Privatization's Appropriateness as Policy in Times of Austerity

This report examines the concept of privatization as a response to austerity measures, focusing on its implications within the healthcare sector, particularly in the UK and the US. It defines privatization as the transfer of services from the public to the private sector and austerity as government efforts to reduce public expenditure. The report argues the effects of privatization, including increased competition, potential cost reductions, and the potential for improved services. It also discusses the counterarguments, such as concerns about the quality of services, the prioritization of profit over patient care, and the impact on access to healthcare. The report analyzes the NHS in the UK and the US healthcare system as case studies, highlighting the challenges and successes of privatization in these contexts. The report concludes that privatization is a complex issue with both potential benefits and significant drawbacks, and that its appropriateness depends on various factors, including the specific context, the nature of the services, and the priorities of policymakers. It emphasizes the need for careful consideration of the potential impacts on quality, access, and equity when implementing privatization policies. The report draws on the insights from various sources to provide a comprehensive overview of the topic.

Privatization is an appropriate Policy
response in a time of Austerity

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
INTRO CONCEPTS........................................................................................................................3
ARGUMENT 1................................................................................................................................4
ARGUMENT 2................................................................................................................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Privatization can be defined as a process in which one firm or organization can transfer or
shift from public sector to private sector. All the services which are running by the government
come under public sector. The other services which are owned by the individual person, comes
under private sector organization. The government do not have any control on private sector
organization. Nowadays, privatization is occurring majorly in developing countries and some
developed countries are already shifting from the public sector to private sector. This is because
privatization maintains proper competition in the market which leads to better services, low cost
and less corruption (Hall, Miller and Millar, 2016). At the same time, most people think that the
services like health and social care, law enforcement, education; they should remain in public
sector so that the government will have more control and more access over it. Austerity is the
term which is related to privatization. It is the difficulties and which are created by the
government to reduce the expenditure of the public sector.
INTRO CONCEPTS
Austerity: This can be defined as those conditions which are particularly created by the
government, so that they can reduce the public expenditure. In most of the countries, these type
of measures generally develop the unemployment, and it will reduce the jobs in public sectoer as
well as in private sector.
Nature of Austerity
The overhead costs of management and their administration is more than doubled
on NHS and it is generating 14-15% of turnover but still growing as the market is closing,
despite being short of levels of US bureaucracy.
USA is the only developed country which thinks the health and care services are to make
profit from patients not as a welfare services. The best and the efficient part of USA health and
social care system is that government is paying for the medical treatment of the people who are
65 years old or over that.

There was a rumour that NHS is very close to financial collapse (Richards, 2013). There
was a continuous state of crisis in terms of health and social care funding that resulted in
decrease in the quality of services and which caused the industry to move towards privatisation.
In UK, all the health and care services are a little more expensive as compare to other nations
(Windebank and Whitworth, 2014). In USA the health and social care services are distributed not
according to the market or patient need, but it is more according to the ability of pay. So those
people who are in the greatest need will be the ones who are paying least. Though, the market in
USA is good but when it comes to health and social services, it is not the same (Powell, 2016).
Privatization: It can be referred as the transfer of a particular business, industry or other
services from public enterprises to private enterprises.
ARGUMENT 1
NHS management is more than outweighed due to the external work which was taken by
the management, this is because of privatization. They are now charging way too much money
for even the smallest of works, but it is safe to say that there is no enough scrutiny of quality of
work done by NHS. This all money is in excess but it is all wasted, and the pressure on NHS
funding is decreasing which will freeze in real terms in the coming years. In UK, all the citizens
know that it is well publicized failure, but despite this NHS remains hugely popular and this is
the main problem for the privatization including the utilities in the public sector which are sold
by the government (Klein, 2015).
This is the program which is the single one based on the private sector where government
is paying the money. But the people who are below the age of 65 gets tax free health from their
employers. The employers select the plan and the best insurance company, and that pay gets
deducted from the salary of the employee in the smallest portion possible. But this also done for
the profit, as they try to keep the premium down, profit up by sparing on the health and care
services. Thus, taking all these measures into account one can say that private companies and
health care organizations are hard to trust, in health industry. One of the most influencing factor
in the health and care services that is, patient like to treat early and in the effective manner
(Weiss, 2015).
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ARGUMENT 2
The main problem with the private service providers is that they win the bids on the loss
leaders like NHS, but they wind up carrying losses. They can prevent this by mixing up the
workers of different departments or by reducing the cost of quality. There was a report which
suggests that all investor, who invested money in NHS are now withdrawing their money
because they are now facing heavy losses due to financial crisis (Matthew, 2016). NHS in UK is
doing a tremendous job in providing the facilities to the people and that too free of cost, and it is
a well-known organization so it is having people's trust, so privatization is a failure in UK, but in
US people need to earn maximum profit from health and care services, so privatization is
working there very well.
Discussion
Tony Blair's labour rule was negotiated with other private firms, which was funded by
the NHS subsidies This was having a higher payment per patient than the payment of current
NHS. There, the private sector hospitals and health care services are looking for generating more
profit from the patients rather than treating them well. But due to austerity, the costs are much
higher, because to shift a system or organization which is very old, universal and unified system,
which was having all the resources at their level. They are provided with care services in the
public sector too much complex and disunited system. They want more customers but only those
who can pay, this is a major drawback for having private sector health care services. The money
which the private sector will get would not be able to give the quality of health and services as
the public sector would give.
There are different packages of care that are opened up for the bids on the local level
from different providers which carries a huge amount of money. These bureaucracies and
amount of money have diverted many NHS employees from their main task of serving the
patients and taking care of them. The new service providers which are private in many cases
have failed to fulfil the services and are not able to solve the problem in the specified time
(Hughes, 2016).
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The reputation of NHS is also facing damage and providing health care services have
becoming very challenging for the public sector. N The private sector is not risking to covert the
privatization of the entire NHS organization, but they are just picking the services that they can
provide the best, because due to the financial conditions, the public sector have to cope up with
all the rest. All the bills in NHS will be paid by the taxpayers' money, so they don't have to worry
about if the patient can pay the bill or not. In UK, privatization in health and social care is a huge
failure.
NHS can deal with the cases of emergencies, very complex and costly treatment and
many other services which are not taken by the private sector in any of the country. Private
sector is not the sector who will do research on general welfare. Their staffs are not trained in
England. They will always be dependent on recruiting services of NHS so that they can provide
trained nurses and doctors.
It is a subject matter that all the private sector professionals and the expertise are
confined to work in the small private hospitals, which are having 50 beds only. But they are
dealing with the patients who are very exclusive and very elective but they only need some
minor treatment. If any complication occurs and some emergency arrives then they have to call
NHS ambulance and sent that patient to NHS hospital whichever is the nearest one (Marshall and
Bindman, 2016).
Austerity is much more complex than it looks like; it is like giving money from poor to
richer. In UK, a normal person is earning still less after inflation than the person was earning
when financial crisis happened. The general hospitals which are private they do not have the full
medical staff and they will always take NHS's specialized professionals to do specific treatment.
Another thing is about the profit and non-profit business in USA. To generate more
profit, the health care services are always more expensive, and the quality of the services are
low. And there is no such thing called no-profit system. The same private sector will give the
same services and that to on the lower cost but they will still generate profit form that. Overall
Privatization is not a good system as there are many drawbacks for having a private health care
system like the services will get worse, this means that to generate more profit from the patients
they will provide low quality services and will generate profit from that.
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USA demonstrates that private health care services are more expensive, less effective and
very less efficient, at the same time it also shows that private sector brings fraud, obstacles and
problems to the system. But USA spends almost 18% of their GDP on the services of health and
social care but still more than 20 million Americans remain under-insured. To control the US
system is literally not possible, because if they expand the coverage, then cost rises, and if they
control the costs, the coverage shrinks. Privatization should be necessary or not, this is totally
depended on the fact that what kind of facilities people want and will they be able to pay it the
prices related to the services.
Another thing is the costs of the services that may go up, because of the same reason, to
maximize the profit (Geyman, 2015). The stakeholders who are investing money in private firms,
they want more profit so the health care organization will increase the money of the services.
Other major thing is that private companies are not accountable, these organizations will not care
about the patients apart from the money, so it will take more time to trust these private
organizations. The staff in private sectors are not very experienced as they hire the staff on low
wages so they are not professional (Gaffney, 2015). In USA the main thing which troubles
people more is not the amount of money which spends on the health care services but it is level
of public spending which hurts more. It is also depended on the waiting list which will occur
when the private sector will give more facilities. But this is only for those people who are well-
insured, they will not have to wait more, but the other people around 46 million in USA, they
might have to wait for the rest of their lives in getting a transplant. Privatization will take off the
resources and other assets, and the public sector will become empty, but the main concern will be
about the money that will be demanded by the private sector health and social care services in
USA.
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CONCLUSION
From this report it has been concluded that USA Medicare system is not the perfect one,
it has many faults like some out-of-pocket cost for the medical services because of its
privatization. They will include the business profit maximizing hospitals, professional doctors
who will charge more, that's why the inflation system is unsustainable in private sector. In UK,
The private sector is completely over shadowed by public sector because they could not function
properly without NHS.The main priority is safety of the patient. This is not possible when the
private sector is involved in that because it is money driven and they will look for profit without
giving quality services to the patients, so it is advisable to keep health and social care services
with NHS and in public sector.
..
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REFERENCES
Books and Journals
Gaffney, A., 2015. The neoliberal turn in American health care. International Journal of Health
Services. 45(1). pp.33-52.
Geyman, J.P., 2015. A five-year assessment of the affordable care act: market forces still trump
the common good in US Health care. International Journal of Health Services. 45(2).
pp.209-225.
Hall, K., Miller, R. and Millar, R., 2016. Public, private or neither? Analysing the publicness of
health care social enterprises. Public Management Review. 18(4). pp.539-557.
Hughes, D., 2016. UK-wide health policy under the Coalition. Dismantling the NHS?:
Evaluating the Impact of Health Reforms. p.125.
Klein, R., 2015. England's National Health Service—Broke but Not Broken. Milbank Quarterly.
93(3). pp.455-458.
Marshall, M. and Bindman, A.B., 2016. The Role of Government in Health Care Reform in the
United States and England. JAMA internal medicine. 176(1). pp.9-10.
Powell, M., 2016. Reforming a Health Care System in a Big Way? The Case of Change in the
British NHS. Social Policy & Administration. 50(2). pp.183-200.
Weiss, D., 2015. Privatization and Its Discontents: The Troubling Record of Privatized Prison
Health Care. U. Colo. L. Rev. 86. p.725.
Windebank, J. and Whitworth, A., 2014. Social welfare and the ethics of austerity in Europe:
justice, ideology and equality.
Online
Matthew, T., 2016. Surge in privatisation threatening free NHS treatment, unions say. [Online].
Available Through :<https://www.theguardian.com/society/2016/feb/08/surge-in-
privatisation-threatening-free-nhs-treatment-unions-say>. [Accessed on 9th May, 2017].
Richards, S., 2013. The government is trying to privatise the NHS through back door regulations.
[Online]. Available Through
:<https://www.theguardian.com/healthcare-network/2013/mar/05/nhs-reforms-
government-privatise>. [Accessed on 9th May, 2017].
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