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A Quick Musing on Choice

Prompted by an article in the Guardian by Aditya Chakraborrty, I decided to muse briefly on the notion of choice in public services being a panacea for improved provision. I don’t believe for a minute it is, and here’s why:

Choice, in itself, is probably a good thing, in the sense that I’d like to be able to choose to go to hospital within 20 miles, or send my daughter to a local school with decent results. I need to have some options available to me, but the issue of privatisation is not about introducing this kind of “equal” choice.

If you, hypothetically, introduce a private healthcare system which gives everyone a basic personal budget (national insurance, let’s say) and a range of hospitals to use, then a problem quickly arises. The companies owning the hospitals have the capacity to offer “value-added” services, so for a top-up fee, they provide shorter waiting times, private rooms, better food, more nursing attention. These patients quickly become the ones that deliver the profits to the company and so they become the focus. The people using only their national insurance end up with mediocre services at best, because they offer nothing to the hospital.

In fact, the hospital doesn’t really care if the non-top ups choose the hospital or not, because there is no profit in them. Inevitably, care for national insurance patients becomes poor, and maybe drives these people away, because they have a “choice” to go somewhere else. The problem is, all hospitals are the same and so regardless of the vast array of choice on offer to national insurance patients, the reality is that their service will suffer.

Put simply, you cannot claim that choice (effectively market dynamics) improves patient outcomes without looking at the supply side issues too. Choice alone will not drive up standards unless you heavily regulate the suppliers to ensure they offer a decent service to ordinary people.

This then automatically becomes a corruption of the very market forces you are relying on to improve standards (if providers can’t properly compete, why bother) and quickly results in a two-tier system. This is why in the provision of something absolutely essential (healthcare, education), market-driven choice as a driver of improved standards is a complete red herring.

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