The long-term future of NHS healthcare was questioned last week in a wideranging independent review by Sir Derek Wanless on future funding for the health service.
Wanless, who undertook a review of the NHS in 2002 for then Chancellor Gordon Brown, says in the new assessment: “We are not on course to deliver the sustainable and world class health care system, and ultimately the healthier nation, that we all desire.”
The review, which was funded by independent charitable foundation the King’s Trust, says additional funding for the health service has not yet delivered the improvements in productivity assumed by Wanless in his previous study.
Wanless says: “Without significant improvements in NHS productivity, and much greater efforts to tackle obesity in particular, even higher levels of funding will be needed over the next two decades to deliver the comprehensive, high-quality services envisaged by my original review.
“Such an expensive service could undermine the current widespread political support for the NHS and raise questions about its long-term future.”
Health insurance providers and analysts welcomed the report as opening up an important debate. Standard Life Healthcare head of corporate affairs Paul Lynes believes the current model is “wobbly” and the Wanless interjection creates a new impetus.
He says: “No one has really had the courage to talk about this because it is such a political football.”
Alexander Forbes Healthcare health and risk client relationship director Malcolm Brebner says the NHS will not be able to keep up with demand for new treatments.
He says: “There are some things that will not be able to be publicly funded.”
Bupa Health Insurance believes the solution is for the Government to address funding gaps through a reduction in services and cutting the scope of what the NHS will pay for. It says, in addition to cutting costs, increasing tax or redistributing funding from other departments, the Government should consider developing entirely new funding streams.
Managing director Fergus Kee says the new Wanless report accurately diagnoses the problems about how extra NHS funding is spent but fails to offer any solutions.
He says: “The country urgently needs to consider ways to address this if we are to sustain a National Health Service in the future.”
A survey published last week by HSA Simply Health Group says that 16 per cent of people think the NHS is unsustainable and will eventually disappear and 48 per cent think they will have to pay for aspects of healthcare in the future.
Brebner says: “Ultimately, it is about priorities. If you want your bunions done, you have to choose whether to wait for treatment or pay for it. Does the public prefer to pay out of tax or are they comfortable on a user-pays basis to buy insurance? These are the parameters – tax, pay as you go or insure.”
Commentators consider there are two main alternative models to the existing healthcare formula.
The first involves a basket of services or top-up system, where the NHS provides a cutback core service and individuals top up their coverage with private health insurance.
The top-up product would cover treatments not covered in the core NHS, such as eye care or hearing.
Lynes says: “It would cover specific treatments or facility types, such as greater comfort and privacy, better food and accommodation.”
The other model, a social insurance system involving private sector provision would envisage more comprehensive private insurance coverage.
Lynes says: “Rather than paying more tax, the individual might pay a premium to a company from which he receives his or her healthcare treatment.”
Kee says part of this cost could be born by employers if they were offered incentives. He says the Government could introduce incentives to encourage employers and individuals to use private healthcare services, which would help to ease the funding pressures on the NHS and improve levels of service to everyone.
He says: “An additional solution could be to remove the tax disincentives for businesses providing private healthcare for employees. This would allow bosses to provide more workplace health benefits, creating a quadruple benefit for the employee, employer, NHS and UK plc.”
Health insurance providers are already beginn-ing to adapt their products and services.
Many are developing flexible policies that offer incentives for preventive measures to improve health in return for lower premiums.
Lynes says: “We do not just provide insurance for when you are ill, we provide holistic options, modules and techniques, including an online health risk assessment, for keeping individuals and employees healthy. If you are using these tools, staying healthy and not claiming, then you are rewarded.”
Brebner says companies are looking at adapting an even greater range of segmented products. The result is likely to involve a tiered menu of insurance policies.
He says: “There will be more compartmentalising of what is insured. Providers are already asking their customers whether they are prepared to pay for high-cost products such as cancer drugs.
“Those who expect highcost treatments coming on to the market to be covered under their policy should have to accept higher premiums. Similarly, those who do not expect that level of coverage should not be forced into paying higher premiums.”
Once a critical mass of users is reached, private insurance can become very affordable. Lynes says: “One of the barriers is that private insurance is expensive so just one stratum of society tends to take it out. But if you had the critical mass, you could bring the cost down.”
The UK is looking to countries such as Australia and New Zealand which have broadly similar health service models.
Brebner says: “There, public money has been directed at higher cost, more critical treatment such as cancer and heart treatments. People accept that if they have a problem with cartilage in their knee they will not get it done on the NHS in any great hurry so they have insurance to cover it. I predict the that UK will end up in a similar situation.
“The NHS was invented in the UK and is held dear here as something that should be free and sacrosanct but reality is creeping in.”