Mixed funding will personalise the NHS

1 July 2008

The Daily Telegraph, Andrew Haldenby, 1 July 2008

"Follow the money" is always a good maxim, and it certainly applies to the debate on healthcare. Money was surprisingly absent from Lord Darzi's landmark review of the NHS. Professor Nick Bosanquet of Imperial College London and Reform has shown that any discussion of the NHS must consider the pressures on public spending from a worsening economic outlook. Yet Lord Darzi's review was silent as to the challenge of getting a better service from limited resources.

I can't believe that the electorate will countenance tax rises for higher health spending on the same scale of the last decade (i.e. a tax increase of around £2,000 per family per year). This means the only game in town is getting the NHS to think about value for money. Nick Bosanquet has called such a process an "economic constitution" (full details here). Lord Darzi's proposed constitution does include a commitment to "best value" - but it is not legally enforceable.

Money also matters in the simple sense of how we pay for healthcare. Here the debate is suddenly moving very quickly. Alan Johnson's review of "top-up" payments by NHS patients is historic. It is the first recognition since 1948 that a mixed funding system for the NHS will be fairer. The Secretary of State was under heavy pressure, notably from the independent doctors' group, Doctors for Reform, which has raised over £35,000 towards a judicial review of the policy. But he displayed a rare integrity and leadership in showing a willingness to listen.

The review means that Lord Darzi's review, with its talk of "a national service funded through national taxation", is already somewhat out of date. But he should be pleased about that. In reality, the higher quality, more personalised NHS which he describes goes hand in hand with a funding system which allows people to put more of their own resources towards healthcare.

Andew Haldenby is Director of Reform.