“An illusory technical excape from spending choice”, “a fourfold revolution is required”, “clumsy and unreliable”…

It was Bismark who first created a safety net in social care in Europe. Not Aneurin Bevan, who was some 50 years later. Letters to the editor, in the Times 24th March 2018, tell us the truth. But our politicians, and therefore the public will not listen, and the dissonance is leading closer and closer to civil unrest. There are few people who know more about social care provision and funding than Mr Frank Field MP, and there are few people who understand the funding and problems facing the health service than Mr John Appleby, formerly of the Kings Fund, and now of the Nuffield Trust. Few people understand the economics more than Kristian Niemietz of the Institute of economic affairs. Despite this the Liberal party is committed to a hypothecated taxation increase…. At it’s best a short term “finger in the dyke” policy, but at worst something which could lead on to an impossible dilemma for a future chancellor. We have to ration honestly and overtly.

Funding reforms for health and social care

Sir, The much-needed reform programme in health and social care must extend beyond the remedy you suggest (“National (Health) Insurance”, leader, Mar 22). Analysis I commissioned from the Commons library indicates that, in 2020, the combined deficit for health and social care in England will reach £9.1 billion.

A fourfold revolution in the national insurance system is required to meet both the immediate and the longer-term funding challenge. First, a penny increase in national insurance contributions would eliminate the short-term deficit. Second, that initial tranche of new funding must herald the creation of a national health and social care mutual that sets future contribution levels, governs the long-term financial framework for those services, and educates contributors on the costs of health and social care.

Third, extending national insurance contributions to people of pensionable age who are still in work would meet part of the funding gap in social care. Finally, the system should become more progressive. Those earning less than £11,000 a year should gain exemption from national insurance, with a starting rate of 10 per cent for middle earners and higher rates further up the scale.
Frank Field, MP

House of Commons

Sir, It is true, as your leading article says, that the NHS needs more money than the present plans offer. By 2021, NHS spending will have fallen by around 0.5 percentage points of GDP compared with ten years earlier. Hospitals are in deficit, services are being rationed, and there is still a shortage of NHS staff.

However, creating a ring-fenced NHS tax would put the spend-tax decision back to front. It might appeal to politicians faced with the tough sell of persuading voters to accept tax rises but pegging NHS funding to a dedicated tax would mean that NHS spending would fall when the tax take fell. The hard truth is that if we want to fund the NHS properly we first need to decide what we want to spend, and then how we raise the tax in a fair and efficient way. A ring-fenced tax provides an illusory technical escape from this spending choice, nothing more.
Professor John Appleby

Chief economist and director of research, Nuffield Trust

Sir, The idea of a national health insurance contribution — ie, a hypothecated NHS tax — sounds superficially attractive. We may disagree on the right level of public spending, and on how that money should be spent, but there is near-unanimous support for higher spending on the NHS. Hence, why not link a tax to a popular cause? The problem is that hypothecation has been tried many times and is mostly a book-keeping illusion. A pound of tax revenue is a pound of tax revenue — it does not matter where it comes from. There is no way to ensure that revenue from a “health tax” really is spent on healthcare.

A health tax would be a clumsy and unreliable way to achieve what continental European social health insurance systems achieve effortlessly and reliably. In those systems, your contributions go directly to the health insurer of your choice, not to the government. Those systems work. Why not go the whole hog and replace the NHS with a system of that kind?
Dr Kristian Niemietz

Head of health and welfare, Institute of Economic Affairs

Is Hyporthecated tax a solution, or a distraction? NHSreality is clearly against, but it looks as if we are all going to “share” a lot more..

Update 27th March 2018:

Sir, While news of potential extra funding for the NHS is welcome (“Hunt urges 10-year deal to fix ‘crazy’ NHS budget”, News, Mar 26), it will not solve the complex web of problems crippling the NHS. After 70 years the NHS needs an overhaul. The medicalisation of essentially social problems must be addressed to significantly reduce the demands on GP services and A&E departments. I have no easy answers but remember how the additional NHS funding of Tony Blair’s government was wasted in “reforms” producing little, if any, benefit.
Dr John Harris-Hall (retired GP)

Knapton, Norfolk

Sir, I have no objection to additional hypothecated taxation to support the NHS. However, can it be linked to those items that have a direct impact on illness: smoking, alcohol, sugar etc? In that way the user pays and we have a choice on whether to purchase items that have this additional taxation. For increasing funding to support social care, changes to National Insurance would be a fairer way of meeting the need.
John Berry

Countesthorpe, Leics

Sir, I have never understood why, when I reached retirement age, I no longer had to pay national insurance. I continued to pay car and house insurance. Now the health secretary is hinting at a hypothecated tax for the NHS. This should surely also include care. Since the people most likely to need both are the retired, I see no objection to that growing and increasingly wealthy section of society being asked to help to fund it.
Eric Johns

Swanage, Dorset

The second letter shows the regressive nature of “deserts based rationing”.


This entry was posted in A Personal View, Rationing, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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