"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Monday, 13 July 2015

NHS Funding Inquiry

Lord Patel, a Crossbench peer and Obstetrician, on the 9th of July moved a debate in the House of Lords over the "sustainability" of the NHS. In effect, this was the House of Lords debating whether taxpayer funding of the NHS was a good idea. Predictably, the debate was mostly filled with anecdotes from people who appear not to realise that their one anecdote is just one treatment out of the 18 million that are performed every year and is thus not representative. Also predictable was that the Tory peers who spoke acknowledged the need for taxpayer funding but expressed their favour of having an inquiry to bring in insurance or user charges.

At no point during the General Election was there any suggestion that any political party would change how the NHS was funded, the "sustainability" of NHS funding was not, and still isn't in doubt. The service is funded by general taxation and if it needs more money, more money is found from taxation. At the budget the Chancellor promised an extra £8bn - not enough, but it shows that taxpayers can afford to pay more if there is the political will. So why the debate?

I suspect it is more to do with the Junior Minister who represented the Government in the debate than with Lord Patel. The minister, Lord David Prior, is a former Tory MP and deputy Chair of the party, and was the previous chair of the Care Quality Commission. Prior is a loose cannon, who is well known for wanting to extend private provision in the NHS:
"We need more competition to drive up standards of care; more entrants into the market from private-sector companies, the voluntary sector and other care providers"
This makes him useful to the Government because he can be expected to initiate the sort of debates that no one has voted for, and where better than in the House of Lords, which no one has voted for? Lord Patel is a Crossbencher and so is not restrained by party political strictures. This meant that he was able to ask a question that party politicians cannot ask - can we fund the NHS in ways other than taxation? The right-wing Prior saw Lord Patel's debate as an opportunity.

The NHS principles that have (mostly) stood firm since 1946 are summed up in clauses 4 of Command Paper 6761:


That is, the NHS is available to everyone, whether or not they can afford to pay user charges, or whether they are insurable. This says quite clearly, that the NHS cannot be funded by co-pay or health insurance. The question about whether the NHS could be funded through user charges or insurance is answered here: No it shouldn't.

The Conservatives, as can be expected, were far more in favour of moving away from tax funding. For example, Lord Cormack, while acknowledging that the NHS would need more money, would not even countenance a tax rise:
"All forms of funding must be looked at. We have to have a plurality of funding if we are to have a sustainable NHS. Whether the extra funding comes from compulsory insurances or certain charges matters not, but it has to come—we have to have a quality service that does not lurch from crisis to crisis, from one application of sticking plaster to the next. It is crucial that we attain that."
Matters not!? As a true Tory, he says that the funding should not come from taxing the rich, but instead from taxing the sick.

More disappointing were the contributions from Labour peers. Lord Warner is well known for being in favour of the private sector and even suggested in his speech that "failing" providers should be privatised. On the issue of NHS funding he said:
"Our tax-funded, largely free at the point of clinical need NHS is rapidly approaching an existential moment. The voices of dissent and outrage will no doubt be deafening but a wise Government should begin now the process of helping the public engage in a discourse about future funding of the NHS."
This is hardly an endorsement of the tax-funded system, indeed, he appears to suggest that the government should "help" the public to think of other ways to pay for healthcare. Another Labour peer, Lord Desai, even made the bizarre suggestion that people should be issued with an "Oyster card" which is deducted whenever a patient uses healthcare, and patients should receive a "bill" at the end of the year:
"Another suggestion that I have made before in your Lordships’ House is that, although we do not want anyone to feel that they are being charged for using the health service, we ought to make clear to people the cost of providing it. People think that because it is free, it is costless—but it is not. We often worry about people missing GP appointments, so I propose a sort of health Oyster card for every citizen. Every time they used the National Health Service, they would have to swipe their Oyster card and a certain number of points would be deducted. The Oyster cards could be recharged. At the end of the year, people would get a bill showing how many points had been used and on which health service facilities. If people missed a GP appointment, 15 points would be deducted rather than two—things like that. Perhaps something like that could be done to make it clear to people that a free National Health Service is not a costless one. If we can somehow get people involved as patients and potential patients so that they modify their behaviour in demanding healthcare, it may solve some of the problems of the National Health Service."
This is another version of  Jeremy Hunt's daft suggestion to put the price on prescription medicines, a policy expertly dismissed by Roy Lilley recently. The problem with the NHS is not unnecessary demands, it is the sheer magnitude of people who need healthcare. An "NHS Oyster card" will not reduce the number of elderly people with acute co-morbidities. And if "consumer demand" is a problem, the solution is to turn patients back into patients rather than healthcare consumers, and remove the market.

Prior, summed up the debate by saying that he was personally in favour of a taxpayer funded system:
"However, I have listened to the debate and the strength of feeling about whether we should take a longer-term view that goes way beyond this Parliament. The sustainability of the health service is an issue that extends out 20 years, probably, but it is one that every developed country faces. I would like to meet the noble Lord, Lord Patel, and maybe two or three others, to discuss this in more detail to see whether we can frame some kind of independent inquiry—I do not think that it needs to be a royal commission. We are not short of people who could look at this issue for us; there are health foundations, such as the Nuffield Trust and the King’s Fund. The issue is: what will the long-term demand for healthcare be in this country in 10 or 20 years’ time? Will we have the economic growth to fund it? 
At heart, our ability to have a world-class health system will depend on our ability to create the wealth in this country to fund it. I am personally convinced, having looked at many other funding systems around the world, that a tax-funded system is the right one. However, if demand for healthcare outstrips growth in the economy for a prolonged period, of course that premise has to be questioned."

The statement at the end is a curious one, suggesting that he is not wholly convinced because he would support other funding mechanisms if the state of the economy demanded it. (An odd statement to make because it implies that if the country goes into recession, and people lose their jobs and have to spend less, he would be in favour of taxing the sick through health insurance and user charges.)

However, Prior goes way above his station by declaring an inquiry on an issue as fundamental as how the NHS should be funded. If Jeremy Hunt, George Osborne or David Cameron had suggested such an inquiry I would express my opposition, but at least those politicians hold significant positions in the government and have the power to order such inquiries.

But why is a junior minister, the "Under Secretary of State for NHS Productivity", announcing an inquiry in an area that is outside of his remit? I suggest the reaction of the Press is the reason: this inquiry has not been reported in the mainstream media. If the Health Secretary, the Chancellor, or the Prime Minister had announced such an inquiry it would have been on the 10 o'clock News, the front pages of the national newspapers and there would have been a whole Newsnight devoted to what the inquiry will be looking at. Because a little known minister announces such an inquiry, the media are not interested, and so something as fundamental as the funding of the NHS will go ahead without any public scrutiny.

There is one final point to be made. Prior says:
"We are not short of people who could look at this issue for us; there are health foundations, such as the Nuffield Trust and the King’s Fund."
Indeed. The Kings Fund has already carried out such an inquiry, it was called the Barker Review. Barker says:
"We looked hard at the question of introducing new charges into the NHS. However, most options for charges seem likely to raise administrative problems and the risk of adverse impacts, which make them unattractive."
Barker rejects any idea of user charges, did any of the Lords in Lord Patel's debate mention this? Further, Barker suggests that the gap in health funding should be met by more taxes, not fewer:
"We make two suggestions to close this gap, although clearly there are others. The first is a review of wealth taxation, including inheritance tax, which is too frequently avoided. The second is a package of increases in National Insurance, affecting those over 40 (who will be considerable beneficiaries from the new settlement) and the higher paid."
It is interesting that the Chancellor has removed the ability to raise taxes through inheritance tax by raising the tax threshold in the Budget, and he has cut some National Insurance contributions. In other words the very things that Barker says should happen, Osborne does the opposite. On can conclude Osborne is likely react similarly to Barker's opinion on user charges.

The government already has a detailed report into NHS and social care funding, one which recommends raising taxes. Rather than acting on this report, Prior (taking an action which few people would regard him as authorised to do) orders another inquiry, this time using people he has chosen and presumably people who will produce the desired result.

4 comments:

  1. Richard, interesting analysis of the sustainability debate but do you think there should be a wider debate on procurement within the NHS? What do you think of Lord Carter's approach which is in the news today?

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