The battle over healthcare provision needn’t simply be a state/profit-making decision says Demos associate William Davies....

The on-going tussles over Barack Obama’s public health care ambitions have spilt over into British politics, due to the totemic international profile of the NHS, with American (and some British) conservatives pointing to it as a socialist relic. Most of the American debate has been characteristically polarised, but there is one aspect of it from which all British policy-makers can learn, whether conservative or progressive. 

In June of this year, Senator Kent Conrad of North Dakota, a centrist Democrat, outlined a plan to establish health insurance co-operatives, with a minimum of 500,000 members each, in order to provide insurance for the forty million Americans currently without any. The White House is increasingly sympathetic, as it struggles to gain ground in its battle for a state-run option; insurance companies are not entirely hostile either.

The co-operative model would begin with a long-term, low interest loan from the government. Being not-for-profit, these organisations could be run according to their members’ collective interests, however understood, which would be laid down in their constitution. Many of the absurd inefficiencies and injustices of trying deliver mass health care via only the market are over-come. (The main challenge is how to achieve the scale of membership that would collectivise risk sufficiently to make it worthwhile).

What are the lessons for Britain? Few would suggest this as an alternative to the NHS. But this debate indicates something important about the relationship between private and public sector: just because a service is not delivered by the government, it needn’t be delivered by a profit-maximising entity either. The sheer variety of non-state ownership options has gone woefully under-recognised in the UK. The privatisations of the 1980s and PFIs of the 90s created a strong dichotomy of public-state vs private-capital. The Left bemoaned the fact that PFI hospitals, for instance, were being badly built, but still paying a hefty return on private investment.

Co-operatives, mutuals and employee-owned models of the firm already play a role in the patchwork of British public services. Foundation Trust Hospitals are independent organisations, technically owned by their local communities. Employee-owned businesses, such as Greenwich Leisure, Sunderland Home Care and Central Surrey Health, deliver public services as independent, private businesses, but without the pressure of external shareholders demanding profits.

The current dilemma of British politics is that the government has run out of money, but that voters are equally tired of profit-chasers riding roughshod over civil society. This is precisely why we need to start asking profound questions about the ownership and control of non-state bodies. My report on alternative models of the firm, to be published in early September, will hopefully make a start in this regard. 

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