by Victor Haggard
Increased NHS funding has signalled to some that an end to eight years of austerity is in sight, but this is a fallacy. Presented as a result of the government’s fiscal prudence, the £20 billion ‘deal’ comes instead from the desertion of the chancellor’s commitment to eliminate the deficit. Yes, an unexpected windfall from tax receipts has helped, but the recent budget shows that spending increases in other departments have been frozen, and some will experience further cuts. 30 pence of every pound is spent on healthcare, yet the IFS, who see the population as a kind of trapped cash cow, has recommended an absurd five per cent increase. This would be funded by tax rises at a punishing rate, which would squeeze already depressed wages and damage future economic growth.
And for what gain Scotland has a higher healthcare spend per capita than England, but has longer waiting times for appointments, which is striking for a country with far lower population density. Unquestioning followers of the NHS, such as Owen Jones, like to wave around the Commonwealth Fund report, a work he classes alongside Das Kapital, which crowns the NHS at the top of its rankings. Top marks for access and equity are all very well but a tenth out of eleventh placing for outcomes is concerning. Even the Guardian has quipped that, ‘the only serious black mark against the NHS was its poor record on keeping people alive’.
Insurance based models have been discussed before and for good reason. The Netherlands, for example, has legislated that all citizens must be covered by, at least, a basic health insurance plan, costing between €95-105 a month. These plans are managed by private insurers within the regulatory framework set by the government, which can provide subsidy for low-income households. Words such as ‘insurance’ and ‘private’ will no doubt panic the healthcare lobby, but make no mistake: this is a universal healthcare system which ranks not tenth but fifth in terms of outcomes. Who would have thought that market mechanisms could have such a positive impact?
The new health secretary Matt Hancock has set out to transform technology in the NHS and he is certainly a highly able politician with a lot of enthusiasm for his brief. However, the current government is too embattled with Brexit and lacks the necessary political capital to do something that the Dutch, who are hardly a nation of free marketers, have seen as sensible. Throw in the ferocious opposition from certain NHS supporters, who see ‘reform’ as the dirtiest word in the book and it doesn’t look likely. If the freedom of the NHS is sacrosanct and the integration of insurers into our current system looks to be far too egregious, then the government would be wise to consider another pressure relieving approach.
Hong Kong’s Voluntary Health Insurance Scheme (VHIS), announced by their financial secretary in February of this year, is an impressive example of such an approach, with the government proposing a tax concession for subscribers of regulated insurance products. Taxpayers will be able to claim a concessionary deduction of qualifying premiums from their income tax for personal healthcare and for specified family members. The ceiling for deductions is HK$8000 (approx. £800) – an incentive which will alleviate public service pressures, with insurers taking on a portion of already sky-high demand.
Hong Kong officials will have kept their ageing population firmly in mind while drafting this legislation and with UK projections that by 2040 nearly one in seven people will be over 75, policymakers here should too. As our workforce becomes more dependent, it becomes less productive and this will certainly hit the Exchequer. The challenge of an ageing population is multi-facetted but can be made easier by the prudent allocation of resources to ensure improved outcomes. Automation of the NHS, a service with certain trusts running on Windows 98, would massively improve productivity and efficiency and staff would be able to concentrate on patient care, instead of other mundane tasks. The TaxPayers’ Alliance has calculated that automation could ensure public sector savings of £17 billion a year by 2030. Taking this into account, it would surely be irresponsible for the government to continue to pour huge sums of taxpayers’ money into the NHS, with no guarantee of improvement. Wholesale change is both painful and unpopular but there are less drastic measures, like VHIS, where public and private sector cooperation can ease the pressure on the already overburdened taxpayer.