The Spending Plan policy 36: increase the extent of charges in the NHS

June 04, 2015 12:05 PM

Each day we are publishing a blog on one of the policies from our Spending Plan.
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The current model for funding the NHS is unsustainable in the long-term. As countries become better off, they spend more on healthcare as people live longer and technology improves. As outlined later, the NHS itself must undergo substantial reform to make it affordable in the long-term, but more immediately we must look at ways of paying for the growing costs of healthcare outside of general taxation. The think tank Reform proposed a comprehensive set of proposals to introduce charges for certain NHS services, such as prescriptions and GP appointments, from which those on low incomes could be exempt.

In France, for instance, GP appointments are charged for and then those on benefits can claim back the costs later. Introducing a price mechanism, even if the money is refunded, will help people to realise that healthcare is expensive and that nothing is "free".

NHS is not free

Reform estimated in 2013 that their proposals could save around £3 billion a year. We estimate that the savings would be around £9 billion by 2020, due to a combination of larger budgets, tighter eligibility criteria for exemptions and higher charges.

  • £10 prescription charge. By abolishing all exemptions from prescription charges except for low income groups (we estimated that 30 per cent of prescriptions would remain exempt) and applying a £20 charge, by 2019–20 the NHS could save £5.4 billion a year.
  • £20 flat-rate GP consultation charge. We doubled Reform’s 2013 estimate of a £1.2 billion saving with a £10 charge and increased it in line with inflation to estimate a saving of £2.7 billion by 2019–20.
  • £20 daily “hotel” charge for overnight hospital stays. We estimated that the NHS could save £442 million by 2019–20.
  • £25 fine for missed outpatient hospital appointments. We estimated that the NHS could save £465 million by 2019–20 comprised of £200 million in fine revenue and £265 million in fewer wasted appointments.

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