The Funding of Healthcare in the UK - MMG Newsletter - April '02

The funding of the NHS and health care is a hot political topic and obviously one of  particular interest to medical marketers.  Those of us who have waded through Wanless may be surprised that it recommends continued funding through general taxation with central Government control. This is despite the evidence that our health care delivery and treatment outcomes are at far lower levels than our colleagues in other EU countries, who use other systems.

There are many problems with general taxation and central Government control:

  • High taxation is unpopular and any Government imposing it doesn't last long
  • Health care funding has to compete annually with other financial pressures on the Treasury
  • Government control over bureaucratises and politicises the NHS and does not allow it to be managed properly
  • The consumer cannot judge value for money as cost, quality and outcomes are not measured
  • Consumers are in a weak position and there is little choice for patients
  • The poor and inarticulate get worse health care
  • It doesn't work - supply and demand have never balanced in the UK system.

At a recent meeting on health care funding two leading health economists reviewed the European systems of funding and both advocated the social insurance model of funding such as can be found in Germany or France.

In this system funding is much higher than in the UK and is part by taxation and part by private health insurance.  Importantly both employers and employees contribute a fixed percentage of wages/income. This is shown as a separate item on their salary slips, so everyone knows how much they are contributing. The money then goes to a independent non-Government body and not the Treasury. Most people also have private health insurance, although the poor are well cared for. Regional boards or local councils manage local health care. Patients can choose where and by whom they are treated. Provision of health care is split between private and public sectors. There are no waiting lists. Adoption of new technology is quicker. There is no central Government control the system is better managed with less bureaucracy and political involvement.

There is no doubt that we need more funding for the NHS and this Government has been spending a great deal more of tax payers money on this. However, we are not seeing any real benefit in increased activity partly because funding of social services has been reduced causing bed blocking. Centralised control persists - the Secretary of State for Health will personally hold budgets for new PCTs and will withhold funds if targets are not met. We do not know how much we are paying, costs of service or measure outcomes, although the data are available. Instead NHS managers are forced to play games with politically derived measurements in order not to become scapegoats. Our health and treatment remain well below standards and service levels in other EU countries.

Is it not time we had a change? As the fourth largest economy in the world shouldn't we have something better?

Ginette Camps-Walsh
Chairman