Do you mean incentives for doctors? In which case, how do you measure how doctors are doing in order for them to get said incentives without continuing on with the current, much decried, ‘target culture’?

For patients going private, see: http://www.hpm.org/en/Surveys/University_of_Southern_Denmark/12/Waiting_time_guarantee_-_an_update.html

Andrew asked: “The same report also suggests that Denmark is moving away from the decentralized structure. Any ideas why?” As I say in my RtS chapter, there was a sense that the system was not as efficient as it could be. Moreover, in a relatively small area, there were difficulties in coordinating between a large number of decentralised authorities. However, note that the system introduced on 1 Jan 2007 is still radically decentralised compared to England. Counties were replaced five regions, ranging in population from about 600,000 to 1.6 million, thus making them analogous in size to English counties rather than regions. The 273 municipalities were replaced with 98 on revised boundaries.

So-called ‘health insurance’ is talked about in the English translation of the Danish documents. However, this is misleading as the ‘insurance’ is simply funded by taxation, and is not a form of insurance as understood in the UK.

In the publicly integrated model those providing health services are civil servants receiving a fixed salary. The integrated model with budgetary restrictions and fixed salaries gives budget security, but in itself it does not give the staff any intrinsic incentive towards efficiency. Efficiency must be ensured through other mechanisms such as professional ethics and good management.

Essentially, the current system of paying through the nose for health care professionals wouldn’t apply in this model. How will you get round it?

Approximately 80 per cent of each region’s funding comes from a national health contribution

or

Regions are responsible for:

Hospitals;
Psychiatry; and
General practitioners.

then I would like to know where you got this information. The Steve Webb and Jo Holland post has done this (although not all the links work) so please, if you want me to take you seriously, get into the habit of doing this. I can just google “Healthcare system Denmark” but I shouldn’t have to.

This serves another more important function also. When you say:

Approximately 80 per cent of each region’s funding comes from a national health contribution, amounting to a rate of around 8 per cent on income tax. The rest is essentially from variable local taxes.

and don’t reference it, I have to go and find similar numbers. When I find in this report from the Interior Minister:

Of the total expenditure on health care in Denmark in 2000, public expenditure constituted 81% and private expenditure approx. 19%.

Then I think “Is that the same 80%?” and if so, why didn’t you mention that the other 19% comes from private health contributions? Of course, it may well not be, but without a reference I am none the wiser, and immediately suspicious. I wonder why you don’t mention the insurance systems in place. Again, maybe you have better information than me, but without your sources, I’ll never know.

A criticism of a free market economy is the problem of asymmetry of information. David Howarth mentions it in his Reinventing the State article. Yet here you show that a political system also has this problem. You have chosen only to give the positive (in terms of a social liberal standpoint) side of the Danish Healthcare system, presumably purposefully because you are trying to ‘sell’ it to the party. Again, from the report from the Interior minister:

* There is a co-payment system in place for some specialities
* Women have a higher mortality rate in comparison to other EU countries
* The budget is very strictly controlled

Why didn’t you mention these things?

Also, you wrote:

They also have a recent innovation whereby if state cannot deliver within one month, then the state pays for them to go private, although the system is currently suspended due to pay disputes

yet, from a civitas report:

In theory, patients can go private if public hospital cannot provide care within a given period. However, DRG [Diagnosis Related Groups] payment is to be the same, and as a result, so far, no private providers have signed contracts – all complaining that payments would not cover costs.

which seems to suggest that the scheme never got started because the government wouldn’t actually pay for it. But again, without your source, I do not know whether you have better information than me.

The same report also suggests that Denmark is moving away from the decentralized structure. Any ideas why?

Happy to debate ideas like this with you. The healthcare system in the UK needs major rethinking and all ideas are welcome. But don’t be a hypocrite.

Markets are useful horses. Like all good horses, they need to be calmed and controlled so they do not panic. Vince Cable has the best view on that.

You keep good horses to get you to where you want to go. When we want to go to diverse places, as free people do, markets are usually the best means we have of reconciling our individual aims.

When there is an element of collective choice in our setting of aims, we reach that collective judgement by means in which market mechanisms can only have a restricted role. We must set those aims through social or political processes.

Markets then come to be an aid in pursuing those aims cost-effectively. Monopolistic suppliers of any service have a strong tendency to build in inefficiencies. This applies to public as to private monopolies. Where you can keep open the possibility of real choice between suppliers, that is worthwhile. Introducing real competition to run bus routes, for example, has improved bus services to the public. However, I wonder if the service might be even better at lower cost if there were publicly owned enterprises competing with the often narrow range of private tenderers. I remember an old municipal adage. ‘It’s a funny thing; competition between builders looks just the same whether there is or is not a municipal building works department who could tender. The only real difference is that tender prices are about 15% lower where there is a works department.’ Similarly, there were US studies which suggested that in refuse collection it paid to keep about 20% of the contracts in house.

Privatisation for privatisation’s sake is not likely to be the most efficient solution for delivering public services. The other side to that is that the possibility of competition from the private sector always seems to improve the conduct of a public monopoly. Presumably that is one factor behind the Danes idea of a right to private health treatment if the public system does not deliver. In Denmark, when I last looked, a large part of the fire service was privatised; and one reason the rest was not was that the possibility of localities choosing public provision kept the private side on its toes; and vice versa. In Sweden, the possibility that outsiders might start schools and attract public educational funds if they attract pupils seems to have improved the public system.

In taking collective decisions , where we want to go summarises as:

• the closer our collective decisions are to us as citizens,
• the more local they are and
• the more we citizens are involved in the collective decisions, the better.

This agenda calls for political action. There is no way any other mechanism will deliver it. Once we have radical decentralisation, how far to use market forces and disciplines to help deliver local decisions can and should be left to the local deciders.

A final point. The distribution of funds between regions and areas in our health service can still only be explained if you bring in historic differences when the NHS was first established. The Danes allocate funds between regions more, not less, equitably than we do in our centralised system.

And if there is evidence that proves me wrong on any of that, I will change my mind as a sensible Liberal does.