Thoughts on healthcare


By D. J. Webb

I am sorry to have disappointed Dr Gabb by not posting for some time. Here is my explanation and some thoughts.

I went to the Ukraine in early December to stay for three months with a friend in a city called Dnepropretrovsk (renamed Dnepr). Apart from the weather, it was a very pleasant holiday. I particularly enjoyed learning how to make the dish, compulsory for New Year’s Eve, herring “under a fur coat” (herring under layers of potato, egg, carrots, beetroot, all mixed up with mayonnaise). It sounds terrible, but is very delicious. And I got to practise my Russian. I’m not impressed that a first-class degree in Russian, such as I was awarded by Leeds University in 1995, is given in this country to people with far from fluent Russian. Parliament ought to look into it. But my Russian is better than ever before.

But there were some unpleasant things. The number of burglaries in my building over 3 months was amazing. Getting into the lift and seeing signs of a struggle — blood and possessions strewn on the floor — and knowing someone was robbed there is quite disturbing. I got in the lift once with two people I didn’t recognise, and they wanted to know what floor I wanted, which was an alarm bell. I told them the 16th, although I lived on the 15th, and they didn’t get out at any floor: did they in fact live in the building? I got out at the 16th floor and quickly disappeared down the stairs and got home safely one floor down. The next day, my Ukrainian friend was held up in the lift and told I would be harmed, as they knew I was a foreigner, unless we gave money. They had knives and he gave them £30 and they stayed away for the rest of my trip. The police later said these people are believed to be desperate people who came over from Donetsk where the war is going on. Another surprising thing was the frequent power cuts. We frequently got home to find the lift not working, and there was only one option: to climb 15 flights of stairs to get into a flat with no Internet or lights working.

However, I took all these things in my stride. I went to the gym there (about £10 a month). We went to a karaoke bar once a week, where I enjoyed smoking Arabian-style waterpipes (hookah pipes). But my happy trip came to an end on February 5th when I fell on the ice near the building. The ice gets more slippery after a few days of milder weather and a subsequent refreezing of the ice. No paths ever had any salt applied. It was very slippery everywhere, but I coped for many weeks until I fell, and broke my arm. I couldn’t get up off the floor, and lay there for some minutes until an old man helped me up.

I went to a nearby shop where I knew they were friends with my Ukrainian friend and he came out straight away and took me to hospital by taxi. The state hospitals are not free, but the price for being bandaged up in a splint was around £20, including bribes that had to be given to get the X-rays immediately without waiting for 24 hours. The next day, we went to a better hospital, and they told me I definitely needed an operation, and the price would be at least £1,000.

Dima decided to take me to Kiev, as I was 500 km from the capital and relatively remote if I had to go home. I had a very painful overnight train trip lying down for 8 hours until we got to Kiev, while Dima struggled with all our suitcases. We went to a well-regarded hospital there where the doctors were friends of Dima’s friends, to see if they would operate. But my insurance company (I paid £31 insurance to cover me for three months abroad; quite cheap really) refused to allow me to have an operation in Kiev. In the hospital in Kiev, the local doctors, being friends of Dima’s and not seeking to rip me off, told me I would be far better off going home to England. The insurance company gave me two seats (to accommodate my arm) on the plane and a taxi home from Gatwick. I came home on February 8th, having planned to stay until February 23rd.

I went the same day to Lincoln hospital. They laughed at the dressings the Ukrainians put on me — they “mummified me” — but refused to operate, telling me a mid-shaft humerus fracture can heal on its own. After several visits to hospital, I’m not in a fracture brace, and 6 weeks after my accident, there is only minor sign of bone callus forming, and I’m looking forward to many more weeks of this.

My Ukrainian friends are convinced the NHS is trying to save money by refusing me an operation. Had my arm being pinned on day one, I could have moved the arm straightaway and begun physio. This “natural” way of healing is slower, and carries the risk of allowing the elbow and shoulder to become so stiff over such a long time without moving them that I may not get full range of motion back. In the Ukraine they believe it’s better to take the risk of disturbing nerves and operate without delay in order not to allow the joints to seize up. I’m wondering if the doctors — all the doctors in Lincoln hospital are from India — even really give a damn about an Englishman with a broken arm. But I have no choice other than to try it their way.

I can type, but more slowly, without moving my elbow, by positioning a USB keyboard appropriately. I have also had to do a large volume of work, as this is a busy month for me, and as a self-employed person I can’t take the risk clients will find others to work for them, with me gravitating towards the jobseeker’s allowance. So my life has been difficult. I can’t wash up, or have a bath, and find it difficult to cook. But hopefully before another six weeks has past I’ll be out of a sling. I didn’t previously know a broken arm took months not weeks to heal.

At this point, it might be appropriate to think of libertarian approaches to healthcare funding. People live in fear of illness in the Ukraine, as the doctors all want bribes, and will send you for test after test after test to make the maximum amount of money from you. At least in the UK, we have a healthcare system that is supposedly designed to give people the healthcare they need, not to simply extract money from them. But you are then left in the position, not of a customer, but of a recipient of government services. The doctors — actually, the state — will decide what you need, and you have no say in the decision. A big sign in Lincoln hospital announces “we do not offer second opinions”: the doctors’ decisions are final.

But I note that Dr Gabb has previously stated the view the cause of liberty needs to have a support base to advance it, and policies to simply delete free healthcare would harm the interests of less well-heeled people who might oppose political correctness and immigration. There are too many “cloud cuckoo land” libertarians who seek merely to destroy the livelihoods of the working class. Donald Trump is walking into the trap of seeking to implement policies that will raise the cost of healthcare, directly attacking his own base, and the only base of liberty in America, working-class Americans.

I would also regard abolition of the NHS with undisguised alarm. Libertarians need to be a little cleverer than to simply advance the economic interests of the already well-heeled, who are people who have overseen a huge reduction in the cultural space afforded to free speech and free association. Personally, I think market signals can play a role in GP surgeries: a fee to visit the doctor could cut down on visits from people who could just go to Boots for their cold medicines. We have free visits to the doctor, but not free prescriptions (or not for me, anyway). It would be much better for visits to the doctor to be charged for (by everyone), but drugs given free to those who need them; drugs that are the same as over-the-counter medicine should not be prescribed. People should simply be told to go and buy what they need from the chemist’s. Those who need non-OTC medicine should get it for free. This would be better as a large proportion of people do get their prescriptions for free anyway, and it would be better to shift the subsidy away from free consultations with the doctor to free prescriptions, so that everyone could easily book a consultation with their GPs on time.

I also do not see that A&E departments should check on immigration status. As a decent society, A&E treatment should be free for all in the country. We shouldn’t bring in (anyone) from the developing world in my view, and so we wouldn’t turn A&E departments into an international health service. And in all cases, operations, in-patient treatment, as opposed to emergency treatment, should only be made available for free to British citizens. The cost of healthcare should be constrained by “tort reform”. In almost no cases should a failed operation lead to monetary compensation.

Think about it. If your baby dies in hospital, you’re set up for life. You’ve won the lottery. You can pay your mortgage off. The fraudsters who seek these payments claim “it’s not the money, but the principle, that counts”, but if offered a small sum, they then cry, “are you saying my baby’s cadaver is worth only that?” Cadaver trading, which is what it is, should be outlawed. Someone dying in hospital– this is fully within the normal range of outcomes expected from hospital treatment. Real negligence should lead to manslaughter charges against the doctors. Without genuine negligence, a failed operation is just one of those things in life, without a lottery win attached. This way, the NHS would not have to insure itself against claims. The claims management industry would be thrown on the dole. And healthcare spending would be focused on real healthcare and not legal claims.

I would like to focus state spending on healthcare and pensions and delete over time the whole of the rest of the welfare state. I oppose public-sector occupational pensions. I would cancel the unfunded portions straightaway, including the unfunded portions of ones currently being paid out, for lack of interest in meeting this long-term pension burden. Look at it like this; if you work self-employed in the gig economy, you will get the state retirement pension, currently a maximum of £6,200 a year. And you will pay tax to finance NHS pensions, which are not fully covered by contributions those workers make. The online NHS pension calculator shows that someone who earns £30,000 a year and who has worked for 30 years for the NHS and plans to retire at 60 can expect a lump sum of £33,750 and an annual pension of £11,250, in addition to the £6,200 state retirement pension.

In my view it would be better to stop all net funding of public-sector pensions other than what is strictly financed by contributions made by those workers themselves, and pool the money saved to give everyone a better state retirement pension. The state should not maintain two separate lists of people — those to whom it has committed to pay £6,200 a year in their golden years and those to whom it has committed to pay £18,000 a year plus a large lump sum. The only pensions paid by the state should be the state retirement pensions. In 2015/16 £89.4bn was spent on the state retirement pension. In 2016/17 public-sector pension payments will be £40.1bn, but £28.7bn of contributions will be received, leaving a net £11.5bn cost to the Treasury that can be better deployed as a 13% increase in the state retirement pension for everyone. NHS workers would still receive their occupational pensions, but only that proportion of them that they have contributed to themselves.

I’m therefore not arguing the state should spend nothing. And libertarians who argue that are simply anti-working class and seek to attack those who culturally would support a rollback of political correctness. However, I do support eliminating personal taxation (income tax, national insurance, council tax, the TV licence, inheritance tax, capital gains tax, tax on share dividends, stamp duty). This is because ordinary people who are not companies should not have to disclose their earnings to the state. All state money should be garnered from a land value tax (which would not require income disclosure), taxes on business and import taxes. The approach I have outlined could see the state rolled back by around half to less than 20% of GDP in a Hong Kong-style small state.

Those who wish the state to raise no revenue ignore the socially created nature of windfall gains on property. Those who have privatised a socially created gain then pretend that the working class are the main beneficiaries of the current economy. I recognise that some gains are not privately created, and land and resources in particular belong to society as a whole and produce a revenue that should be used for public ends. This is also the stance that John Stuart Mill took on the land question. Libertarianism should not be a race to the bottom in a skewed economy where “free marketers” support a further skewing of it. A state that spent 20% of GDP, mainly on healthcare and pensions, and did not trawl through its citizens’ incomes would be much freer than England today — and a proposition that working class people could accept. As a libertarian, therefore, I declare that I deserve my free healthcare, and will continue trying to gain access to it. I would encourage Donald Trump not to listen to the “freedom caucus” that want to delete a requirement that insurance companies insure everyone regardless of pre-existing health conditions. What should those who have ill health do? Just keel over in the streets in the name of liberty? We need a libertarianism that can harness working class support, instead of endless think-tankery.

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16 thoughts on “Thoughts on healthcare

  1. With regard to public sector pensions, an issue I see with what you propose is that these relatively generous pensions provide an incentive for people to go into public sector employment, which may be important as the front-line jobs don’t otherwise offer particularly attractive working conditions. A more discriminatory approach may be called for.

    I don’t like the idea of a land tax. I would replace all taxes with a head tax (i.e. poll tax) on all adults over 18. The virtue of this is that everybody pays the same and there would be complete transparency regarding public spending levels.

    I agree with everything else you say.

  2. Very fine essay. Sorry to hear about the broken arm. You probably did well to get yourself back to England to be treated. In general, I agree with your approach. Certainly, we must accept the need for a welfare state in the short and medium term, and look for better ways to run it than we have at present. As for a land tax, I agree again – but only if it were a genuine replacement for what we have, and not an addition to the burden.

  3. Excellent article – much to mull over. Bad luck with your arm but your misfortune is our gain with this foray in to your experiences with a corrupt system and the Ukrainian system as well. 🙂 Seriously it is interesting to hear those different medical opinions – they kind of each sound plausible to me.
    Healthcare is a tricky one – no question. No advanced nation has laissez faire healthcare that I’m aware of. And getting things like healthcare right will be ultimately a big part of what makes or breaks any more significant move in a libertarian direction – here or elsewhere.
    Singapore has one of the best – mandated savings in to a fund from which you pay for your healthcare directly and/or buy insurance. Govt forces providers to publish all of their costs, and more subsidised providers that don’t offer the full hotel experience for in-patient procedures. So overall some market forces at work between providers and patients that…well, helps to control prices I guess. Overall costs are much lower as a % of GDP and outcomes are very high. Still genetics and lifestyle will play a part also and there is a whole ton of government going on as well. When you hit 40 or 50 I think you can take out some of your pot so long as you leave about 40k behind I believe. Any unspent portion I think can go to your kids/relatives. If you have a large unspent portion at your death well you can feel that you haven’t been a burden on your fellow citizens say. Also, if you don’t have enough for some procedure then the state goes to your relatives fund first before the state helps. An intriguing welfare idea in a way – to insert ones family in before the state gets involved.
    Another idea perhaps would be to hypothecate say NI taxes for healthcare such that – in the end – we get the healthcare that we are both able and willing to pay for.
    Otherwise we probably have to wait for revolutionary new technologies that slash costs, or something.
    So much to play for for the libertarian minded I think.
    Your broken arm also provides an example of where patient choice isn’t completely inappropriate in healthcare – you could weigh up the faster cure versus stiffer joints versus better healing versus more pain versus cost. Whatever anyone says its clear that health professionals are in fact no better at making that decision for you and potentially a lot worse. Spend any time in the medical world and you see these decisions all the time. Sorry lefties but people it turns out can make some of their own decisions after all – who knew?
    Anyway, great article and more writing please. I would be particularly interested if you get a tropical disease somewhere and what happens. 🙂 (Only joking!)

  4. After we leave the EU, I would offer free healthcare to the nationals of any European country that itself gave its citizens free healthcare. So if Poland has healthcare free at the point of demand and offers that to UK tourists too, then Poles get healthcare free at the point of demand in the UK as well. But we shouldn’t offer free healthcare to citizens of nations that charge for it. We got into a stupid reciprocity in the EU that all nations had to offer the same to other EU citizens as they offered to their own citizens. In some cases, that was meaningless, as they offered little to their own citizens. We should scrap the European health card and just offer free healthcare all round to related European peoples.

    • The complications I see with this are:

      (i). On closer examination, most of the countries that purportedly offer ‘free’ or ‘universal’ healthcare are in fact operating insurance mandates or hybrid public/private systems, rather than a single payer model. This makes reciprocation difficult.

      (ii). If the difficulty in (i) above can be overcome, countries like Germany, France, the Scandinavian states, and the Benelux area would be prime candidates for reciprocal arrangements (on the proviso that they implement proper immigration and borders controls), because they have comparable economies and so there is little or no risk of exploitation. But in my opinion Poland and the rest of eastern Europe would not be desirable countries for reciprocal arrangements, even if they operate like-for-like healthcare entitlements, as their economies are not comparably developed.

      (iii). In relation to my proviso for candidate countries, the Schengen Agreement would require radical reform. In my view, the scope of the borderless zone should be limited to the group of north-western European countries mentioned above, with a hard border outwith the Zone.

  5. “I would encourage Donald Trump not to listen to the “freedom caucus” that want to delete a requirement that insurance companies insure everyone regardless of pre-existing health conditions.”

    Well they should delete it – it is utterly unworkable for an insurance company. If they want people to have free at point of consumption healthcare (at some income levels), just offer it on that basis, rather than distorting insurance companies’ pricing models further.

    • That was an example of everything wrong with libertarians. Spiteful and vindictive to fault. You would like to see the serious ill unable to get healthcare. One day you will fall ill, and despite being an evidently flawed human being, you will still hope for kind treatment yourself (but not for others).

      • You haven’t read what I said properly, or you’re reading things into it which you want to. The way the US healthcare system works is a mess. Forcing insurance companies to be unable to discriminate against PEMCs will wreck their business model. It necessitates heavy subsidies to them, because insurance is ALL about price discrimination in terms of risk. So all one is doing is creating an incredibly inefficient system in which third parties are now embedded at the financial end. The worst thing about Trump care was its proposal to continue this.

        Therefore, as I said, if you want free at point of consumption healthcare, offer it on that basis, like the US government already does with its veteran care or Medicaid (https://en.wikipedia.org/wiki/Medicaid). The problem, of course, is that this system hasn’t got a particularly great rep in the US. Nonetheless, it would at least be an improvement over their current mess of a system.

        The US healthcare system was not perfect (and let’s not full ourselves into thinking the NHS somehow is) but the ACA has done the precise opposite of what was promised:

        http://www.discoverthenetworks.org/viewSubCategory.asp?id=1957#HIGHERINSURANCEPREMIUMS

        Workarounds to it are already forming:

        https://mises.org/blog/ryancare-failing-%E2%80%94-what-should-happen-next

        So, what you have at the moment is an incredibly inefficient pricing model, forcing individuals to pay for everything under the sun, to the point that many younger individuals would rather pay the tax and opt out of it.

        “One day you will fall ill, and despite being an evidently flawed human being, you will still hope for kind treatment yourself (but not for others).”

        Yeah, this is just an emotionally driven personal attack, tbh, much like calling me spiteful or vindictive. Not much of an argument. Don’t project your frustrations with beltway libertarians onto me.

      • What does annoy me about libertarians is how they will often claim that healthcare in the UK is ‘free’. In fact, it’s not free. It’s paid for by the taxpayer. It is only ‘free’ at the point-of-use, which only has catastrophic implications if you decide to start opening your borders and letting into the country any Tom, William or Abdullah. The irony has not escaped me that it is normally those very same libertarians who call for open borders.

        Likewise, with social security, which in Britain was designed and intended as a safety net for working people, not a lifestyle. It only started becoming a lifestyle when British governments from the 1960s onward started adopting ‘liberal’ economic policies and abandoned the strategic protection of British industry. Again, it is libertarians who favour this so-called ‘free trade’.

  6. The idea of a Land Value Tax needs to be explored more. I would welcome an essay on this blog addressing this issue exclusively. I know Murray Rothbard hated it. It would effectively destroy what is left of the aristocracy too.

    At what percentage ought the LVT to be levied and why?

    • I have published articles on the LVT. We are not in government, and so not in a position to draw up a budget, so how can we say what rate would be levied? I would keep on raising it until land prices stabilised, preventing the use of property for speculation and making work worthwhile to people hoping to work hard and get a house. The higher the LVT goes, the more it discourages property ownership and so tends to depress land prices especially in expensive locations. Encourages more efficient use. it would replace at a minimum council tax and inheritance tax. There is no reason inheritance tax should be paid on earnings from labour or capital (your work and investments). Expecting to garner a huge capital gain on your property just because Crossrail has built a station nearby with state money is something else entirely. See http://www.sharetherents.org/

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