The Institute of Economic Affairs (IEA) has called for a radical transformation of the National Health Service (NHS), proposing it be replaced with a Social Health Insurance (SHI) system to improve healthcare outcomes in the UK.

According to a new IEA paper, shifting to an SHI model, similar to systems in countries like the Netherlands and the Czech Republic, could bring the UK’s healthcare performance in line with other European nations.

The report highlights that attitudes towards the NHS have shifted dramatically, from “source of national pride” to 29 per cent of Britons having told YouGov that the NHS is worse than healthcare systems in Europe.

The growing dissatisfaction with the NHS has been well documented, resulting in a surge in people turning to private health insurance.

It was reported earlier this year that private health services were expected to see over 900,000 private admissions in 2024.

NHS challenges

Prime Minister Keir Starmer has acknowledged the NHS’s challenges, warning that a series of major reforms to the NHS will “take a decade” and won’t be “universally popular”.

The free-market think tank’s proposal suggested that the introduction of market competition through an SHI system could improve patient choice, reduce waiting times, and raise standards across the board.

SHI systems, which rely on regulated competition between private insurers and healthcare providers, are already in place in many European countries.

The IEA’s report argues that this model would allow for greater flexibility and innovation in the UK’s healthcare system while maintaining access for all, with government support for those unable to afford insurance.