MCViewPoint

Opinion from a Libertarian ViewPoint

Why the UK Suddenly Is Suffering from a Physician Shortage

Posted by M. C. on June 2, 2019

Doctors respond to these perverse incentives the same way many rational actors would: by closing up shop.

Imagine Sanders and Occasional-Cortex having their wish come true and running US healthcare.

https://fee.org/articles/why-the-uk-suddenly-is-suffering-from-a-physician-shortage/

A UK tax policy intended to soak the rich has caused highly specialized physicians and surgeons to retire early, depriving more than a million citizens of their services. A new report details the extent to which progressive taxation has harmed British patients.

The NHS is in a state of perpetual crisis characterized by doctor shortages, long wait times, and rationing. The UK lost 441 general practitioners last year and had 11,576 unfilled vacancies for doctors as of last June.

Closing up Shop

But in the last six years, 585 surgical practices have closed down, affecting 1.9 million patients. Last year alone, 138 surgery facilities closed their doors, up from 18 in 2013.

What changed during that time? The Daily Mail explains:

The [British Medical Association] has warned that growing numbers of GPs and consultants are taking early retirement or cutting back on work to avoid hefty pensions taxes which make it uneconomic to continue practising. Retiring GPs often create a domino effect by leaving remaining colleagues with more work, who in turn become demoralised and quit.

The problem has been compounded by the fact that more doctors are now working part-time.

Some members of UK society dismiss anything published in the Daily Mail. However, more socially prestigious outlets confirmed that analysis:

An investigation [in March] by the Financial Times found widespread evidence of consultants refusing to take on extra work to clear patient backlogs fearing extra pay would bust tax allowances on their pensions contributions, triggering five-figure tax bills. …

[T]he Department of Health conceded that around 3,500 consultants and GPs had retired early over the past three years due to pension tax charges.

The Consequences of Manipulating the Market

The NHS pension system is a Byzantine labyrinth of rules and regulations impossible for most people to navigate. These two videos (see below) explain the problem.

In brief: NHS doctors have no choice about whether, or how much, to contribute to their public pension. Physicians must contribute up to 14.5 percent of procedures deemed “pensionable pay.”

Citizens may also have a private pension plan. But since deposits are tax-deferred, the government slashed the annual limit on contributions from £255,000 in 2010-2011 to £40,000 in 2014-2015. There is also a lifetime pension limit of £1,055,000.

To further complicate matters, a penalty kicks in on anyone earning an “adjusted income” of £150,000 annually—but that amount includes earnings and any growth in the pension plan (which is impossible to foresee).

That can cause doctors to exceed government-mandated caps and see their income taxed at 40 to 45 percent. In some cases, they end up paying the NHS to work…

Be seeing you

tax crime

Change that to ANY TAX.

 

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