OK, here's a different analogy, adapted from one upthread. I picked scoliosis as a random example only.
Imagine that the NHS's success rate in treating scoliosis in childhood is on average 50%. Some hospitals do much better than this, some do worse but overall 50%.
However, a specialist private hospital has a success rate of 80%, so unsurprisingly a number of parents who can afford it self-fund their children's treatment, though it's pretty expensive and a stretch for many.
Then Rachel and her pals introduce VAT on private medical costs. They decide private medical care is a luxury, and it's only fair that those paying for their children to have private treatment pay some extra to pay for others' children to have NHS treatment.
This result is that - say - 15% of parents are priced out, they can no longer pay for private treatment so move their kids over to the NHS.
The amount of VAT raised from the private medical treatment unfortunately is insignificant - Rachel said it would raise enough to pay for 1/3 of an extra doctor per NHS region but in the end it's not quite this much because the NHS also has to pick up the treatment costs for a more kids transferring over than expected.
The effect of the policy is:
- waiting lists in some areas increasing for all NHS treated children because of the influx of children from the private hospital.
- in other areas the NHS trust has no more capacity in its paediatric spinal units so they have to pay for taxis for children to be taken for treatment in hospital in a neighbouring trust area.
- the NHS rate in successfully treating scoliosis remains unchanged because less than 1/3 of a doctor per NHS region is just a drop in the ocean and is balanced out by the above effects
- the kids who were already in the NHS system still have only a 50% prospect of being successfully treated
- the kids who transferred over from the private hospital see their prospect of being successfully treated drop from 80% to 50%
- the kids whose parents remain at the private hospital continue to have an 80% prospect of being successfully treated.
Would you say that is a positive and fair outcome, overall?
Or would it be better for Rachel and her pals to find a way to raise a meaningful amount of tax that would be enough to fund improvements in the NHS leading to a 60/70/80% treatment for its scoliosis patients?