User charges: the debate
Elliot Bidgood, 23 April 2013
Recently, NHS England board chair Malcolm Grant made some comments in the Financial Times that Guardian journalist and King’s Fund fellow Nicholas Timmins described as a “mini-bombshell”: “It’s not my responsibility to introduce new charging systems but it’s something which a future government will wish to reflect [on], unless the economy has picked up sufficiently, because we can anticipate demand for NHS services rising by about 4 to 5% per annum”. Timmins then comments that “[Grant’s] essential proposition – that a future government will have to consider new charges – is an almost self-evident truth” in light of the severe funding challenges the NHS will face after 2015 and historical resistance to two other options – tax rises or a switch to social health insurance (SHI).
I would take issue with Timmins’s claim that SHI would “make no sense” due to the risk of a job tax effect. This is true in France and Germany, but it has not been in the Netherlands, where universal SHI operates on the basis of a regulated individual (not employer) mandate and subsidy system. But in any case, let’s explore user charges.
If opposition continues to SHI or tax rises, charges offer a way to supplement NHS funding. Further, if exemptions are carefully structured (the NHS already exempts people on benefits or income support, under-18s, over-60s and pregnant women from current fees), negative effects on access could be alleviated somewhat. Carry of complementary private insurance, as is common in France for example, can also help with this. The research by The King’s Fund I commented on last week also found that the public may take a nuanced view and support fees for specific examples of luxury or irresponsible use, such as ‘hotel’ services or billing for drunks who burden A&E and ambulance services. Evidence from when fees on GP visits were introduced in Germany in 2004 also showed that fees do reduce demand on health services (though these fees were recently repealed, in part due to discovery of an actual surplus last year in Germany’s world-class SHI system).
However, the debate turns on who exactly stays away and why. User fees have been described as “highly regressive”, especially if structured wrongly, something Timmins also warned about. They may also undercut prevention, making them “penny wise and pound foolish” as a measure. The Commonwealth Fund, while finding other flaws with the NHS in terms of outcomes, has reported that only 11% of “sicker” Britons feel unable to seek medical care for financial reasons, tied for lowest out of 11 nations. Civitas’ cross-party health consensus group recommended in 2003 that in an ideal British social insurance system, the limiting of compulsory user charges would be one of six key features of such a system. Overall, therefore, while a frank debate about funding options and user charges of the kind initiated by The King’s Fund is needed, a switch to a social insurance system remains preferable, in order to retain access for all while empowering patients and driving up standards.