Co-payments – the inevitable reality for public services?: Health Service Review

Posted on September 14, 2008 · Posted in Health Service Review

 

A principle of the NHS is that all patients are treated equally. But should that principle extend to effectively banning patients from buying treatments that may prolong their life, just because other patients cannot afford to purchase the same drugs?

 

The tragic death of Linda O’Boyle in June shone a light on an area of NHS policy which can be a tragedy for patients, yet which creates difficult policy options for the Government and opposition. Linda O’Boyle died from cancer, after her life was extended by the use of Cetuximab. But Cetuximab is not approved by the National Institute for Health and Clinical Excellence for some cancers. Linda and her husband – ironically a retired NHS manager – had to pay not only for this drug, but also another £11,000 for continued chemotherapy. Because the O’Boyles paid for part of their treatment privately, all NHS free care was denied.

 

Linda O’Boyle’s plight, and that of other cancer sufferers, led to a front page campaign by the Daily Mail. Responding to the widespread criticism of the policy – in place since 1986, when Margaret Thatcher was prime minister – Alan Johnson initiated a policy review. Professor Mike Richards, the national clinical director for cancer and formerly chairman of the National Cancer Research Institute, was asked to look again at the policy and its implications, considering whether patients should be allowed to pay for drugs not prescribed by the NHS.

 

The Conservatives support a policy review, but argue the remit is too limited. They responded by launching their own consultation, considering all paid-for treatments. The opposition argues that the policy must also take into account an awaited draft EU directive on ‘health tourism’ – which may implicitly support patients’ right to top-up treatments – and an impending legal challenge, by ‘Doctors for Reform’, of existing Department of Health rules. The results of this consultation will inform a policy that would be implemented if, as seems likely, the Conservatives form the next government.

 

But the issue of co-payments is not merely a potential divide between government and opposition. It also splits people within the Labour Party. As prime minister, Tony Blair strongly argued for the principle of co-payments – that service users should contribute towards service costs. But he could not get widespread support from party colleagues. “We should…. be willing to experiment with new forms of co-payment in the public sector,” he said in 2003. “We need to address the balance between what the citizen pays individually or collectively.”

 

The Social Market Foundation – which has strong links with the Labour Party and Gordon Brown – published two years ago a detailed report arguing for co-payments. In doing so, it was backed by former Cabinet minister and Labour Party moderniser Stephen Byers. But others in the Labour Party argued that co-payments would breach the principles of equity upon which the NHS and other public services were established, with attacks led by former health secretary Frank Dobson. The momentum towards co-payments was apparently reversed.

 

But now both the political and fiscal environments have changed and another former Cabinet minister – one-time Home Secretary Charles Clarke – has entered the debate. Sponsored by KPMG, Clarke has led a panel examining the potential application of co-payments in the NHS and other public services. Clarke argues that his own experience as education secretary in introducing university tuition fees should be a precedent for other co-payment policies, including in the NHS.

 

Clarke’s KPMG report does not just strongly argue for co-payments, but suggests there is probably no other option. Derek Wanless’s report on future funding of the NHS projected that total NHS spending (at 2002/3 prices) would rise to £154bn by 2022, against £68bn as at 2002/3. But even this vastly increased expenditure was predicated on the assumption that the population were actively involved in improving and maintaining their own good health. With continued signs that people are not, generally, taking on this personal responsibility, the pessimistic Wanless expenditure increase goes up to £184bn by 2022. Such a vast increase is only affordable with co-payment, suggests the KPMG analysis.

 

Nor should there be intellectual or policy objections to the principle of co-payment, argues Clarke and KPMG. A variety of public services already require service users contributing towards costs. In the NHS, patients pay for dentistry, prescription charges and extra facilities in their rooms, and to the private sector for health services such as periodic health checks, scans, alternative medicines and physiotherapy. Most social care is now paid for privately. Elsewhere, the principle of service user contributions is applied through parental contributions to after-school clubs and by London’s congestion charge and the prospective Crossrail levy on London businesses.

 

In much of Europe, there is an acceptance that patients must pay towards their healthcare. In Sweden, Germany and Ireland, patients pay to see their GPs and Swedish patients pay an annual health service access charge. While in the UK, service user charges contribute just 0.2% of government income, in Austria, Finland and Denmark they generate over 3% of income.

 

Clarke’s report suggests that the NHS could create additional resources through co-payments, without seriously undermining the principles of equity. Employers and occupational health insurers might pay for fast-track treatments to get staff back to work quickly. Regular, paid-for, health checks might be supplied by the NHS. Additional patient facilities could be provided in hospitals on a fee-paying basis. Essentially cosmetic services provided on the NHS might be restricted to those who pay for them.

 

Alan Downey, head of public sector at KPMG, suggests that governments have no real option but to consider co-payments. “It has been said that this is all about pushing in the direction of privatisation,” he says. “You can argue it another way. If the money available for public services is restricted to what is raised in tax, then people who can afford it will opt-out altogether. Co-payment potentially offers the opportunity to keep people within the public system, which is less divisive. It’s an opportunity to keep middle-class people within the state system.”

 

With the fiscal crisis currently gripping the Treasury, introducing co-payments is likely to seem increasingly attractive. According to the Social Market Foundation, a £10 GP consultation fee would raise £3.3bn a year, with another £1.25bn a year from a £40 a night hotel charge.

 

But the speed of change in political climate can be seen by the comments of business secretary John Hutton, a mere four years ago when he was a health minister. “We intend to hold true to the fundamental founding principle of the NHS that care should be provided free at the point of need,” he said. “We strongly believe that the introduction of vouchers, passports, co-payment, or extra charges to patients will have a regressive impact on the health of our people – as all of the international evidence confirms. That is why a patient’s passport to personal health should not be dependent on a patient’s personal wealth. These then are the values that underlie our reforms.”

 

But time and experience shape values. Faced by Daily Mail hostility and a painful fall in tax revenues, the introduction of more co-payment looks only a matter of time.