Think Tank debates the future of healthcare funding in the UK. Kirstie Redford reports
Jonathon Whiteley: Is an NHS funded through taxation politically and economically sustainable?
Mike Hall: Some of the fundamental problems lie with the public's willingness to keep on paying more tax. It has a natural limit and if you pass that limit the Government that proposes it becomes unlikable. So politically it's unsustainable to just keep on putting up tax rates. Also, healthcare costs are growing and there's no sign of that stopping in the foreseeable future. Economies go through peaks and troughs, but healthcare spending doesn't and the only way you can make the difference up is to borrow it. This will mean we could get in serious debt as a country.
Jonathon Whiteley: If the current system is not sustainable, which I think we all agree on, what are the solutions?
Les Curson: Clearly you have to get individuals to contribute in some way and I think the Government has to take a total reversal on its current view on the private sector. It has to encourage people to put more money into healthcare through tax incentives. It needs to encourage people to take out private cover. There is no doubt in my mind that sooner or later, whether we're talking five, 10, 15 or 20 years from now, the Government of the day will have to bite the bullet and start to change the way it looks at things, providing incentives for companies and individuals to take out some form of private healthcare.
Adrian Bull: I think one of the most important things is for people to have control over how they spend their money. If we assume tax is going to be a means of collecting a part of the money that's spent on health, then there is a way to allow individuals to take control of how it's spent on their behalf ' involving some sort of voucher system. You could say it costs £1,500 a year per person in this country to provide healthcare, so here's £1,500 ' now you go and place it with an insurer of your choice and they will provide your healthcare for you.
Roger Hymas: Who pays for the voucher?
Adrian Bull: The Government. I think this is where the UK is closest to going and may go even under this Government. The alternative is to say that if you go into hospital for A, and are given a set of treatments or given an operation, this is how much the NHS will pay for you to have this operation, so here's a voucher for that, and if you want to go somewhere else which charges more then you're perfectly entitled to do that ' the NHS will pay X thousand pounds towards it.
Roger Hymas: I think what you've introduced is that the healthcare market is made up of two sides, it's essentially the purchasing side and the providing side, and I think what we are starting to see is the Government innovate in terms of opening up provision to the private sector. We are seeing increasing use of private hospitals by the public sector, and I think this will increase.
Jonathon Whiteley: Should we be looking at the possibility of people being given the choice to opt out of the State system?
Roger Hymas: Unfortunately we have to start from where we are ' which is behind other countries such as France, Germany, the Netherlands and Switzerland. They are in a position where the state, the individual and the employer share the cost of healthcare . We have to try and catch up.
Kirstie Redford: How important is consumer choice in the future of this country's healthcare provision?
Mike Hall: There's not much point giving the consumer choice over funding if you don't give them choice then over where they spend it. We expect and demand choice in every other area of our life, but we have all grown up accepting that we don't have the same choice when it comes to health.
Roger Hymas: But the health insurance market has given people choice ' we gave them PMI. However, 88% of the population have rejected that offer.
Nicola Smith: That's because it is too expensive.
Roger Hymas: Exactly right. So we've got to find ways of enabling people to use a mix of instruments, including NHS vouchers, employers' insurance contributions and individual contributions to go out and buy healthcare. We've got freedom of choice in so many other things we purchase, but we are restricted when we purchase healthcare and healthcare insurance. What we have been doing for 10 years at least is narrowing the PMI choice because we've been reducing the levels of cover in an attempt to make it more affordable ' actually making it less accessible.
Les Curson: The culture of this country and the reason why there's only about 12% take-up of PMI today is partly because of the cost, but when PMI was far more affordable there was still only the same amount of the population with PMI. People have continued having this fixation they should get healthcare free in the UK and the Government is pursuing that line.
Nicola Smith: But in 1927 people were promised a free healthcare option and the Government has never said, 'OK, we are going to retract that promise and now you've got to make provision for yourselves.' Surely no government is brave enough to say that when people are paying 40 % tax and National Insurance.
Kirstie Redford: So what will persuade the Government to change?
Adrian Bull: The electorate.
Stephen Walker: I think more likely big business.
Adrian Bull: I think we need to opt for a system that has relatively easy steps ' a system where the Government says this is what we will pay on your behalf, here is the value we will contribute to your care, you can go and spend that value wherever you want. That sort of principle has to be the next development.
Nicola Smith: But the Government assumes the majority of the population is not able to make those decisions for themselves.
Adrian Bull: I'm not sure that is true because what the Government is proposing for cancer and heart disease is to provide a full list of services available ' including those overseas. This will enable patients, if they've been waiting for treatment for a certain amount of time, to make their own choice about where they can go ' whether private, NHS or indeed overseas. They are proposing to publish regional tariffs of prices ' and they will allow patients to make the choice between NHS hospitals and private hospitals.
Stephen Walker: So are we looking at a system whereby the NHS basically looks after Accident and Emergency and we open up the private sector for other treatment?
Jonathon Whiteley: If we are, then how do we fund the shortfall, because inevitably there will be a shortfall?
Stephen Walker: People can already invest in a health fund and are doing so.
Roger Hymas: Yes and if you actually got tax relief on the second pension ' your health pension ' we would start to get people looking at health funding from a different point of view. Suddenly we will have even more people self-funding. The future is a health funding proposition which isn't just about insurance.
Adrian Bull: But that requires a fundamental change of principle if it is to work. The only way you'll get people to fund their own contribution is if the Government says the NHS is no longer guaranteeing to provide you with whatever treatment.
Stephen Walker: I don't think people believe in the NHS anymore.
Adrian Bull: What I am trying to say is the policy at the moment is for the NHS to provide comprehensive care and that is the promise that has been made by Blair and Brown. To move to any sort of system where there is personal contribution on top of the tax-based contribution you have to have a system which says the NHS will not provide.
Mike Hall: We need a change of political will because at the moment one of the reasons that traditional PMI is not selling is because everyone pays twice, they pay once for the NHS and then they pay again privately to get cover for exactly the same things.
Jonathon Whiteley: So what is the solution to the future funding of healthcare in the UK?
Adrian Bull: We need to see a complete restructuring of the way that the Exchequor uses the funds it has to support healthcare in this country. There are ways in which we can improve PMI and come up with new solutions and we're all working hard to try and do that all the time, but improving PMI now is not going to solve the healthcare problems of this country.
Mike Hall: We need to start with a dialogue between the Government and the private sector because there is no point in us innovating on products if everybody keeps paying twice for healthcare. We need to cut out duplication ' there needs to be a mixture of public funding with private funding to give people choice. I want choice, I want somebody to say there are lots of different ways of paying for health care and here's your NHS voucher to top it up with. The Government has to be willing to talk about how to work with the private sector to make it happen ' if you have one without the other the whole thing falls apart.
Les Curson: The challenge for the healthcare industry is to try and find a way of changing the Government's attitude and how the public at large thinks about private healthcare. People still think it can be funded by taxes, but that is nonsense ' it will never be the case. It may take a number of years before this happens, but eventually they will have to have a change in attitude.
Stephen Walker: The NHS is a failed system ' it isn't retrievable ' the Govern-ment is throwing good money after bad. We need to look at systems that work and come up with a strategy of how we can put a process of change in place.
Roger Hymas: It all comes down to money ' and there's not enough from the public sector ' so it will have to come from somewhere else ' from individuals.
Kirstie Redford: There has to be a partnership between the private sector and the NHS and the first step towards that has to be communication. The only way that can happen is if the Government is transparent about where money is going. The electorate has to take a stand. The public has to realise that the promises the Govern-ment is making are not coming to fruition, that the money is not going to the right places. Unless we can achieve this change in attitude, introducing new ways to fund healthcare are going to be very hard to achieve.
Nicola Smith: We need honesty from the Government and for them to work with the industry on solutions to create new ways of funding healthcare. It should also be rewarding people who are already paying for their own healthcare to encourage others to do the same.
Kirstie Redford is editor
