The NHS is in crisis, with medical staff and the public
equally disillusioned - fundamental changes are required. Now, some experts are touting the solution as a partnership between the state and private health sectors.
Christine Seib reports.

The National Health Service cannot cope. Political rhetoric can't hide the fact that waiting lists for hospital treatments are too long, it is near impossible to get a convenient appointment with a GP and there seems little hope for improvement under the current free-for-all system.

Even disregarding the constant flow of A&E horror stories in the tabloids, new and worrying evidence put forward by the British Medical Association (BMA) cannot be ignored. The

BMA's Crisis in Care: A GP Dossier, published in May, is a snapshot of more than 100 GPs across the UK. It shows that their morale is at an all-time low, and that they feel they are letting their patients down.

The dossier says that inadequate consultation times, burgeoning paperwork, a shortage of doctors, nurses and hospital beds, under-resourced new projects and unrealistic targets have all resulted in patients not receiving the care they deserve.

"In Cardiff, some patients are waiting six years for hip operations," the dossier reports. "In Cumbria, it takes two years to see a psychologist and, across the UK, emergency patients, including paediatric and cardiac cases, may wait for eight hours for a hospital bed, or their GP is forced to dial 999 to ensure a patient gets a bed."

The BMA is not telling the public anything it doesn't already know. There has been a dramatic increase in the number of people choosing to fund their own treatment through the private system.

A Standard Life Healthcare study done in May shows that 300,000, or one-third, of all private procedures performed over the past year were by self-pay. And more than two-thirds of the people surveyed by market research firm Taylor Nelson Sofres in February think that NHS waiting times could be cut by a partnership between the public and private health sectors.

Look to France
Derry Andrews, managing director of Clinicare, says fundamental changes are needed to the current system. "The same problems have actually existed for over 40 years. The length of waiting lists haven't changed that much over this course of this time, but whereas 20 years ago people would wait patiently, the mood of the country now means they won't stand for it."

He suggests the government should look at the way France runs its healthcare system - a country that doesn't have waiting lists. This is because the state pays up to 65% of the cost and those who can afford it pay the rest.

"Unless there is a mixture of state and private-funded healthcare, there are never going to be enough funds to solve the NHS problem."

Unbeknown to most people, the private sector already plays a large part in the nation's health and care industries. Figures from the Independent Healthcare Association (IHA) show that independent organisations deliver 85% of all residential community care, carry out 20% of all acute elective surgery and provide more than 33% of all medium-secure mental health care. Of course, the IHA has a vested interest in taking an even greater part in the UK's healthcare, but spokesman Tim Evans says its biggest priority is ensuring that healthcare is provided in the areas where it is most needed, no matter which form it must take. "We think that the strength of the future is in diversity of provision," he says.

Tax relief for PMI
The BMA has suggested a number of ways in which a public-private partnership could be configured, one of which is to give tax relief for corporate and private medical insurance (PMI). The BMA's most recent Healthcare Funding Review says the argument in favour of tax relief rests on the premise that people should not have to pay for their healthcare twice.

"Refunding part or all of their contribution to the NHS would not only be fair, but would also encourage more people to take out private insurance, which in turn would benefit those less able to pay by reducing demand for scarce NHS resources," the report says.

The report also addresses the obvious holes in this argument. One is that the cost of paying tax relief to the estimated 6.4 million people who have PMI would be large and, unless a further two million people could be convinced to take out PMI, would result in a net loss of public sector funds. It is also misleading to say that people who have PMI have opted out of the NHS as they would still require NHS treatment for the conditions not covered.

"Many risks are considered uninsurable and are generally excluded from insurance policies, including the risk of needing treatment for congenital, chronic or pre-existing conditions, for self-inflicted injuries, drug abuse, HIV/AIDS, infertility, normal pregnancy, cosmetic surgery, organ transplants and injuries from dangerous hobbies or as a result of major epidemics," the review says.

No incentives under Labour
Talk about tax incentives is all well and good, but it's not a possibility as long as the Labour government is in power. A party spokesman says Labour is planning to attack the Tories for their suggestion of "PMI tax relief when affordable".

"You won't see any incentives or intermingling with insurance at all," the spokesman says of Labour's election health manifesto.

The idea is also unpopular with independent healthcare charities such as the King's Fund. Its spokesman Andrew Ball says a tax-funded system is the most fair and efficient.

"Encouraging more people to opt out of the system in part, because PMI doesn't cover many things, means you divide up the sum of money available and skew it towards people who have more money and fewer health worries," Ball says. "Your ability to move resources around to meet needs is reduced."

Ball also fears that increasing the private sector's role could drain valuable human resources from the NHS. "We know the scarcest resource is trained people," he says. "If you increase the scope of the private sector, they've got to get the people from somewhere."

Standard Life Healthcare managing director Mike Hall is a long-time campaigner for a public-private partnership, which he says is inevitable within ten years for two reasons: the UK's changing demographics and the human genome project.

Hall says the ageing population means there is going to be greater demand than ever on the NHS. "The people who are already old are going to live longer and be more costly," he says.

The rapid development in cures for genetic conditions is also going to create a great demand for costly medications free of charge on the NHS. "When they make a medicine that will knock out the deadly gene, there'll be a queue at the doctor's door for the genetic test and another queue for the medication," he says.

Put partnership on the table
Hall says it is inevitable that politicians will be forced to discuss the partnership issue before long. "There's a natural ceiling on the willingness of the public to pay tax and after that, you become unelectable," he says. "They've got to get the public and private sector around a table to explore the options. There's been a reluctance to do that for fear of bad headlines but, if not in the next term of government, then the one after that, they'll get around to it."

Hall proposes a number of options for a public-private partnership. One is that the private sector funds facilities and services that would be used by both private bodies and the NHS on a charge basis. Hall strongly believes that the private sector should return some of its financial gain from the partnership to the NHS, so the gap between those who can afford treatment and those who cannot does not widen.

Another is almost a health voucher-style plan, where the NHS provides a certain amount of free treatment which, once used up, can be topped up by those who can afford to pay for further treatment. Extra treatment would be available free of charge to those who could not afford to pay, which would be strictly monitored.

For those with just too much money to get the extra treatment free, but not a great deal more, there would be insurance products that, for a reasonable fee, would provide the top-up.

Creating responsibility
"If you take out-patients, where there's a waiting list to see a consultant, it'd be wonderful if those people who could afford to, paid part of the cost," Hall says. "The biggest saving is the establishment of a responsibility link between the patient and the cost of treatment. You'd cut down the incidence of people seeking frivolous treatment."

One of the biggest drains on NHS funds is its cost-free nature, which does not breed responsibility for its use, he says. "People are demanding the latest thing and they assume there's a bottomless pit to pay for it."

Bupa medical director Andrew Vallance-Owen is less hopeful of a partnership, although he says he would be very happy if one came about. "Private hospitals are already under NHS plans so there's already active local collaboration but there are less signs of a partnership between health insurance and the NHS," he says. "Changing the structure of funding is a rather more radical agenda, but we're not hearing much from the government. We'll stay ready to talk, but nothing's forthcoming at the moment."

Despite all of this, Vallance-Owen can see a sneaky advantage to the public use of private facilities. "Anything that encourages people who would otherwise not have thought of going private is a good thing," he says. "A lot of people don't think of it and to see the quality of service provided might encourage people."

A bitter pill
Whatever the best partnership scenario, there is little doubt that the public may need to change its attitude toward the NHS in the future. As Hall says, healthcare is the "UK's last bastion of socialism". But is it realistic to expect free and equal healthcare for all, when every other aspect of our quality of life is dictated by how much we earn? Unpleasant but true, and it's a bitter pill the public might have to swallow when the NHS's lingering illness becomes terminal.

Labour promises:

  • NHS spending will grow by a third every year till 2004
  • More than 100 new hospital developments will be undertaken before 2010
  • 500 new one-stop primary care centres will be set up by 2010
  • 20,000 extra nurses (of which 6,000 are within the 16,000 that have already been delivered), 9,500 more doctors and 6,500 extra therapists will be recruited by 2004
  • No patient will wait more than six months for hospital admission by 2005
  • No wait for a GP appointment will be longer than 48 hours by 2004
  • Rapid-access chest pain clinics will be opened across the country by 2003
  • Breast cancer screening will be extended to cover women aged 65 to 70.
  • Access to NHS dentists will be available to everyone by September 2001 via NHS Direct

    Pay your own way
    The tabloids are full of shock-and-scandal stories of people who, faced with a horrendous wait on the NHS, have flown as far as India and Poland for tonsillectomies and hip replacements. It may sound extreme, but the concept of paying for your own medical treatment is a viable option. The concept of self-pay healthcare is becoming increasingly popular with people who don't have private medical insurance (PMI) but don't want to be treated on the NHS. And you don't have to leave England to do it.

    Self-pay is not a new idea. Before the creation of the NHS and in its early days, the proportion of self-funded private patients was much higher. However, for the past 25 years, PMI has dominated the private healthcare market.

    Carehealth is a website set up in September last year to offer independent advice on self-pay, such as the treatments and hospitals available, the costs and comparisons between PMI and self-pay.

    Carehealth managing director Dermot Cox says the site's popularity is building.

    "I wouldn't claim it's one of the most popular sites on the web, but we're getting regular numbers of new and repeat users," he says.

    "There's no doubt it [self-pay] is beginning to grow and the hospital groups are promoting it quite strongly."

    He attributes part of self-pay's growth to the dissatisfaction amongst some PMI subscribers.

    "Regular increases in subscription fees above the rate of inflation, combined with escalating charges as people get older have led some people to decide that health insurance is too expensive or will become so when they're most likely to need it," Cox says.

    "There's growing awareness of the restrictions and exclusion clauses in private health insurance schemes, which can mean cover is withdrawn if a condition requires several sessions of treatment, on the grounds that it's now chronic."

    Cox says PMI companies, concerned at the potential loss of business, are breaking into the self-pay market with high-excess policies.

    The policies work by charging much lower premiums than those offering comprehensive cover, but setting a high excess, so subscribers pay the first £1,000 to £3,000 of their private treatment in any year, or for any given condition.

    Cox says the first high-excess policy was launched last year by Western Provident Association, called Excess Health, which he says is a very strong product in the market. Standard Life Healthcare launched its own product Choices earlier this year and Cox expects other PMI providers such as PPP Healthcare to follow suit soon.

    "Anyone with a high-excess policy who falls ill and chooses to be treated privately will pay themselves for at least part of their treatment," he says.

    "On the other hand, they're protected from the real risk which causes people to buy medical insurance, the unlikely but genuine possibility that they'll need major treatment costing many thousands or even tens of thousands of pounds."

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