I am astonished. I find myself in agreement with a sociologist. ‘The market in health care is not a means of achieving competitive efficiency but a pseudo-market for creating private value at public expense.’

But I suppose agreement comes in that he is speaking to the least favourite part of my education in accounting, economics. Now when a sociologist speaks to economics one would wonder whether you need to find a pinch of salt, but then you already know that you need more than a pinch when you read any of my comments on economics, so my agreement with the man does not lend any support to what he wrote.

However little I understand economics, the use of words like competitive efficiency and pseudo-market, or even market on its own let alone any pseudosity about it, are warning signs of the first degree.  As an aside, if you know what a warning side of the second degree is you are at least one step ahead of me; please share your thoughts. The conclusion however stands up to all the scrutiny of the much less glamourous side of accountancy. If a service is provided by a non-profit organisation then it will, all other things being equal, cost less than an organisation that is set up for profit. This is an obvious conclusion for there is one significant cost within the organisation set up for profit which is not in the non-profit organisation. That additional cost is not taxation it is the return to the owners of the organisation. That return may be in the way of dividends or the super-profit of the owner being the amount in excess of the wages he would have been paid had he been employed by the organisation.  

Of course not all other things are equal, and the inequalities in the other things will drive the cost up or down. The costs of raw materials are likely to be different for the greater purchasing power of the National Health Care System (NHCS) should be capable of procuring raw materials more cheaply than the other organisations. Staff costs may be different in the other organisations for several reasons:

1. The other organisations will not be bound by the national agreements of the NHCS;

1. rates may be higher as a consequence of the expectation of staff that working for a private organisation should be remunerated at a higher rate then working for the NHCS
2. rates may be lower as a consequence of the transfer of the pension costs away from the NHCS
3. Base staffing levels within the NHCS may be kept lower if an other organisation is providing staff. The risk of having more staff than can be usefully employed is passed over to the other organisation.
4. The other organisation will wish to be compensated for taking on the staff level risk.
5. Where base staff levels are inadequate, the NHCS becomes dependent upon the provision of staff by the other organisation who are then able to charge a premium for the staff they provide.

On balance I would consider that it is likely that staff costs will be greater when taking into account a value for each of these factors, notwithstanding that in some local cases the costs may be lower. I am sure there are economists out there who will point out that I have missed many other factors which influence the cost as not all things are equal.

I cannot but then agree, though I say it with a heavy heart being on the purer side of the spectrum of scientists, with the sociologist that the market in health care is a means of creating private value at public expense.

Or, as the man on the Clapham omnibus might say: Those who wish to make a pretty penny out of health care will relish the thought of its privatisation. If we wish to retain our NHS then efforts to privatise any part of it should be resisted.

The sociologist is Robert Dingwall. In https://www.socialsciencespace.com/2022/11/the-covid-pandemic-in-france-a-review/ he is reviewing two books which analyse the response in France to the presence of Covid-19 in the population, and draws interesting comparisons with the UK’s response.  I commend it to you.