Solving the NHS care and cash crisis

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Lord Warner, Minister for Health Reform in Tony Blair’s government, argues that NHS funding from general taxation should rise only with inflation to avoid starving the rest of the public sector of resources.  Higher “sin” taxes on alcohol, tobacco and sugary foods, means-testing of NHS “Continuing Care”, plus a £10 per month NHS membership charge and other patient contributions are needed for the NHS to survive the next five years of austerity.

The comprehensive plan argues that tackling the “care crisis” requires the NHS to turn into a “National Health and Care Service (NHCS), based on a new partnership between State and citizen, with integrated health and social care available locally in the community and consolidation of hospital specialist services on fewer sites of higher quality”. The report, published by the independent think tank Reform, proposes an NHS Membership scheme for all UK residents, including an annual health MOT to set new responsibilities each year for both the NHS and the individual.

The report claims that the “care delivery model, largely unreformed since 1948, inflates NHS costs and limits many people’s potential to live longer and healthier lives”.  It recommends preserving virtually all current hospital sites but refitting many as primary care centres delivering more integrated care. Specialist services would be concentrated on fewer, more highly skilled, safer centres with 24/7 consultant cover.

The authors argue that, “even with major changes to care, it is now irresponsible to pretend to the public that current forms of taxation alone will be sufficient to provide a good quality health and care system”. Instead governments should introduce higher hypothecated “sin” taxes on alcohol, cigarettes, sugary foods, betting and gambling.  NHS “Continuing Care” should be means-tested like social care.  The numbers of people paying inheritance tax should rise, so that more cost is borne by the wealth of older people rather than by younger income tax payers.

Both Labour and Coalition governments have ignored the developing crisis, warns the 128-page report.  Meanwhile, the NHS’ protected budget takes ever more from shrinking public spending and impoverishes other vital public services. Yet, even this ring-fenced NHS remains unaffordable and excessively hospital-dominated, says the report, published as Simon Stevens takes over as NHS England’s Chief Executive.

The report’s key recommendations are:

Radical partnership between State and citizen

• Everyone to gain NHS Membership entitling people of working age to an annual Health MOT, planning ‘co-produced’ health over the year.  £10 per month membership fee collected with Council Tax to fund local preventative health care.

New National Health and Care Service (NHCS)

• Services refocused on early intervention in community for both managing chronic and mental health conditions and preventing illness. Many existing hospitals become hubs for integrated services closer to home. GP practices consolidated or federated.
• Integration of health and social care budgets and services, under Health and Wellbeing Boards.
• Specialist services concentrated in fewer, safer, more expert 24/7 centres plus improved transport links with community-based services.
• On 5 July, “Health and Wellbeing Day”, the new NHCS would provide a Citizens’ Audit, reporting on performance and costs plus a detailed local report on community, primary and social care services, and specialist hospital services.

Stricter financial discipline

• Tougher efficiency programme raising £15-20 billion to fund new Service Transition Fund (STF), allowing investment in new community health and care services. Efficiencies include converting under-used NHS estate to raise cash for STF.
• Attendance Allowance integrated into the health and care budget, saving £6 billion a year.
• NHS “Continuing Care” becomes part of means-tested social care, saving up to £4 billion a year

New funding methods

• NHCS funding from general taxation to be frozen in real terms.
• NHCS to receive 1 per cent increase per year above inflation, funded not from income tax but from:
- Tougher, hypothecated, inflation-proofed “sin” taxes on alcohol, tobacco and gambling and new taxes on health-damaging, sugary foods.
- Wider payment of inheritance tax.
- Inflation-proofing prescription and dental charges.
- “Hotel charges” for overnight stays in hospital.
- Full cost holiday vaccination charges.