in case NHS turned into a private organization. A mixed ration has been estimated as
the volume of the medical tourism and business associated with it creates huge cost and
benefit for the people. It has been found that the net importers of the patients in the UK are
NHS free treatment policies. It has been estimated that around 63,000 UK residents rely on the
facilities of the medical tourism (Tunney and Thomas, 2015). The inbound medical tourist in
NHS is treated under the private facilities which are profitable for the business. The cost arises
of the patients travel to abroad and returning with the complications is likely to serve with the
GDP of the UK. Thus, it can result in an impact on the medical tourism and universal public
health system which in turn minimize the economy of the country.
The UK is expected to have a loss of around 10500 finance jobs by the end of the year 2017. The
Article 50 of the Brexit has provided the remarkable threats to the business as the matter of
concern. The automobile industry has utterly demoralized by leaving the EU. It has reversed the
progress made in past decades. NHS providers and commissioners are facing unprecedented
financial pressure due to rigorous spending in the area. NHS healthcare has radically faced the
phase of getting private (Radic, 2016). By privatization, it strictly means that the permanent
transferring of the goods or services with the productivity which was preliminary carried out by
the public services will face the bureaucracy of private firms or to other forms such as non-
public organization i.e. Voluntary groups. In the year 1948, the establishment of the National
Health Service and other Insurance system was encountered which set the base for
safeguarding the health of the citizens. It can be particularly reliable for the people those with
the socio-economic needs. They can gain the benefits in the form of grants or pension or any
other means.
6

USING THE ARGUMENTS OF THREE INDIVIDUALS SUPPORTING EACH
SIDE OF THE PRIVATIZATION ARGUMENT COMPARE THE TWO SIDES OF
THE DEBATE
The supporting arguments that are focused are:
 Improving Efficiency
 An increase in revenue from the sale
 Increased Competition
It is aforementioned that the privatization would just create a natural monopoly and increase
the efficiency of the business. But on the other hand, it can exploit the consumers and which
might seek due to higher prices. The public monopoly is better as to maintain the consumer
base and economy of the country (Briant and Harkins, 2017). It can also be foreseen that there
are many other industries than NHS who perform public health service. The motive behind
depending on the public monopoly can bring about profit rather than set the primary objective
of firms and industry. It can be argued that there are many private organizations which are
quite profitable for the UK economy. But it also requires sharing their wealth with the other
shareholders and government in the case. The British Medical Association believes that the NHS
should prefer the resource provider of enhancing the NHS services and increase the revenue
from the sale of the appropriate procurement process.
It can include the ability to appoint a specific purpose. With the privatization, the increase in
the number of the private case of the NHS work can currently be advertised to around £5.8bn
i.e. 14% increase in the year (Briant and Harkins, 2017). With the increase in the competition
level of the medical tourism business, the financial crisis had occurred in the year 2009 for the
NHS as the part of the radical change in the business. The care quality commission gives can
provide the theoretical possibilities of the NHS converting into private. Unlike other business, it
does not require to raise their money through sales. The NHS is linked up in the topmost giant
service organization to pay tax and can create the economy but with the support the political
means.
7

However, NHS funding measures are rising day by day and the health spending has gone up to
0.8 percent each year by generating the inflation rate. The government can either make a clear
permit to the working atmosphere of the NHS by allowing the thousands of nurse’s recruitment
every year. The private sector which includes hiring and output is expected to fall from 56.7 to
57.3 in the prior month as per the report of the analyst (Tejvan Pettinger, 2017).
The automotive sector of the UK has no deal with the Brexit and cost of the motors was
bifurcated with additional £4.5bn in tariffs. It has been argued that the EU membership has
reduced the value of the UK economy and the GDP which is measured is about 13%. The
contribution of the UK has possibly cost them 2% of the GDP (Radic, 2016). Thus, it has an
impact on the UK economy badly.
Many estimates are recorded with the implications for the NHS as the inward and outward in
the terms of the Tourism industry. The possible income streams that are coming from medical
tourism have exaggerated the possible way of enhancing the revenue generation of the NHS.
The estimated value of the travel for medical care to and from other Countries to NHS is
calculated as US $491M (Tunney and Thomas, 2015). It has been focused that the cost incurred
or averted by the NHS can provide the direct assistance to the facilities that are provided.
The economic contribution of the medical travellers to the UK has generated a net benefit to
the economy of the UK. Based on the Hospital treatment facilities the expenditure to visit tthe
places is adding the benefit and various opportunities to the business. Therefore, it can be
concluded that NHS must remain public organization by facing a different pressure whether it is
tourism inbound and outbound or due to the financial services that are offered by them in term
of free treatment.
8

REFLECT ON YOUR INITIAL VIEW OF THE PRIVATISATION ARGUMENT
AND THEN CONSIDER HOW YOUR POSITION HAS OR HAS NOT ALTERED
IN THE LIGHT OF THE RESEARCH YOU HAVE UNDERTAKEN
As the survey conducted the opinion as the Doctor on the privatization has resulted that more
than two third of the doctors are fairly in support of NHS privatization. However, there are
common reasons due to which the concern for the health and services are undertaken. One of
the reasons is the destabilization of the NHS services. It can be closely observed that the
fragmentation of the services has reduced the pressure on NHS as the demand for their
healthcare in high (Tunney and Thomas, 2015). The other choice with the people choosing the
standards of the NHS for their facility is that the government appropriate rules and policies are
implemented so that the quality standards are not minimized. It is also monitored that the
opinion of the doctors can indicate a number of reasons for privatization of the NHS healthcare.
The funding for independent acute medical requirements is protected with the help of the
financial cost and protection of the healthcare services.
The NHS must remain public-oriented organization as there are still some people those cannot
afford for paying the medications or other care facilities that are essential for them. It is highly
recommended that the unprecedented financial pressure can be paid lease attention
comparable to the quality and safety of the NHS healthcare (Green and Thorogood, 2016). The
data on levels of provision made by the NHS services can no longer picture the other services by
the sectors aforementioned. With privatization, the destabilization and disruptions in the
services cannot affect in the pathway of the patient safety and health along with the economy
of the UK.
9

CONCLUSION
The report presents a clear understanding of the possible impact of the privatization of the
NHS. Further, the involvement of the different sector i.e. Tourism, Financial Services and
Automobile is preferably discussed in the study. Henceforth, it can be concluded that NHS is
relying on some sources which are preferred by the private sector industries and still manages
to be under the provision of government. This can add advantage to their business but
significantly can be disastrous in terms of generating revenue for the different target segments.
High-end people can afford such facilities can help in improving the financial conditions which
in turn increase GDP and economy of the UK.
10

REFERENCES
Briant, E.L. and Harkins, S., 2017. 5 Managing the social impacts of austerity Britain. Cultural
Politics in the Age of Austerity, p.93.
Green, J. and Thorogood, N., 2016. Analysing health policy: a sociological approach. Routledge.
Hodge, G., 2018. Privatization: An international review of performance. Routledge.
Hunt, A. and Wheeler, B., 2017. Brexit: All you need to know about the UK leaving the EU. BBC
News, 25.
Radic, M., 2016, April. The Effect of Privatization on Organizational Identity and Culture. In
International OFEL Conference on Governance, Management and Entrepreneurship (p. 823).
Centar za istrazivanje i razvoj upravljanja doo.
Tejvan Pettinger., 2017, May. Advantages and problems of privatization.(Online available at
https://www.economicshelp.org/blog/501/economics/advantages-of-privatisation/, last
accessed on 21st April 2018)
Tunney, S. and Thomas, J., 2015. Public access to NHS financial information: From a freedom of
information regime to full open-book governance?. Social Theory & Health, 13(2), pp.116-140.
11