BMA examines options for funding the NHS

Charges for patients, more private insurance, and a move to a system based on social insurance could all generate additional funds for the NHS, the BMA suggests in a new examination of financing. And it warns that charges might be needed if the additional money—estimated by the association to be £1.5bn-£2bn ($2.4bn-$3.2bn) a year over the next four years—is not forthcoming.

At present the BMA's policy is against charges, and the association believes that the financial needs of the NHS are best met from public funding, but because taxation and prescription charges produce insufficient funds, this year's annual meeting called for a re-examination of additional methods of financing (12 July, p 128).

In Options for Funding Health Care, which its council approved last week, the BMA estimates that an across the board fee of £2.50 for a GP consultation would generate £830m; a fee of £10 would bring in over £3bn. If fees applied only to night visits between £3.3m and £14.5m could be generated. Similarly, a universal £2.50 prescription charge would generate over £1bn and a £10 charge would produce over £4bn. However, at present 83% of prescribed items are exempt from charges.

There could be substantial income from hospitals' hotel charges, ranging from £1.25bn (for a £40 charge) to £2.5bn (for an £80 charge). But if current exemptions for prescription charges were applied the likely income would be reduced by half-charges account for only 2.2% of the total NHS expenditure of £46bn.

The paper suggests, however, that the imposition of charges might affect patients' management of their treatment and that costlier care might have to be provided if a simple condition developed into something more serious. Furthermore, patients who have to pay might have higher expectations of the quality of the service. So the report concludes that, coupled with the complex payment system that would have to be set up, charges would be a barrier to the principle of equitable access.

Only 13% of the population is covered by private health insurance, and the BMA says that if this increased there would have to be a “safety net NHS” for people who could not afford insurance. An alternative would be to ration NHS care to a core of services, with people expected to fund non-core services. But, as the private sector is concerned with profit, insurers would select the healthiest subscribers and exclude high cost care. The main problem would be that access to health care would be based on ability to pay and not on clinical need.

Moving to a social insurance based system by increasing national insurance contributions and reducing income tax would, the BMA suggests, threaten universal coverage by exposing vulnerable groups and would not address the escalating costs of health care. Furthermore, there was no evidence that this would be any easier to sell to the electorate than raising income tax.

The chairman of the BMA's council, Dr Sandy Macara, said: “We very much prefer direct taxation, which is fair, and it is progressive. If we want services of high quality we must be prepared to pay directly for them as society, as a community.” The health secretary, Frank Dobson, has indicated that charges would be considered as part of the government's review of spending. The paper will be sent to the government and could form the basis for debates at next year's annual meeting.

Options for Funding Health Care is available from the Health Policy and Economic Research Unit, BMA, BMA House, Tavistock Square, London WC1H 9JR.