GRADUATIONS

GLASGOW SCHOOL OF ART

EXTRA money for the NHS “will have to come from new, or higher, taxes”, researchers have said.

Setting a new tax rate designed to raise enough to cover the expected demand for healthcare, or earmarking taxes on tobacco, alcohol and sugary drinks to raise funds specifically for the NHS, are among the options put forward in a paper today.

It comes as the NHS approaches its 70th birthday on July 5.

In an analysis published in the British Medical Journal (BMJ), Dr Mark Hellowell of Edinburgh University’s Global Health Policy Unit, along with colleagues from the Nuffield Trust think tank and Oxford University, warn that the NHS is “finding it increasingly difficult to maintain performance on several high profile targets”.

It follows eight years of historically low funding growth which the authors say is leading to a “growing sense that things might have to change”.

Over the past 70 years, NHS spending has grown ten-fold in real terms but the UK still remains a relatively low healthcare spender compared to other developed nations including Canada, Germany, Australia, Japan, Sweden, Denmark, France, the Netherlands, Switzerland and the US.

The UK employs fewer nurses and doctors for its population size compared to the EU average, and also has a lower number of hospital beds, MRI machines and CT scanners per head.

Dr Hellowell an d his co-authors stressed that the ten-fold increase in funding since 1948 has been largely financed by “much reduced” spending on defence, housing and nationalised industries, but there was now “much less room for this sort of reallocation”.

They add: “Other areas of public service -including housing, welfare and education, which are important determinants of health – have already been cut to the bone; extra money will inevitably have to come from new, or higher, taxes.”

Besides increased income tax, introducing charges is sometimes suggested as a way raise money while reducing “’frivolous’ or unnecessary demand”, with some backing dentist-style fees to see a GP or fines for patients who fail to turn up to an appointment. But they said these “can only play a modest role in raising money otherwise they erode the goal of equity of access”.

They pointed to the RAND health insurance experiments in the US in the 1980s which “found that charging deters legitimate use, particularly among the poorest, eldest and sickest patients”.

Surveys suggest a majority of voters would support a ring-fenced NHS tax. They authors say the Government could “set an NHS budget based on independent forecasts of demand and set a tax rate that is expected to raise enough to cover the cost”.

They added: “If it turns out to raise more, or less, then the Treasury keeps the surplus or pays the extra from borrowing or general taxation.”

An argument could also be made for ringfenced taxes on “health- damaging products” such as tobacco, alcohol or sugar-sweetened drinks.

They state: “In these cases, taxes help address the behavioural causes of ill health and reduce healthcare demand, as well as raising money.”

Extra money will have to come from new, or higher, taxes

BRITAIN’S NHS faces a funding gap of £20-30billion over the next three years. Rising demand and rising costs dictate inevitable questions about how much more money we need to spend on health services and how it is raised. Governments tend to boast that they are spending more on the NHS than ever before. As costs rise, increased resources are necessary simply to stand still, so such boasts are true in absolute terms. But in reality, two Conservative governments have presided over eight years of historically low increases in NHS funding,

At present, the UK spends a similar proportion of our GDP on health as many comparable European countries, but achieves less. We have fewer doctors, nurses and beds than many of our neighbours. We have fewer medical imaging scanners and patients face longer waiting times. It is true that the NHS in Scotland has not suffered as badly as it has in England, but it faces the same pressures.

Medical advances, ironically, contribute to the problem. We are all living longer, but often with costly chronic complaints. Sophisticated drugs and treatments are able to be better adapted to the needs of individual patients. Success is expensive.

Increased taxation in some form is the answer proposed by experts, including Dr Mark Hellowell of Edinburgh University, writing in the BMJ today. They suggest this could be some form of supplementary income tax, or by earmarking taxes on products such as cigarettes, junk food or sugary drinks.

Such suggestions are beguiling. Nobody likes tax increases, and polls have regularly shown a willingness among the public to pay more if it were guaranteed to go to the health service. But such ring-fencing of tax, known as hypothecation, is a false and risky proposition.

A risky proposition, because this is a slippery slope. If other areas of public spending need extra funds, will there be more such taxes? What happens to less popular areas of spending – from overseas aid, to support for the drug dependent? They will inevitably be squeezed.

Some doubt the value of politicians, but one of their key roles is to take informed decisions balancing different pressures on the public finances based on the best available evidence. This worth is lost, if their room for manoeuvre is increasingly restricted by ring-fencing.

And it is a false proposition – because such pledges are inevitably broken. Promising the tax on sugary drinks will be spent on work in schools is the latest, and in time it will inevitably go the way of the “road tax” which is in no way linked to spending on the roads.

Putting more money into the NHS should, of course, be a priority. But ring-fencing is neither the most efficient nor the fairest way of funding the NHS. It should come from general taxation.