NHS funding – thinking the unthinkable

October 24, 2014

Health serviceLast week saw controversy over the NHS policy of now providing GPs with an extra payment of £55 for each diagnosis of dementia they make. The intention of this appears to be to reduce under-diagnosis of this condition, in the face of increasing pressure on frontline services.

The controversy it arouses is understandable: shouldn’t GPs be carrying out these diagnoses effectively under current funding of their work anyway? Does it not introduce the danger of over-diagnosis of the problem, generating even more unnecessary work for an NHS service already creaking at the seams?

These concerns seem well founded. To my mind, they highlight both a funding problem and a potential solution for future NHS strategy in England.

£30bn funding deficit by 2020?

Last week also saw publicity about a steeply increasing deficit in NHS funding. The new boss of the NHS, Simon Stevens, said that an annual £8bn increase in funding for the NHS is needed on top of planned cost savings. This will address what he sees as a £30bn deficit which would come about by 2020 under present funding. Jeremy Hunt, Health Secretary, said this week that the Government, if re-elected, could provide the necessary funding, provided that efficiency savings were met.

The funding crisis appears to have arisen as a result of an increasingly unhealthy and ageing population. We now have more obese or overweight people with potential chronic health conditions, and more people are living longer, ironically partly because of better health services. The NHS head, Mr. Stevens, sees the need for effective prevention measures to reduce illnesses, but still sees the funding crisis looming.

Underlying all this is the Holy Grail which Mr Stevens refers to: a free National Health Service at point of delivery. He points to “the immeasurable value of living in a society where you, your family, your neighbours can get high quality, modern care without having to worry about money when you’re already anxious and in pain”.

The alternatives seem to be either the privatisation of some services, with a potential danger of reduced quality and delivery, or ever-increasing funding of our ‘free’ health service. Both of these seem unsatisfactory. We shrink back from the reduction of health services to another private enterprise approach that might let us down, as private banking, for example, has in recent decades.

Equally, good health services seem to generate an ever-increasing need for funding to meet ever-increasing demand. But good services need to be properly funded.

A mixed funding approach is feasible

A third alternative is available, steering a careful course between the dangers of an enterprise approach on the one hand, and ever increasing demands on public funds on the other. That is to adopt partial charging for services, like many of our partner countries in the EU. The Chief Executive of NHS Confederation this week called this “thinking the unthinkable”.

But this mixed funding approach is clearly thinkable, and even feasible.

An objection might be that having to make some payment towards their treatment would reduce people’s willingness to seek it, but this can easily be dealt with. People who are dependent on benefits could receive a subsidy or additional benefit to cover the cost of chargeable treatments or GP consultation visits, for example. After all, we are in an efficient financial situation: the EU is asking that Britain pays an addition £1.7bn because of our improved economy. So we do appear to be in good shape to cover the costs of our more disadvantaged families if partial charging were to be introduced.

In support of this partial charging is the fact that most of our European partners already do it, and their health services don’t appear to face to the same degree of funding crisis we have here in Britain. The French health care system was ranked number one globally by the World Health Organisation (WHO) in 2000, and consists of a mixed provision, with charging for some frontline services. This, however, is supported by health insurance provision for citizens. Italy came second in the WHO ranking, and again has a partial charging policy. These countries don’t just have cost-efficient services, but also higher than average life expectancy. Germany too has a mixed model of provision, funded through individual health insurance systems. OECD data in 2011 showed that Germany had low and decreasing infant mortality and the eighth highest ratio in the world of practicing physicians per capita at 3.3. A US Commonwealth Fund report in 2010 ranked the Netherlands as top among seven countries in health care provision. The report looked at five measures of healthcare – quality, efficiency, access to care, equity and the ability to lead long, healthy and productive lives. Not surprisingly, the Netherlands too has part-payment for healthcare through private insurance provision.

Modernisation and raising standards

So, the mixed economy of care, with contributions by those who are able, seems to work well for our neighbours. I think it is a viable option which should not be rejected out of hand as Mr. Stevens appears to do. The “immeasurable value” of a service which is free at point of delivery is a torch which is burning our hands because we are politically unprepared to set it down. Instead, we should reconsider the steadily increasing, immeasurable disvalue of an all-consuming free service which does not seem to deliver the good public health which other countries, with other approaches, appear to be able to deliver.

An overall benefit would be that we would avoid the absurdities of trying to manipulate diagnoses of illness by providing incentives to GPs to increase their rate of diagnosis. This artificial approach must surely be rejected as the symptom of a malfunctioning system. We need to face the need to modernise, to eliminate the escalating funding crisis, and provide public health to the standards of our neighbouring countries. These countries appear to be able, in most cases, to get it right.

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Tony Clarke

Scottish Care Inspectorate Specialist


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