Dear Julia Neuberger
23rd January 2000
One influenza outbreak too small to describe as an epidemic, and the NHS was once again in a midwinter crisis. A service that was the envy of other countries when created 50 years ago cannot meet the demands of the 21st century. Britain has changed out of all recognition since Aneurin Bevan launched his free health service in 1948. Then, life was still a struggle for most people, home ownership was for the few and 40 per cent of houses had no bathroom.
After the war, rationing was accepted to a degree which most people today would find staggering-because it provided better nutrition for most of the population. Healthcare free at the point of use was also a good way to make sure that it reached most people.
Today only the health service is rationed in Britain. Even those in the bottom 20 per cent of households enjoy standards of living which would seem luxurious to a working class family of the late 1940s. It is not just housing free of damp, with central heating and proper bathrooms that are the norm: washing machines, freezers, telephones and video recorders are found in more than three-quarters of homes in the bottom fifth of the income distribution.
Yet we persist in believing that unless the NHS is provided free at the point of use, people will suffer. The only alternative appears to be private insurance, which offers a limited range of treatments and is too expensive for most people unless subsidised by employers.
Britain is one of the richest countries in the world. Rich societies spend more on health. Once the basics are taken care of, people want to raise the quality of their lives. We are already spending our own cash on buying over-the-counter medicines, alternative therapies, designer spectacles and cosmetic surgery. The challenge for policymakers who want to raise healthcare spending to the EU average is to find acceptable ways for people to pay more for mainstream treatment.
I believe this can be done best through charges for using the NHS. The amounts should be modest-on a par with what people spend for a meal in a fast-food restaurant, a round of drinks in a pub or a trip to the cinema. But they should not be too modest, or they will be swallowed up by the cost of collection. The package I propose could raise half of the ?12 billion gap between health spending here and the EU average.
For example, a ?10 fee for seeing a doctor would raise ?3.3 billion a year. Asking everyone not on means-tested benefits to pay the ?5.90 prescription charge would bring in another ?800m. "Hotel charges" for staying in hospital-?25 for day surgery and ?50 for a longer stay-could raise ?300m a year. Patients should also pay a percentage of the cost of non-emergency operations up to a set limit such as ?250-as they do for dental treatment. Extra services could be offered at a cost, such as video recorders in hospital rooms.
The amount collected would shrink if there were big exemptions, as now with prescription charges, where 85 per cent of items are free. Restricting exemptions to those on means-tested benefits would be easy to administer. At present, everyone over retirement age is exempt from prescription charges but this is poor targeting-20 per cent of pensioners are well-off. Children should also lose exemption: they are as likely to be in households above average income as below it. People who are not exempt could cap the amount paid in charges by buying a season ticket. All charges could be covered by a payment of ?150 a year for a single person or ?400 for a two-parent family.
Robert Winston's attack on the government portrayed the choice as between higher public spending-financed by tax rises-and private insurance. This is a false choice. Public opinion may now favour tax increases to boost the NHS. But it is difficult to imagine support for the 5p increase in the basic rate, needed to achieve the EU average by 2006.
Private insurance is also unlikely to be the answer, as can be seen in countries such as the US and Chile, where insurers select the healthiest individuals and reject those with chronic illnesses, leaving a group of people who cannot get insurance at reasonable cost.
If we continue to rely on an underfunded NHS financed from taxation this could be the outcome for Britain. At present, only about 13 per cent have private insurance-such a small number that we can still claim to have a universal health service. But as incomes continue to rise, more people will be able to afford to pay the premiums. Then there will come a point at which insurance moves from being a luxury to being a necessity-with the NHS left as a rump service offering second-class care to those who have no choice but to use it.
John Willman
Dear John Willman
24th January 2000
No one can deny that the NHS should do a better job of managing peaks in demand for its services. But we need to get some facts straight before charging in (literally).
Britain is, as you say, a rich country, but perhaps not as rich as you think. In terms of GDP per head, Britain ranks 11th out of 15 EU countries-about the same as Sweden, and higher than Greece, Portugal and Spain. Over the past 50 years we have seen average living standards improve greatly; but averages hide wide differences in income distribution and poverty is still with us. The fact that many people have access to a video recorder does not make them rich (or able to afford the healthcare charges you propose).
But, given our wealth as a country, we spend less than you might expect on healthcare-some 18 per cent less per head compared with the EU average. So, although most other countries want to spend less, perhaps healthcare spending in Britain could be higher-opinion polls confirm that people do want to spend more.
Before looking at your plan to increase spending, I want to clear up the impression that it is only the NHS that is rationed. Markets are also rationing systems which use price as the rationing mechanism. All goods and services are rationed. If I want a car I cannot afford, I am subject to rationing by the car market. We may accept this form of rationing for cars, but most people in this country do not accept it for healthcare.
And so to charges. Charges and prices are one and the same: both raise revenue and both deter consumption. And while we accept prices/charges in many areas of our life, there are other areas-such as healthcare, defence, policing-where we find that the social costs of such a rationing mechanism are too high.
In calculating the revenue to be raised from increasing the scope of charges in the NHS, you fail to allow for the deterrent effect such charges would have. For example, a ?10 charge for visiting a GP is unlikely to raise ?3.3 billion (which seems to have been arrived at by multiplying ?10 by the number of current GP consultations). Some people will be deterred-and some will suffer. How much suffering are you prepared to accept?
What about the evidence on the impact of charging for healthcare? In Sweden, which has charging, surveys indicate that between 20 per cent and 25 per cent of the population did not seek care at least once in a given year, for financial reasons. Low income groups were worse affected. In Britain, it has been estimated that while the increase in prescription charges between 1992 and 1993 raised an extra ?17m, it also had the effect of reducing the number of prescriptions cashed by 2.3m. Would all of these prescriptions have been for frivolous conditions? It seems unlikely.
One of the most telling pieces of research on charging is from the US. A controlled trial by the Rand Corporation showed that charges not only deterred take-up of services, but also led to poorer health-especially among the poor. If underspending is the problem with healthcare, charging is not the answer.
Julia Neuberger
Dear Julia
26th January 2000
Debates which focus on the meaning of particular words are tiresome, but your use of the concept of rationing is misleading. Healthcare in Britain is rationed in the same way as food or petrol was in wartime: the government controls the supply and allocates it to regions and districts. Cars are not rationed in this sense: the government does not set the numbers supplied, nor allocate them. And to say that food or clothes are rationed because we pay for them conflicts with most people's understanding of the word.
Although most of us can't have all the consumer goods and services we want in a market economy, we can adjust our spending priorities to buy those we want the most-that car, for example. But I can't (unless I'm very rich) adjust my discretionary spending to get treatment such as kidney dialysis if the government refuses to make it available. Healthcare is rationed in the sense that it is the government which allocates it, not my spending decisions.
In fact, Britain spends less on dealing with renal failure than almost every other European country; and the consequence of this rationing is death. That is an extreme case, but we have seen in recent years how drugs which can prolong life are denied to patients, and how treatment for cancer and other diseases lags behind other countries.
Queues are one way of rationing limited resources. My proposal for limited charges is designed to make more resources available to reduce rationing and queueing. The charges I propose are well within the reach of most people in a society where real incomes are three times higher than in 1948. It is absurd for people to wait in queues for life-saving treatment when they spend an average of more than ?700 a year on television, videos, hi-fi and other forms of entertainment. Football fans pay about ?300 for a season ticket; a similar amount is spent on pets by their owners. The average cost of a holiday is ?850, and more than ?2,500 for a holiday abroad.
Your point about averages and extremes is correct, which is why I would exempt from charges those on incomes low enough to qualify for means-tested benefits. But many people even at the bottom of the income ladder have discretionary income which could be spent on healthcare. The poorest fifth of households spend ?4.75 a week on tobacco, ?4.65 on leisure goods and ?9.75 on leisure services such as holidays, gambling and entertainment.
Most European countries have charges for using publicly-funded health services, without detriment to the health of lower income groups. You mention Sweden, which has always charged between ?10 and ?20 for visits to the doctor, with no exemptions. The survey you quote found people who said that the charges stopped them using health services, but did that harm their health? In other words, were the services which would have been consumed necessary? Health inequalities-the difference in health between rich and poor-appear to be lower in Sweden than in Britain, where treatment is free at the point of use.
One of the benefits of charges is that they do limit usage. This might help to reduce the ?500m a year cost of missed appointments. Doctors might also welcome seeing fewer "frequent attenders," the small minority of patients who tie up doctors' time to no good purpose.
Prescription charges have reduced the number of items dispensed, but there is no evidence that the nation's health has suffered. The same is true of charges for dentistry and eye-tests: general health continues to improve and there is a better range of services on offer.
Interestingly, it is the poor-who are exempt from existing prescription charges-whose health has improved least in recent years. Which brings us to the US study you refer to-the only large-scale experiment into the effects of charges on healthcare over a long period. This indeed found that charges reduced the use of health services (although not in hospital admissions for children). But the reduction in use "had little or no net adverse effect on health" for most people.
Charges did have an adverse effect on what the researchers called the "sick poor," about 6 per cent of the population. But these are the people the NHS already fails, even though it is free. Poor people are ill more often and die sooner, and the gap in health between rich and poor has widened in the past 20 years.
So exempting the poor from charges would not be enough. If we want to tackle the health of the poor, we must pump more money into targeting those who fail to take advantage of the free NHS. Screening for high blood pressure, free eye-tests and dental checks need to be launched on the housing estates of those most at risk. This cannot be done without more money. Charges could make a contribution, as they do in much of the rest of Europe. By the way, how would you propose to raise the ?12 billion a year needed to bring NHS spending up to the EU average?
John
Dear John
28th January 2000
Your definition of rationing boils down to who takes the rationing decision: individuals in the case of markets, governments and doctors in the case of the NHS. You agree that the end result of either process is a potential limit on consumption which may be below that desired by individuals. So, while I may be able to adjust my personal spending priorities within a market, there will still be things I don't consume-and would like to-because of the limits of my income. In the NHS, the collective decision-making of the government, department of health, doctors, and so on, may decide a set of spending priorities which also means that I may be denied care or have to wait for it.
So who decides the priorities? It could be that I would be readier to accept the outcome of a rationing process over which I felt I had more control-the market. And one answer is to privatise the rationing task: get rid of the NHS and leave all decisions about healthcare to individuals who will juggle their spending priorities as best they can-perhaps trading off their video recorder (your symbol of unnecessary consumption) against healthcare.
This is not a solution either I or, I suspect, you, find acceptable. There are other ways of involving people in decisions about priorities in the NHS such as citizens' juries. And health authorities increasingly consult their populations about services. You may take a cynical view about these efforts, but they are genuine attempts to reduce the gap between priority setters in the NHS and users of the service.
There is an empirical, rather than ideological component to arguments for and against charging. I quoted some of this evidence-which indicated that charges tend to reduce access to healthcare. But you are right to note the dearth of evidence on the impact of charges on people's actual health. The Rand study in the US did in fact find some evidence of a detrimental effect of charging on health-those subject to charging had significantly raised blood pressure levels, for example. But the absence of evidence is not the same as evidence of absence. At an absolute minimum, therefore, any proposal to widen the scope of charges in the NHS should be subjected first to a trial of its impact on health.
While you stress the bulging wallets of the poorest fifth in Britain who fritter away their money on non-essentials-a view usually correlated with those for whom ?10 is small change-you do acknowledge that some people need to be protected from your charging scheme. Why? You claim that there is no evidence that charges do any harm to anyone's health. Clearly you are not wholly convinced by your own case.
Further, you present your charges as flat rate payments (with some exceptions). If we want more money for the NHS-and given that the rich are more able to afford charges than the poor-why not link charges to ability to pay? Everyone without a job (the retired, the unemployed) can be excluded, and the charges can be collected in an efficient way-through the PAYE system, perhaps. Does this sound unreasonable? Does it not also sound familiar?
The fairest and most efficient way to raise more funds for the NHS is through taxation. None of us likes paying tax any more than we would like paying your suggested charges, but unless we are to abandon our commitment to fairness in funding, payment through a progressive taxation system is the way forward-not a flat rate and regressive charge.
Julia
Dear Julia
31st January 2000
I am finding this exchange frustrating. I put forward ideas backed by facts and figures. You refuse to engage with them, preferring to caricature my position in a rather patronising way.
You refer to me stressing "the bulging wallets of the poorest fifth...." All I have said is that most of us can afford to make modest contributions to our treatment which would significantly boost the NHS budget. As for those video recorders, almost 90 per cent of British homes have one costing somewhere north of ?300; those same homes buy blank tapes at three for ?10; and think nothing of spending ?6 to hire a couple of films on a Saturday. Are you saying that most people can't afford to pay ?10 to see a doctor? Or that pensioners on above-average income need free prescriptions?
The best way to undermine the NHS as a more-or-less universal public service is to starve it of cash in a society where increasing numbers can afford private insurance. Citizens' juries and focus groups won't stop people noticing that they are being denied treatment or kept in lengthy queues in a society where responsive and varied services are on offer in most other fields. Do you think private insurance can go on growing without the NHS being increasingly seen as a second-class service?
You talk about "unfairness" but fail to respond to my point that the present tax-funded system produces health inequalities greater than in countries with charges. Of course I can't guarantee that there will not be someone deterred by charges from seeking necessary treatment. But you can't guarantee that no one now is missing necessary treatment because the NHS hasn't enough money.
Sure, every health service around the world has felt the pressure of the winter flu. But the NHS has problems all year round; a four-hour wait in accident and emergency is common-unlike in Canada, France or Germany. The health service does the best it can with limited resources, but it is an over-stretched system offering limited care, often in unpleasant surroundings. Do you really think that income tax will be raised 5p in the pound to provide the ?12 billion needed to raise British spending to the EU average? In any case by the time Britain has reached the EU average of 8 per cent of GDP, Europe will have moved on to 9 per cent or 10 per cent. And why not, if it prolongs life and raises its quality? Health is the only important item we spend money on that policymakers want to restrain-yet it creates jobs, sucks in few imports and is less exposed to the economic cycle than more frivolous acquisitions such as videos.
We do not need an experiment to see whether charging works. We've had one-with the imposition of charges for prescriptions, eye tests and dental treatment. Despite attempts to find evidence of detrimental effects, there is none. Dental health has continued to improve. There are now more eye tests than when they were free.
One way or another, people will spend their rising incomes on health. I want them to do it through charges rather than insurance premiums.
John
Dear John
3rd February 2000
My point about "bulging wallets" was to suggest that while most people can afford ?10 for a visit to their GP, some cannot, and will reduce the number of visits they may have made in the absence of the charge. And why resort to a regressive tax as a means of raising revenue when we already have a (mildly) progressive tax which could do the job better?
Your assertion that "the present tax-funded system produces health inequalities greater than in countries with charges" surprises me. Where is the international evidence that has disentangled all the factors (lifestyle, income levels and so on) to reveal that charging positively contributes to less inequality in health? I know of none. What I do know is that even on average, Britain has a lower maternal mortality rate than the US, Switzerland, France, Denmark, Holland and Luxembourg. We also have lower infant death rates than countries with charges-the US, Ireland, Belgium.
Such statistics are difficult to interpret, however. And as I have said, there is a dearth of conclusive evidence on the effects of charging. But the evidence, which John Appleby (of the King's Fund) has analysed, suggests that charging to raise revenue damages healthcare use and the health status of the poor and ill.
The NHS is not perfect-people die because of lack of resources. Charges would not change this. But if not charges, then what? Much is made of the contradiction between survey evidence of the public's willingness to be taxed more if it is spent on healthcare, and their reluctance to vote for parties committed to this. Well, the current government has committed itself to a substantial increase in funds for healthcare. No one, as you say, likes paying taxes (and charges are likely to be even more unpopular), but one way or another there is a desire to spend more. Perhaps we had all better start facing up to the economic (and tax) realities of our desires.
Julia
