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Too much confusion about the role of the private sector in healthcare

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Too much confusion about the role of the private sector in healthcare

by Barbara Citizens

21 FEB

Dear Director,
how much confusion! The debate on the role of the private sector in healthcare returns cyclically. And the discussion always gets lost around some preconceptions which, honestly, I find it increasingly difficult to justify.

Above all, I find it paradoxical the attempt to endorse, even on these pages, personal opinions regarding the disease that afflicts our National Health Service and the treatment that would be needed to eradicate it, with demonstrations that would derive directly from the neoclassical economic theory which, according to illustrious authors , would have already warned us as students about the danger of the private sector in healthcare.

Let’s go back, then, to the “school desks”, but let’s do it with intellectual honesty. Because the clear feeling is that, often, it is not people’s right to health that is being defended, but the public ownership of assets and related satellite activities which are declined from the point of view of employment and from that of consent (“friends of friends ” who, we remind Cavicchi, are not just entrepreneurs).

As Livio Garattini and Alessandro Nobili remind us on these same pages, “healthcare is a classic didactic example of market failure” and public intervention is necessary to remedy this anomaly. But, when we talk about the role of the “market” and of the “private” in the protection of public health, it is good to distinguish financing from the provision of health services.

From the point of view of financing, public intervention is essentially justified by ethical-solidarity reasons.

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Both the Bismarck models of compulsory insurance and the Beveridge models of universal coverage through general taxation, such as the Italian one, aim to limit the phenomena of discrimination typical of out of pocket (where whoever buys is whoever is ill and where the price is independent of the availability economic) and voluntary insurance (where the insurers are high-risk individuals, a situation that leads to incomplete insurance coverage, based on the probability that the disease event will occur and to apply higher premiums or refuse to insure high-risk individuals risk).

Generally the reasons for recourse to the pure private sector – and I emphasize pure, different from the private law component of the SSN – are linked to the purchase of services not provided under the SSN, to the sharing of the cost of the “covered” service, to the timing of (waiting lists) and the desire for higher quality standards.
There is, therefore, a physiological component and a pathological component of private spending.

The same forms of co-payment, which find their legitimacy in the pursuit of greater individual responsibility for consumption, often denote the mere incapacity of the system to support expenditure in its entirety. Clearly, the more the pathological component becomes considerable, the more the foundations of the universalist model and the very justification of general taxation are undermined.

Always on the “school desks”, however, we would have had to learn to discern between the private sector understood as the “market of health services” and the private sector understood as the legal nature of structures operating within the NHS. From the point of view of provision, the Public intervention is justified for economic reasons (market failures), which require regulatory public policies. I emphasize regulation and not production because there is no reason of an economic or social nature for which healthcare services are provided exclusively by public law structures.

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For example, the imperfect information that characterizes the health market requires the current constitutional function of the Regions – called to identify and purchase supplies and services from public and private law hospital structures – and the role of the State, called to monitor and ensure that the essential levels of assistance are effectively provided throughout the national territory, in conditions of equity, quality and safety.

They taught me that the public interest is public health and not the public ownership of structures that must be safeguarded regardless of the actual ability to assist patients and the degree of economic efficiency. They also taught me that the patient’s interest is to receive the best treatment – from the point of view of efficacy, appropriateness and safety – and certainly not that those treatments are provided by a hospital governed by public law. Sick people want to be cured; they are not interested in tax assets.

And I can only bitterly record how much, still today, the mantra of the “private individual chasing easy profit and more remunerative services” clashes with a system where the services of the private law structures of the NHS are not chosen but assigned by the public and where the accredited private sector is the only one remunerated on the basis of national tariffs, when, however, the public law structures continue to be financed at the bottom of the list, to cover inefficiencies and waste.

Now that we have reviewed the lesson, I would like it to be possible to speak of the right to health on the basis of solidarity and economic postulates, leaving the ideology to the speculative sphere, without clumsy attempts at objective legitimization. Because it is a constitutionally guaranteed fundamental right that we are talking about.

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Barbara Citizens
Aiop National President

February 21, 2023
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