Health Inequalities and Welfare State Regimes in the UK - Essay Example

 Health Inequalities and Welfare State Regimes in the UK The UK healthcare system is divided into public and private healthcare. The private healthcare system is provided by the private sector including private hospitals. Under the private healthcare system, patients pay for the costs incurred from their pockets or private insurance.. The public healthcare system, popularly referred to as the National Health Service (NHS), is larger compared to the private healthcare system. The public healthcare system caters for the larger population and is funded through public funds collected through taxation. As a result of this, private healthcare system is only a small part of the overall healthcare system in the country. Healthcare spending in the UK accounts for approximately 10 per cent of the GDP. In 2012, the healthcare expenditure was £144.5 billion, which represented 9.2 per cent of the GDP (Office for National Statistics, 2014). Over the recent past, public spending on healthcare has been increasing consistently. For instance, between 1997 and 2011, healthcare expenditure in the UK grew from £54.8 billion to £142.8 billion (Payne, 2013). The essay is structure into several sections. The first section provides the introduction to the essay and main subject of public health. The next section provides the economic justification for continued public health funding in the UK. the final section presents the rationale for reforming the current public heath system in the UK and gives specific reforms to be implemented including competitive tendering process. The conclusion part summarizes the justification for the reforms to the competitive tendering process as opposed to other available options. Public healthcare is provided for free at the point of use. Under the public healthcare, the UK citizens receive preventive, primary, and secondary healthcare services. At the primary care level, the UK citizens get healthcare services from General Practitioners who are self-employed or engaged through contract. Apart from the General Practitioners, primary healthcare is also provided by dentists, opticians, NHS walk-in centres, pharmacists, NHS Direct, and community health services. NHS also funds secondary healthcare. The secondary healthcare services are provided by salaried consultants (doctors), healthcare professionals, and nurses who are employed in government-owned hospitals (Boyle, 2011). The primary and secondary healthcare systems provide various healthcare services including dentistry, radiology, physiotherapy, pharmacy, psychiatry, diagnosis and treatment of various diseases and conditions among others. The public healthcare system in the UK serves a large population. Being the larger compared to the private healthcare sector, NHS serves a significantly higher portion of the UK population. The NHS caters for a population of 63.2 million people in the UK (National Health Service, 2013). This is a large number of people depending on the NHS. The demand for public healthcare in the UK has been growing over the years due to various factors such as population increase, a growing aging population, and proliferation of new diseases and health conditions. Based on this trend, it is highly likely that more people will depend on the NHS in the future. The NHS was established in 1946 after growing pressure from the public and other concerned entities regarding the disorganized nature of healthcare in the UK and the growing cost of healthcare. Therefore, the Labour government established the NHS as a response to the growing pressure. The primary objective for establishing the NHS was to enhance equitable access to healthcare through provision of free healthcare services at the point of delivery (Boyle, 2011). This objective was meant to ensure that the poor citizens could also access quality healthcare services just like the wealthy. Prior to the establishment of the NHS, there were inequalities in the provision and accessibility to healthcare services. This system favoured the rich people who could afford to access the best hospitals and services especially from the private sector. However, the poor people could not afford such healthcare services and ended up getting low quality healthcare. The public healthcare system in the UK was established as part of the social welfare policies. The UK is one of the welfare states that emerged in the 20th century. Inequalities in access to healthcare were one of the driving forces for the adoption of social welfare policies such as the NHS that sought to address these inequalities (Bambra et al., 2009; Eikemo et al., 2008). Therefore, the public healthcare system in the UK was aimed at reducing the inequalities in society related to accessibility to quality healthcare. This was part of the overall objective of the welfare states to reduce inequalities in society by addressing poverty through providing support to education, health, and other critical areas. Over the years, the core principles and objectives of the NHS have changed. These changes have been implemented to take into consideration new developments and trends. In 2010, the government came up with a new NHS constitution. The new NHS constitution contained seven key principles and core values of the NHS, which largely represent the objectives of the NHS. The seven key principles include: i. Provision of comprehensive healthcare services to all UK citizens ii. Aspiring to the highest standards of professionalism and excellence iii. Accountability to the public, patients, and communities served iv. Working across organizational boundaries and partnering with other organizations based on the interest of the patients, communities, and the public. v. Accessibility to the services offered by NHS is based on clinical need rather than ability to pay. vi. Commitment to provide best value for the tax collected from taxpayers and fair, effective, and sustainable use of the limited resources. vii. Healthcare services must reflect needs and preferences of the patients as well as their carers and families (Findlya, 2010). Therefore, the current public healthcare system in the UK, under the NHS constitution, reinforces the overall objective of providing equitable and affordable access to healthcare to all UK citizens. The government has a role to play in public health. According to Jochelson (2005), there is popular belief and support for government role in public health. The government should actively engage in public health to ensure that healthcare is accessible to all people irrespective of their income status, gender, and or social status. Access to proper healthcare is a universal human right under the universal health coverage (Sachs, 2012). Section 2: The Economic Case In Favour Of Continued Public Funding For Healthcare There is need for the sustenance of public funding for healthcare in the UK. So far, the public funding for healthcare under the NHS has achieved considerable success and major milestones have been achieved in the UK healthcare system. The adoption of NHS has greatly enhanced the quality of life of UK citizens. Unlike any other time in the history of the UK, UK citizens are enjoying healthier lives. The life expectancy in the country has increased significantly. Today, UK citizens can expect to live longer than at any other time in the past. This is all thanks to the adoption of public health funding (HM Government, 2010). Public health funding is concerned with the health of the entire population. Public health funding is concerned with service delivery to the population to ensure that the health of the entire population is ensured. According to Childress et al (2002: 170), the government is the main much of the finances for public health. However, the government only does so based on moral grounds that the public’s interest should be prioritized. According to Musgrove(1999: 208), public health funding is justified by two economic theories including the existence of market failures in health care programs as well as equity problems in accessing health services. The economic efficiency criteria focuses on the efficiency of health care provision. Apparently, the involvement of the state in provision of health care services is justified by the view that this intervention would reduce market failures that often lead to cost-ineffectiveness. When selecting which health services to provide or fund, the state should focus on the cost-effectiveness of such intervention because not all public funding may have improved health outcomes that would justify the public spending (Musgrove(1999: 210). Another justification for continued funding for healthcare in the UK is the existing inequalities. Income inequalities have continued to grow in the UK over the years. According to Oxfam (2013), the growing gap between the rich and the poor in the UK is occasioned by the growing income levels of the top affluent families while the income levels of the bottom 90 per cent continues to stagnate. As a result, the five richest families control more wealth than the bottom 20 per cent of the overall population (Oxfam, 2013). This growing income/wealth disparity has resulted in the growing dependence of the poor families on government and charity support for essential needs such as food, healthcare, and education. The growing inequality in Britain means that there is a growing need for public funding for essential services such as health. The growing number of people in the dependence bracket means that accessibility to quality healthcare is a challenge because of affordability. The private sector does not provide affordable healthcare to the poor. Instead, it provides such health services to the wealthy who can afford them. The poor have no option but to depend on government-funded healthcare, which is affordable. Moreover, the capacity of the private health sector is so limited to cater for the needs of the entire population. Compared to the public funded healthcare, the private health care is very small. If the public funding for healthcare in Britain is halted, the majority of the population will be at risk because they will be unable to access healthcare. Even the middle-class people will face the same problem because the private sector has limited capacity. With the introduction of NHS and public funding for healthcare in the UK, there has been a significant increase in accessibility to healthcare. The government funding has been used to increase the capacity of the healthcare system in the country in various ways. First, the government has constructed many hospitals and healthcare facilities across the country using the taxpayers’ money. The construction of hospitals and healthcare facilities has expanded the capacity of the healthcare system to cater for the health needs of the public. Second, public funding of healthcare has been used to train and hire more healthcare professions including doctors, nurses, and other professionals. This has increased the human capacity in the health sector to deal with the growing demand for healthcare services. Currently, the NHS employs over 1.7 million people including 370,327 nurses, 39,780 general practitioners, 105,711 staff in the hospital and community health facilities, and 18,687 ambulance staff (National Health Service, 2013). The previous successes of the public funding for health provide a strong basis for continued funding. Section 3: Analysis of the Case for Reforming Public Healthcare The current state of public healthcare in the UK needs reforms to enhance the effectiveness and efficiency of healthcare services.One of the main strategic challenges facing the NHS is the growing demand for healthcare services despite the limited financial resources. The demand for healthcare services in the UK is growing rapidly due demographic changes. Specifically, the general English population is projected to grow at an annual rate of 0.8 per cent between 2014 and 2012. This is further complemented by projections that the aging population will increase by an even higher annual rate of 1.8 per cent between the same period (Crawford & Emmerson, 2012). This statistics project a challenging future for the NHS. Apparently, a growing population will result in an increase in demand for healthcare services. Additionally, the elderly people are more prone to health problems than the young people. This implies that the elderly people require more healthcare services. With the population of the elderly projected to grow at a higher rate than the general population, this means that the NHS will be stretched beyond its current capacity. The overall implication of the projected rapid growth in demand for healthcare services is that NHS will have to deal with a limited budget to cater for the growing needs. The main risk from the above analysis is that the quality and capacity of the healthcare services provided through public funding will be undermined. Without adequate funding, the NHS will not have the capacity to cater for the growing demand for healthcare services. Provision of healthcare services is a costly undertaking. It involves significant investments in infrastructure such as building additional hospitals and healthcare facilities, training and employing more healthcare practitioners and professionals, and purchasing new equipment, materials, supplies, and technologies. All these require massive financial investments. Without additional funding, it will be impossible for the NHS to enhance its capacity to deal with the projected growth in demand for healthcare services. On the other hand, the quality of healthcare will be adversely affected. In an effort to manage the growing demand for healthcare services, the available healthcare facilities may be forced to focus less on quality. Focusing in quality healthcare may add to the financial burden. Therefore, to meet as much demand as possible, the available healthcare facilities may negate quality. For instance, rather than purchase expensive medical equipment that would have better healthcare outcomes, hospitals may opt for cheaper technologies that would cater for a wider population but provide low quality healthcare outcomes. The main challenge for the public-funded healthcare system would be to balance the limited resources against the growing demand. Although budgetary allocation to funding of healthcare has been increasing over the years, the increase has been minimal compared to the increase in demand for healthcare. The NHS spending as a proportion of the national income grown from 5.4 per cent in 1998 to over 9.2 per cent recently (Crawford & Emmerson, 2012). In 2010, the government set out a plan for NHS expenditure covering the period between 2011/12 and 2014/15. According to this plan, the funding for NHS was to be increased at a rate of 0.1 per cent annually (Crawford & Emmerson, 2012). The planned annual growth in NHS spending (0.1 Per cent) is much smaller than the projected growth in general population (0.8 per cent) and the aging population (1.8 per cent). This implies that the NHS funding will actually be lower than the projected increase in healthcare demand. It is also worth noting that the projected increase of 0.1 per cent annual in NHS spending could actually turn out to be unrealistic. Since the NHS funding is sourced from government revenue, unforeseen economic forces such as inflation could actually lead to budget cuts on healthcare spending. If this were to happen, the effectiveness and efficiency of the NHS would be adversely affected. With the projected financial challenges for NHS funding, the achievement of the NHS objectives will be jeopardized. For example, it will be difficult to provide comprehensive healthcare to the UK citizens with inadequate budgetary allocation. The government may result to policy changes that would further complicate things for NHS. For instance, the government could introduce stringent policies like in the US where many people will be left out in the public-funded healthcare. This should not be ultimate goal of government funding for healthcare.Additionally, the government could result to external borrowing to offset the budget deficit. However, external borrowing will create additional risks to the tax payers because they will ultimately have to settle to debt burden ( Jenkinson, 2003). Instead, the government should consider making policy reforms in the public healthcare sector that would address these challenges. One of the areas for reform is competitive tendering. Competitive Tendering Competitive tendering refers to the process of alleviating government monopoly in provision of public services by allowing the private sector to compete for tenders to provide these services. According to Rimmer (1994), competitive tendering is the process of choosing between internal and external provision of services. Competitive tendering is preferred over and above other options that ensure efficiency in delivery of public services. According to Hensher and Wallis (2005: 297-298), competitive tendering ensures that the three main players in this contractual regome including the government, society, and operator engage in an entrusting relationship in ensuring value for money in delivery of subsidised and non-subsidized services. One of the rationales for choosing competitive tendering over other options is the promotion of competition in the tendering process, which leads to fair market pricing. Additionally, open competitive tendering promotes transparency in the tendering process, which helps in reducing corruption that would lead to losses of public funds (Tadelisn & Bajari, 2006: 1). Competitive tendering was introduced in the UK in the 1980s. Some public services were required to adopt compulsory competitive tendering. Although compulsory competitive tendering has since been reduced, the aspect of competitive tendering is still prevalent in the country’s public sector (Boyne, 1998). The introduction of competitive tendering in the public sector has several positive implications. First, competitive tendering removes the monopolization in public service where government agencies or departments are the only ones providing certain public services. Competitive tendering introduces other entities from the private, non-governmental, and government sectors to bid for the provision of the public services. The outcome of this is the emergence of incentives for innovation in terms of cost reduction as well as increased efficiency (Rimmer, 1994). According to Domberger and Jensen (1997), competitive tendering, through contracting out public services, creates competition for the market where various public and private entities compete for tenders to provide public services. Competitive tendering is currently applied in the provision of healthcare in the UK. NHS tenders out provision of various services and supplies allowing multiple entities to bid for the tenders. This has created a competitive environment where the best bidders are selected. As stated in economic theory, such competitive tendering processes enhance the effectiveness and efficiency of the NHS in providing the healthcare services. However, the available statistics showing an increase in healthcare costs should cause worries in government. Is the current competitive tendering system applied by NHS creating the expected cost savings and enhanced quality of healthcare services? The current competitive tendering system applied by NHS is not effective. Apparently, the competitive tendering process is plagued with bottlenecks that are causing the process to cost more than necessary. For example, incidents of cancelation of tendering processes have had significant cost implications on the bidders as well as the NHS. Currently, competitive tendering processes cost over £1m every year (Ward, 2014).This is a significant amount considering that it does not go direct to provision of healthcare services. According to Plumridge (2013), transaction costs in UK health system account for approximately 14 per cent of the NHS budget allocation. This high cost of competitive tendering forms the basis for reforms in the competitive tendering processes applied by NHS. The current high cost incurred by NHS in the tendering process negates the theory underpinning competitive tendering. Rather than result in cost reductions, the current tendering processes are adding to the cost burden. Considering the projected growing demand for healthcare services, the high cost of tendering could worsen the situation for NHS. What is more shocking is the fact that the government, through the NHS, is bearing part of this additional cost. When tenders are cancelled, the NHS is forced to incur additional cost through development new tendering documentation and administration of the tendering process. The time factor should also be factored in because such cancellations and delays lead to loss of valuable time (Ward, 2014). If the current tendering process is not yielding the expected results in terms of cost reduction, it is high time appropriate reforms were implemented. Appropriate Reforms To enhance the effectiveness of competitive tendering in NHS, several reforms should be implemented. One of the primary reforms should be the adoption of technology in the tendering process. Currently, a considerable part of the tendering process involves bureaucratic processes involving paper work. For instance, bidders are required to submit bids on paper. This bureaucratic process and extensive paperwork is making it costly to implement competitive tendering. Commissioners working for NHS have to deal with huge volumes of documentation that cost money and time. To address this challenge, the NHS should consider adopting online submission of bids. The internet technology is a widely used technology in the UK and across the world. Using the internet technology to send tenders and receive bids provides a cost effective and environmentally friendly option to the use of paperwork. The online submissions will alleviate the current bottlenecks where NHS has to incur unnecessary costs in administering competitive tendering. It is much cheaper to send out bids for provision of various healthcare services using official websites than using print and audio-visual media (Kajewski & Weippert, 2004: 4). Another crucial reform is the centralization of the tendering process. Currently, different entities within the public health system administer their own procurement processes. This creates a complex tendering process that makes it difficult for NHS to coordinate. Through the use of appropriate technologies, such as Enterprise Resource Planning, it is possible to establish a centralized procurement and tendering station that will manage all tenders in the public healthcare sector. The centralized system should be managed by the NHS. All hospitals and entities working under the NHS should submit their procurement needs to the centralized system at the NHS, which will then develop appropriate tendering processes, standards, and procedures. This will reduce duplication in the tendering process and hence reduce the need for cancellation of tenders. Moreover, the centralized system should contain the details of all potential providers of the various healthcare services. This database will make it easier and cheaper to select providers of different healthcare services. Rather than engage in mass tendering, which would result in submission of many bids that make the processing costly and time consuming, the database will enable NHS to send the tenders to the providers that meet the tender qualifications. Finally, the reforms mentioned above should be supported by appropriate policy changes. For example, the NHS should adopt a policy that requires all providers of healthcare under its umbrella to adopt technologies that will link their procurement processes to the central NHS system. That way, no provider of healthcare services under the umbrella of NHS will establish an independent procurement system that will be vulnerable to selfish interests as postulated in the theory underpinning competitive tendering (Boyne, 1998). This is just one of the regulatory or policy reforms that will be required in ensuring that the competitive tendering process by NHS meets the expected outcomes. In conclusion, the implementation of the recommended reforms will be necessary in addressing the challenge of increasing demand for healthcare in the UK at a time when budgetary allocation to the healthcare sector is limited. While other options are still available including external borrowing, these options do not address the underlying concerns. 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