Charlotte Wickens is a Policy Advisor at the King’s Fund.
Nigel Lawson said during the 1980s that transforming the NHS to be more like the health care systems of our overseas neighbours would be jumping ‘”out of the frying pan and into the fire” – but does this still hold true?
With words like ‘broken’ and ‘unsustainable’ being used to describe the health service, and with public satisfaction at a record low, it is little wonder that commentators and politicians are grasping for quick fixes. Some are suggesting the NHS model be scrapped altogether in favour of a radical alternative.
These alternatives include moving to a social insurance model: a system into which employees, employers and the state all contribute to independent ‘sickness funds’ which then pay healthcare providers for people’s care. Others focus on making changes within the NHS, often including how we raise money to pay for it. A common proposal is increased use of charging, such as copying the approach in Sweden, and charging patients to see a GP.
There have been suggestions that the burden on the NHS could be lifted through greater encouragement for individuals to take out private health insurance, or pay out of their own pocket. Or we could follow through with a Health and Care Levy-style hypothecated tax that is earmarked to fund the NHS.
Each of these suggested ‘radical’ alternatives have their own strengths and weaknesses, and they are all used in one form or another somewhere in the world. But they are often sprinkled into the debate without real consideration about how they would operate in the context of this country, and often ignore the fact that there is still significant support for the NHS as a service that is free at the point of use, tax-funded and available to all.
Taking an example already proposed numerous times just this year, including by the former Health Secretary, Sajid Javid, introducing a charge to visit the GP. The reality of implementing this is not simple. Many argue that expanding charges would materially boost the money available to the NHS but, while a £10 charge for the over 300 million primary care appointments a year in England could raise around £3 billion, this wouldn’t be transformative, given that NHS England’s budget for 2022/23 was £153 billion. Exemptions, as we have for prescriptions, would be inevitable, reducing the money raised.
For example, would we expect someone with diabetes to pay every time they have to see a GP? Charging is also talked about in terms of reducing demand. But it is a double-edged sword, since it could stop people seeking health care when they should, especially those on lower incomes. So such a change could end up costing the taxpayer more if the result were conditions being diagnosed at a later stage and requiring more complex treatment.
These are just some of the issues that would need to be addressed – but this level of detail is very much absent from discussions. But crucially, expanding charging or any of the other alternatives would not be a fix for the undoubted challenges that the NHS currently faces. Let’s look at why.
First, introducing some of these alternatives would be a distracting bureaucratic nightmare at a time when waiting lists are through the roof. Take, for example, introducing a social insurance model. Since each country’s interpretation of this model differs, a specific design unique to England would need to be developed, legislated for and implemented, with a lengthy transition required if a new financial partnership between the individual and the state was required. Social insurance is also funded through the contributions of working age adults, rather than drawing from a wider tax base. So, with an ageing society, resources would be drawn from a smaller pool of workers, despite the increased needs associated with these demographic changes.
Second, if the opportunity cost is not enough, there is also no evidence that suggests any specific way of funding health care routinely delivers a better system than any other, despite the assertions of commentators. In fact, what tends to differentiate the performance of health systems is the level of investment rather than the underlying model of funding being used. So from 2010, while the NHS did get real terms year on year funding increases, these were below the long-term average and don’t appear to have been enough to keep up with the increasing number of us who require NHS care.
Third, all the different funding models still need a tax-funded safety net, and if this is not adequately funded and resourced there will be implications for health inequalities. The United States health care system is based on the extensive use of private health insurance, but still provides care for those on low incomes or the older generation through tax-funded systems such as Medicare and Medicaid. The result is that they spend far more than other countries on health but get a ‘meagre return’ on this investment, with worse outcomes and huge inequalities in health between rich and poor.
Finally, and most importantly, there are significant challenges facing the NHS that these alternatives do not help to tackle. None of them would, in and of themselves, increase the capacity of the health care sector – and so there would be no meaningful impact on improving access or reducing the backlogs of care more quickly. They would not result in more beds, diagnostics equipment, or improvements in the state of NHS buildings. Neither would they overcome the significant workforce challenges in the NHS, which require action to boost recruitment and retain existing staff. Likewise, improving health outcomes requires action on the quality of health care and also societal action on preventing ill health, which these alternatives do not guarantee.
None of these ‘radical’ alternatives change the fact that we have an ageing, and increasingly sick population. The number of people living with major illness in England is due to increase from 6.7 million in 2019 to 9.1 million in 2040 and over 2.5 million people are not working because of long-term sickness – and so the cost of funding a healthcare system is only set to increase.
The change needed in the NHS is not a new funding model: the truly radical course would be instead to focus on the reform of social care, prioritising public health, and planning on a long-term basis for things the health service needs like the right buildings, equipment, and technology. So, in the end, I’m with Lawson: these alternatives would produce marginal gains at best, and at worst decades of distraction from the real path back to a stronger health service.