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Insight paper

Funding health care in England: Has the case been made for changing the NHS model?

The NHS’s recent travails have led once again to claims that the model is “broken” and that the answer is to change how health care is funded.

A concept of NHS funding with £20 pound notes and pound coins and an NHS lanyard
Eighty per cent of people believe the NHS should “definitely” or “probably” remain free of charge, according to the British Social Attitudes Survey.

NHS waiting lists in England are at an all-time high. Waiting times are also, for too many people, far too long. Hospitals are crumbling, there are staff shortages and general practice is struggling to meet demand. The service is still beset by industrial action over pay. Public satisfaction with the NHS as measured by the British Social Attitudes Survey is at the lowest since the series started in 1983. 

Despite all that, the same survey shows that public support for the NHS model remains remarkably high. Eighty per cent believe the NHS should “definitely” or “probably” remain free of charge, available to all and primarily tax funded. Just 6% say that it should “definitely” or “probably” no longer be free at the point of use. 

The NHS’s recent travails have however led once again to claims – including from past and recent health secretaries – that the model is “broken” and that the answer is to change how health care is funded in England. Options range from charging for GP appointments to a full switch to a social insurance model similar to that of France or Germany. 

However, advocates have yet to spell out just what such a move would involve – and how far, if at all, it would meet the challenges facing the NHS, financially or otherwise. This paper addresses some of those gaps, and finds that:

  • Though a £10 charge for the 350m GP appointments a year in England would nominally raise £3.5bn – that figure drops sharply once exemptions are factored in.
  • Carrying some exemptions over to the new model is unavoidable, but politically delicate. Currently just 40% of the population pays for prescriptions, but the remaining 60% includes many of the heaviest users of health care – such as the over 60s and those on low incomes. 
  • A switch to social insurance, being based on employer and employee contributions, would mean fluctuating funds depending on the state of the job market: France has repeatedly had to top up its health care funding through general taxation. 
  • It would also be administratively complex, requiring fundamental changes to the tax system. As health care is devolved, and the current governments in Scotland and Wales are unlikely to match the switch, there is also the question of how the systems would interact. 
     

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