Should Britain start charging people to use the NHS?

Another think tank recently made headlines by suggesting that up-front charges should play a much greater role in how we fund the NHS than they do at present. David Kingman explainsUK spending cuts

There can be no doubt that the NHS remains a great source of national pride. A survey conducted earlier this year by pollsters Ipsos MORI found that it was the institution which made people feel proudest to be British; 72% of respondents thought that it is “a symbol of what is great about Britain and we must do everything we can to maintain it.” However, the same survey also revealed marked anxiety about whether we will still be able to afford to keep the NHS we have today in the future: over a fifth (21%) of respondents said they agreed with the statement that it was “a great project for its time, but we probably cannot maintain its current form.”

Official statements from policymakers support the view that the NHS will face significant funding challenges in the future, as it struggles to deal with the ageing of Britain’s population, increased health problems caused by lifestyle changes such as obesity, and the pace of technological change in medicine. A study from leading healthcare think tank The King’s Fund in January 2013 warned that if NHS spending grows as quickly over the next 50 years as it did over the previous 50 then we could end up spending nearly 20% of our entire GDP simply on health.

Although the Coalition Government has officially ring-fenced spending on the NHS from the austerity measures which have bitten in other departments, in reality this has meant that spending has remained flat during a period when the demands placed on the system have been rising. In 2011, the then head of the NHS in England, Sir David Nicholson, launched the so-called “Nicholson Challenge”, which asked the whole NHS to find £20 billion in “efficiency savings” by 2015 so that the service could continue providing the same standard of care.

All this points to a grim reality for proponents of the NHS: the present funding model is in upheaval, and even if strong economic growth returns over the coming years, we may still need to have some uncomfortable debates about how we can afford to pay for it going forward. This is where the think tank Reform has recently entered the fray, by publishing a report which addresses one of the great taboos in debates over NHS funding: charging patients directly for using services. Is this an option we need to consider?

The cost of our health

Reform published a study on 19 November called The cost of our health: the role of charging in healthcare, which proposed some relatively modest ways in which patient charging could be introduced into the system we have today. It pointed out that Britain is an anomaly compared to most other developed countries for not charging patients to access basic health services: 22 of 31 OECD countries have systems under which patients pay a fee to make basic GP visits (Sweden charges you as much as €20), while 16 of Britain’s OECD counterparts levy some kind of charges on elements of secondary care, such as making people pay a flat fee to cover food and boarding costs when they have to stay overnight in hospital.

By contrast, the vast majority of interactions between individual citizens and the NHS are free, including GP visits, Accident & Emergency admissions, and practically all the programmes of treatment which can follow on from them. Even in the areas of the NHS where people do have to bear charges, most notably drug prescriptions, there are extremely generous exemptions covering groups such as the young, the elderly and welfare-recipients; Reform notes that, as a result, 62% of the population qualifies for free prescriptions and 90% of drugs are dispensed free of charge.

Reform argues that given the NHS is projected to face a £30 billion funding shortfall by the end of this decade, it would make sense for the service to start charging people for certain elements of their care. In particular, they propose: radically reforming prescription charges so that the majority of people would end up actually paying for their medication, and charging a flat fee of £10 for GP consultations and each night spent in hospital, while also levying a fine of £10 on people who waste NHS resources by doing things like missing outpatient hospital appointments. Altogether, they estimate that this relatively modest package of reforms could raise over £3 billion a year to help fund vital NHS services.

However, even this would represent a major game change in debates about how we should pay for the NHS. A spokesman from the Department of Health responded to Reform’s suggestions by telling the Press Association:

“We have been absolutely clear that the NHS should be free at the point of use, with access based on need. That is why we have increased health spending in real terms alongside £20 billion of efficiency savings to make sure the NHS continues to provide excellent care.”

Should the NHS start charging?

Whether the NHS should start charging people who are ill to access basic services is a very complicated area which would need to be thoroughly debated before any such plans could come into action. Clearly, there are arguments on both sides. Supporters of patient charging could argue that it will discourage people from using the health services unnecessarily, reducing waste, and that it should pump extra funding into the system which can go towards helping those who have the most serious and expensive-to-treat complaints.

Opponents could argue that nobody chooses to be ill, so introducing charges would be unfair; it would discourage poorer people from seeking medical help, and as we feel we have already paid for the NHS once through our taxes and National Insurance Contributions, it would effectively mean asking people to pay for the same service twice. There is also an argument that fees might become something of a slippery slope; you only need to look at the history of tuition fees at English universities to see that they are very likely to keep going up once the initial step of charging them has been taken.

The intergenerational angle that this debate needs to acknowledge is that the NHS is predominately a service used by older people; as Reform itself notes, 60% of all drugs dispensed are given to the over-60s. Therefore, transferring part of the cost of funding the NHS from the general taxpayer onto users would essentially be a transfer from young to old. Reform argues in its report that it would be more equitable if older people have to pay some of the costs of using the NHS, and given that the ageing of Britain’s population is a major driver of demand, this does seem fair. Or rather, it seems fair to stop using age as a proxy which enables you to avoid being charged (as happens with prescription charges under the current system), when there are so many wealthy older people who can afford to pay, while at the same time many poor people of working-age may be missing out on vital drugs because they can’t afford to pay prescription charges (a point which this article from The Guardian emphasises). Any future charging regime should avoid giving blanket relief to specific groups on the grounds of age, and concentrate on their ability to pay instead, so that the most vulnerable of all ages are still protected from ill-health. However, taking free prescriptions away from wealthier older people won’t seem like good politics to any MPs who are worried about angering the grey vote, so don’t expect too many to back this idea.

Of course, the enduring popularity of the NHS could mean that people would actually be willing to simply pay higher taxes in return for keeping the system as it is. Many younger people happily support the system in the expectation that it will be there for them when they need it (especially in their old age), although with the forecast funding problems, that may be an unwise assumption to make. With so many pressures bearing down on the NHS, it seems inevitable that we are heading for further controversies about how we should pay for the system in the future, and Reform’s suggestion is a useful addition to this debate.