The question concerns the arguments for opening the NHS to a less centralised and making it more of a free market form of funding. A centralised market is a market structure that consists of having everything all routed to one central market, with no other competing markets. Therefore, a less centralized market would mean that there would be more options for consumers, with private healthcare providers instead of just relying on the NHS for healthcare.
A free market system is where the government would not intervene, and allow the forces of supply and demand dictate prices and allocate resources. The government would only intervene mainly if for example a correction is needed to prevent market failure.
At the moment, the NHS is very dependent on the government for funding, who also have problems when allocating resources, because there are so many areas such as waiting lists and quality of staff which need more money to improve, but are maybe not getting enough funding as they would like. Therefore, there are many people complaining about the quality of hospitals, or long waiting times for things such as operations, but with the resources they are given, the NHS is finding it difficult to cope with all the demands.
As a result, the Conservative party is suggesting reforms for the healthcare system, rejecting the government’s target based plans. One such policy is the idea of a “health passport”, which would speed up treatment and free up hospitals for more patients. In theory, a less centralized healthcare system would mean that patients would have more choice, rather than just the state funded NHS. Because of this, it should attract more patients away from the NHS, reducing the number of customers with the NHS and helping speed up healthcare.
However, the disadvantages of this suggested scheme must also be taken into account. Firstly, those who cannot afford private healthcare may suffer because of worse conditions and quality of treatment. Private healthcare providers may also cause greater competition for jobs, because the greater pay offered would attract more doctors away from the NHS, who are already in a crisis of not having enough trained staff. Also, having more private healthcare providers does not follow the principle that all healthcare treatment should be free.
On the whole, I think that opening more private healthcare providers should be a good thing, as it will free up NHS hospitals and give people a wider choice of healthcare. However, it will be vital to monitor the situation, to give families with lower income the same choice of healthcare as the wealthy, and to ensure that a high quality of treatment is retained in government funded healthcare providers. This should be possible because the state would be willing to pay for the treatment as long as the cost is no greater than that of the NHS. In my opinion this would lead to a greater improvement in healthcare overall, and patients would not have to wait as long for treatment.

Independent study 2

£19bn for “education, education, education”

1.  A positive statement is a statement that does not express any opinions, but can be factually incorrect. An example of this is “this is the biggest single investment in education in the history of our country. This is a positive statement because it can be measured, by checking the government’s records on whether or not the money being invested on education is the most ever spent in education.

A normative statement is the opposite of a positive statement and can express opinions, although the statements cannot be proved or measured. A normative statement that can be found in the article is “virtually all schools have been starved of resources for more than a decade”, because it is an opinion of a person, and will be incredibly difficult to prove that it is correct or incorrect.

2.  A production possibility frontier (PPF) shows the quantities of two goods that an economy could produce assuming that production is efficient and resources are limited. This can be shown by a curve on a graph, with one product on each axis. The reason it is not a straight line is because generally production is most efficient when there is a balance in the production of goods. If there are too many workers concentrating on just one product, it is less efficient than spreading the labour. If a point is outside the curve, then it is impossible because there are not enough resources to produce at that rate, while if the point is inside, then production is not efficient.

3.  Real terms refer to real values, unlike nominal values. Real values adjust as the price index changes over the years, as the value of a particular currency will always be changing, so when the term “real terms” is used, it refers to what can be bought with the same amount of money at that moment in time. For example, the value of the pound now is different to what it was a few decades ago.

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6.  If government spending on education is effective in improving the quality and efficiency of the workforce, the PPF curve should grow outwards in the education direction. This means that the workforce should be more efficient, which in turn increases production, and more money can be spent on improving the quality of education.

7.  Firstly, if more money is being spent on education, one opportunity cost could be that the money which was spent on education could have been spent on other areas such as the NHS, hospitals or more police officers. The funding of the NHS is one of the main political issues at the moment, and the government as promised that more money will be spent investing in the NHS. However, if education gets priority over this, the same amount of money will have to be split between both, so other departments will not get as m uch funding as they think they should have.

Also, if the main focus is on spending on education, another opportunity cost may be that the focus may start to shift away from other issues such as the war on terrorism and the war in Iraq. Some, especially those with relatives fighting in Iraq, may argue that the government should spend more time and money on Iraq, so that the soldiers fighting there will be able to return home sooner.

The economic problem refers to the scarcity of commodities, that there are not enough resources to produce the goods to satisfy our unlimited wants and needs. This means the government has to choose what the resources should be allocated to, although these decisions are very hard to make, as there will be arguments for each side. The National Health Service is already facing many problems in terms of lack of money for example, so due to the under-investment the government must increase the budget.
Resource allocation is one of the main problems facing the government, as they must decide where the money would be best spent. For example, they must decide whether to spend on more local GPs, recruitment or medicine. Because of the demand for all of these, there will be different arguments for them, and the government must decide which one will most benefit the community as a whole. However, the public will only be willing to fund these improvements and pay higher taxes if they can see an improvement in the NHS. Because everyone has different opinions on what the money should be spent on, resource allocation is vital so that the demand of most people will be satisfied.
There are opportunity costs involved in every decision the government makes on spending in the NHS, for example choosing between spending on more GPs, or hip replacement operations. The opportunity cost of spending on GPs may be that someone who urgently needed hip replacement because of an accident could not afford private treatment, and therefore could no longer work. On the other hand, the opportunity cost of choosing to spend on hip replacement is that there is a much greater demand for GPs, and the ill may find it hard to find a local and easily accessible GP to go to if there is none nearby. It is choosing between these types of choices which make it hard for the government to satisfy everyone’s demands and needs.
The text also suggests that there are other alternatives to the issue of health provision, such as a social insurance fund, which would be dedicated to providing the best use of funds received by employers and employees for health care. However, there are also downsides to these alternatives, because these schemes would increase business costs which could reduce employment. This in turn could have knock-on negative effects on the economy.
Another suggestion is to set up private health services, so each individual can pay for their own treatment. This means they are not dependent on the government for funds, and each individual will know what their money is being spent on. However, this will mean that some who need it will not be able to pay for private treatment, while others may think it is not necessary, but may end up needing to pay more for treatment if they do need it.