Stop genuflecting at the NHS altar. Reforms would make us healthier

Presumably you’ve got used to the idea that the primary objective of British life is to protect the NHS. That is the only possible explanation for the fact that nobody seemed at all shocked to hear the Chancellor announce in his official Budget statement that the Government’s taxation policy on pension contributions had to be dismantled to prevent senior doctors from retiring.

He was, without embarrassment, offering what was little more than a bribe to a sector of professional people who effectively had the Government at its mercy. The doctors had made it perfectly clear: remove the pension cap or we’re out of here. And you wouldn’t want to be the party that presided over the total collapse of the health service, would you?

So the doctors got what they wanted and the immediate crisis could be forestalled. This was awkward for Labour, which generally regards itself as the spiritual guardian of the NHS and the only true believer in the principle of universal medical care free at the point of use. They found themselves having to say apparently contradictory things.

On the one hand they condemned the removal of the pension cap as a gift to the richest 1 per cent of the population – “a gilded giveaway … for the wrong people”, as shadow chancellor Rachel Reeves put it, rehearsing a slogan that will undoubtedly feature in the next general election campaign.

But wait a minute – surely NHS doctors are not the wrong people? They are the sanctified custodians of the national religion. But then again, they are, by Ms Reeves’s own assessment, among the richest 1 per cent, and therefore, by definition, undeserving. Or are there different ways of being rich, some of which are evil and others quite saintly?

This must indeed be Labour’s conclusion, because it is now suggesting that it would keep the Tory pension tax break just for doctors – so being a rich doctor must be morally unimpeachable, even if some of those doctors have been running private practices alongside their NHS duties.

But if wealth and high earnings are not necessarily wicked in themselves, then Labour governments are going to have to make some very awkward value judgments in future: what about people who become wealthy by marketing life-saving inventions? Or those who revolutionise a manufacturing process to make its products widely affordable? Are there no deserving rich outside the NHS?

Anyway, that is a problem for another day. What does the immediate desperate need to hold on to medical staff tell us about the viability of the NHS model? In truth, it is not just senior doctors taking early retirement that is a problem. That was just the simplest one to remedy since it was a direct consequence of the Government’s own taxation policy.

There is also the difficulty posed by GPs who work only part-time in their surgeries while taking on highly paid A&E shifts on their free days. There are nurses who choose to be employed through agencies because it leaves them free to work as much or as little as they please, and be better paid for it.

Something has gone badly wrong with the whole system, most noticeably in the provision of primary care, which is the gateway to all NHS treatment. The difficulty in accessing GP appointments is now a topic of everyday conversation. It is putting extraordinary unnecessary pressure on hospital emergency services and delaying critical diagnoses.

If future governments do not want to be forced to design their entire fiscal philosophy around what the NHS needs and wants, there will have to be some serious thinking about reform of the health service. The obvious contenders for replacing the funding model – which was created for a world in which most of the population died before the age of 65 – are the various European social insurance systems.

But they are invariably built around the principles of most kinds of insurance, which involve making some sort of contribution even if it is later reclaimed. So they are immediately put out of contention by the Left (and the public sector unions) shouting about the privatisation of the health service.

Oddly, the country with the healthcare system which is usually seen as the ultimate horror story – the United States – might have something useful to contribute to this discussion. American pensioners have for many years had a government-sponsored health scheme. So successful and popular a fixture of life has it become, that liberal Democrats regard it as an ideal solution for all medical care. Their slogan is “Medicare for all” – which now effectively means a state-supported system of health insurance.

When Medicare was first introduced it was provided and administered directly by the federal government but around 25 years ago, it was opened up to private insurers who could offer varied forms of additional coverage. The private insurers – being of a competitive and entrepreneurial nature – created products that varied in their options and their prices. An entirely new category of provision – called Medicare Advantage or Medigap – emerged to supplement the basic state system.

In other words, American “seniors” as they are known, can top up the free medical care to which they are automatically entitled with an insurance policy of their choice from a private provider that is monitored and underwritten by government authority. If anything like this were suggested in Britain, it would immediately be shouted down as backdoor (or front door) privatisation: we would be entering a world of two or three or four-tier healthcare, and, worst of all, it would allow private insurers into the conversation.

But the basic idea of essential treatment that is free at the point of need being supplemented by what might be quite inexpensive “top-up only” insurance is too good to ignore. It would provide choice and autonomy for patients, an additional revenue stream for the NHS and a way out of the hopeless trap of infinitely rising government expenditure, which everyone – even on the Left – knows is unsustainable.

Our health service is no longer fit for purpose. Other models get better results by mixing public and private provision

Americans can top up the free medical care to which they are all entitled with a private insurance policy