This developments have helped improve the NHS to

This report will aim to evaluate and discuss a
very important and live debate on the market for healthcare in the United
Kingdom and the future of the NHS. The report will aim to discuss whether or
not the NHS should be privatized, and if so, to what extent. The NHS was born on
the 5th of July 1948 by a man called Aneurin Bevan since its existence
it has been centrally funded. The fundamental aim of the NHS was to provide
good healthcare that should be available for everyone and did not discriminate on
race or wealth. The NHS has been around for 69 years and has grown
significantly since it first started, however with an ageing population and increasing
demand it was inevitable that such a popular service would soon struggle. (Economist.com, 2018)  Healthcare plays a very important part of
economic society because everyone requires some form of healthcare in their
lives. Healthcare is a merit good this is because it provides benefit to both
others as well as the individual consumer. (Economicsonline.co.uk,
2018) The
NHS has been operating for 69 years but are now facing tough choices. Since the
NHS started the need for healthcare was smaller as the population was much less
than it currently is. With so many people requiring the service and little
resources in order to do so it is clear there needs to be a reform. (Economist.com, 2018) Over the last few decades with a growing
population new developments have helped improve the NHS to serve the public
better. More improved treatments and medications have been developed as well
the use of implementation of technology but these developments have put
enormous strain on the service as it has managed to increase the demand to such
an extent that it causes a demand that exceeds supply. This creates more
problems as the NHS are already short staffed and have long waiting lists and a
shortage of hospital beds. In order for the NHS to be able to deal with this
they can privatize themselves which would therefore allow prices to rise and reflect
the true cost of supply. (Economicsonline.co.uk,
2018) The fundamental challenges that cause a shift in
demand and supply in the NHS: 1)       
A growing population 2)       
Ageing population 3)       
The increase in diabetes, obesity and antibiotic
resistance 4)       
Medical technology costs at least £10bn a year.5)       
Higher reliance on privatized services.6)       
Lack of staff  The supply of healthcare is a fixed one where the
supply curve is perfectly inelastic. This means that healthcare is at it’s peak
when its free for consumers which ultimately results in excess demand over the
supply. This causes long waiting lists as well as shortages of hospital beds.

Since healthcare is classed as a merit good it means that the price mechanism
cannot work. This is largely due to the fact since healthcare is free there
will always be shortage of this resource and that the demand will always exceed
to its maximum. This means that health resources have to be
scarce through systems, such as waiting lists. (Economicsonline.co.uk,
2018) (BBC News, 2018)  It is said that the NHS is the fifth biggest
employer in the world, it currently has 1.7 million people working for its
force. In 2013 and 2014 NHS spending was £109.72 billion which accounts for 20%
of all government spending. (BBC News, 2018)  http://www.bbc.co.uk/news/health-34905801 It is reported that a night in a private hospital
costs £450 on average with treatments costing upwards of £325,000. Since the
demand for healthcare is so high and outweighs the supply it is unlikely that
higher public funding will solve the NHS crises especially with an ageing
population and increasing expectations. People over 65 have a greater need on
health services which reduces the amount of beds as many of them are admitted to
hospitals for falling over. (Economicsonline.co.uk,
2018) (BBC News, 2018)   This graph shows the UK health care spending as a
% of GDP. Between 1990 and 2008 the % of resources provided to public health
care spending rose from 4% of GDP to 7% of GDP. There is a rise between
2008-2010 which is more of the fall in real GDP from recession as opposed to health care spending. From 2010 onwards a
smaller proportion of wealth is being provided to health care spending. (Economicshelp.org, 2018) In order to improve the NHS
it could become taxpayer funded this is an idea where the money would be
provided by government funds, using all revenues of tax. The benefit to this is
that healthcare remains free to the public and the resources are driven by need
as opposed to income and operation of the price mechanism. (Economicsonline.co.uk, 2018) Another
key operation is social insurance, this is an idea based on both employees and
employers making contributions towards the healthcare sector but provision is
also free at the point of need. This idea is also known as European model of
healthcare funding. (The Week UK, 2018) In order to privatize the NHS, the UK could
implement a more US approach to the healthcare system which isn’t without
fault. Private insurance, this would be when consumers pay insurance fees to
private firms and are able to claim when treatment has been authorized. However,
some insurers will reject claims which leaves the consumer stuck without necessary
treatment. If the claim is accepted, then the insurance firm is liable to pay therefore
therefore may have an incentive to inflate the claim and use scarce resources. (Economicsonline.co.uk, 2018) More money is being
pumped into the NHS than ever before. It is reported that £140bn was spent on
healthcare across the United Kingdom, which is more than 10 times the amount
put in 60 years ago. Currently 30p out of every £1 spent goes on health. The
average 65-year old costs the NHS 2.5 times more than average 30 – year old. An
85-year old costs more than five times as much. (BBC
News, 2018) Governments may fail to allocate funds appropriately
within the NHS, a greater control should be implemented on this perhaps by
allowing the NHS to be managed like a private enterprise this gives the ability
for more people in charge to control the funding to ensure each department is
provided with enough without wasting precious resources. (Economicshelp.org, 2018)  In this graph we can see The UK’s ageing
population this shows the problems the NHS will continue to face until something
is done to rectify the issue.  The rise of new medicine is also on a rise and is
causing the Health service to consider capping the amount it will pay for new drugs
at £20m each year. A fifth of various new treatments cost more than this. (BBC News, 2018) Another strain on the NHS is relation in to poor
life choices such as obesity. A third of adults are overweight which puts them
at risk for further health concerns which requires a large amount of money for
the NHS to correct on their behalf. This all contributes to what is called
health inflation where the cost of supplying care outweighs the normal rise in
the cost of living. There is a higher demand for people requiring the A
service, the numbers have risen by a third in 12 years. Since a large amount of
bed spaces in hospitals are consumed by people with a long term condition the
NHS have come up with more of an emphasis to change this, they want to increase
the level of care outside of hospitals in order to take the pressure off. (BBC News, 2018) Various tactics have been implemented by the
government to help reduce the need for healthcare, for example the government
have introduced a “sugar tax” this is aimed at reducing the amount of sugar
consumption which the government hopes will in return cut down the obesity
level and cut down NHS dental services. The government have also taxed the tobacco
industry greatly in order to prevent people from buying them which thus cuts
down the number of deaths by cancer and heart diseases. The aim of the government
here is to increase supply of the NHS but not the demand. (Economicshelp.org, 2018) (BBC News, 2018) Wages in the NHS have seen a decline recently
with pay rises being below CPI. This alongside the pressure has caused a great
deal of shortages across the United Kingdom. Between January and March 2017,
more than 86,000 NHS posts were vacant. With such a mass of shortage of staff
it is clear why the demand exceeds supply. Another important factor is that
there is a rise in the number of junior doctors leaving the NHS after 2 years of
employment. Many choose to take their skills abroad to a privatized sector
where they receive better pay, better hours and a better quality of life. Other
junior doctors after the two years change career paths and move into the
private sector such as finance. (Economicsonline.co.uk,
2018) The NHS can be rationed if healthcare is provided
first come first served this is a fair policy but however the problem lies with
who requires the treatment more. Another option is on the basis of need,
doctors could treat patients who needed treatment more and those who are
suffering from a more serious illness. This results in some patients waiting a
really long time for non emergency but still required operations. It is also
hard to judge who is in a worse scenario. Moral choices can also be implemented
for example if a heavy smoker has a chest infection than should he be denied
treatment for their poor life choice. Since there is no way to ration the only
way to reduce the waiting list is to increase the NHS budget or by encouraging
the public to consider taking private health insurance. (Economicshelp.org, 2018) The NHS is a largely popular service and has
caused many to flock here from other European countries in order to receive health
treatment. Since health treatments is not cheap it is no wonder why people take
advantage of the NHS system for their own benefit. This causes problems as it
causes the NHS demand to exceed the supply. The government are set to increase
the budget for the NHS however this does not take the pressure off. Just
because of a higher budget does not mean that it will be enough to meet the
needs of a rising population and number of treatments. The NHS will have to
figure out an opportunity cost which could mean an increase in taxes which the
public will not be happy about or by cutting down its spending. However,
cutting down costs internally can cause problems in the future for the NHS
where diseases could have been prevented by opening awareness to public. The
government have implemented various strategies that have helped cut down on
diseases such as obesity and cardiovascular diseases these have been done by the
“sugar tax” as well as tobacco tax. (BBC
News, 2018) The
NHS has managed to survive for a staggering 69 years. It has helped many people
in the UK live longer and healthier lives which may not have been possible for
them to do themselves since private healthcare is not cheap. (BBC News, 2018) (Economicshelp.org, 2018

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