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Reforming the NHS and it’s National Insurance funding system

Charles Clarke, MP, former UK Home Secretary, made a speech at the London School of Economics (LSE) today (Thursday, 8th Feb) in which he queried the way the UK’s National Health Service (NHS) works. That’s very brave for a politician; it’s the sort of thing they usually lose their jobs over, but he’s already lost his, so he’s got nothing to worry about.

Remember, he was the guy who lost his job the week before his successor gave a press interview and famously said this department “is not fit for purpose!” Some epitaph for a man who was hardly in the job for long enough to make any kind of difference. But old Clarkey (who for some reason reminds me very much of Noddy, can’t think why) did tend to keep things to himself. Except those foreign prisoners, immigrants, and parolees who had a habit of disappearing when he was in charge.

[Less to do with him, the Home Office really had and has big problems with record keeping. Nothing to do with the big NHS National IT Project the UK government wasted many billions on in the Health service, or the similar amount wasted on the National Insurance computer system that actually lost one and a half years worth of records (no wonder they reduced the number of qualifying years down to 30 to get a pension – they had to! All those lost records…). The Home Office really is a leviathan whose time is come.]

Anyway, since he was sacked because of the bad press over the mismanagement in the giant department that is responsible for internal affairs such as the Police, Immigration, the Justice system and so on, he’s kept a low profile. Bit difficult for a man like that, I know. Reminds me of a boy at school, very similar physique from the ears to the Mr Wobbly-Man waist to the great height. Fatty we used to call him, but boys can be awfully cruel without really meaning to be. I think most kids really liked him, and after all, we all had pretty strange nicknames back then. Since the teachers all called us by our surnames, a nickname was far more personal, and like the given names of Native American braves, we suffered our badges proudly.

But I digress. Sometimes I’m good at that.

Old Clarkey said some interesting things though. For once, we heard a politician call a spade a spade, although he did backtrack quite a bit on Newsnight on BBC afterwards, apparently. I saw the BBC interview but not the LSE speech.

Most interesting thing he said though was along the lines of “Why don’t we charge for certain health services at the point of delivery and have insurance pay the bill?” Now I know a few smartarses are going to say, all indignant-like, “But we do pay for Insurance – National Insurance!”

Well, that’s a joke.

No, I mean it. National Insurance doesn’t collect enough money to keep a family of sparrows fed through a warm winter. And think of all the work it has to do, all those eventualities it has to pay out on: Invalidity Benefit, Unemployment Benefit, Basic Old Age Pension, Health Care, Maternity Benefit, all the normal trappings of the welfare state.

Clarkey’s right of course, dead right. As better and better treatments become available, their price escalates more and more, and that means fewer people can take advantage of them, the pot of money being fairly finite. What Clarkey’s saying, is let’s collect some money for it elsewhere. The man’s a genius. Well, relatively so, in his chosen field.

The problem is the tabloid press will probably lambast him for daring to interfere with one of those Sacred Cow subjects. Well, they might have gotten the sub-continent right, but chose the wrong animal. It should be looked at as a giant White Elephant, not a Sacred Cow at all.

Now, don’t get all indignant on me. Why can’t we look at how Health Care is delivered in the UK? Why should how we pay for it be set in stone?

Clarkey was suggesting car insurance should pay for personal injuries such as whiplash injuries. and that other minor procedures should have similar payment schemes, even making people who arrange Doctor’s appointments but don’t turn up pay for the time wasted. Some of that seems fair enough at first glance, doesn’t it?

OK, the missed appointments thing I’m not sure about as half the problem seems to lie with most Doctors surgeries seemingly not really wanting to see any patients at all, making you wait so long for one you’ve either recovered or died by the date of the appointment and so of course you don’t need one. But I believe he’s missing the big picture.

Most politicians are so used to the NHS as it is that they can’t think of any other way. When they do find and talk about one, they are knocked back by a rabid tabloid press who all follow each other pretty much, like a pack of slavering dogs. (Good word, slavering – hope I spelled it right. I checked using an online dictionary, and it was one of those American ones, not British English which I have yet to find one for – drop me a comment with a link if you know of one 🙂 ).

Let’s get serious for a minute. How about instead of privatising the Health Service, they privatise National Insurance? First you’d have to split it up into it’s different components. So, you’d have one deduction for Invalidity Benefit, a seperate one for Unemployment Benefit, a different one for the Basic Old Age Pension, one for Health Care, one for Maternity Benefit and so on – men could choose whether to pay into this last one or not, but if they didn’t pay they wouldn’t be eligible for any paternity benefits when they had kids, just to be fair.

To be honest, I don’t think this would be a bad thing to do even if National Insurance stayed in public hands. They keep on saying we need more transparency in our investments, mortgages and insurances, so why not in National Insurance? Transparency in Government always keeps them on their toes.

From a political point of view, I rather think it would be quite useful to break the payments down to show the rest of us just how little we actually pay for each service. They do it in other countries, and payslips with three or four more deductions are still easier to understand than a Rail worker’s payslip back in the UK. There, successive wage claims and management counter claims have produced a situation in which a workers full, final salary pension can be as much as, oh, 25% of his take home pay! But that’s another story, all about Union negotiators who didn’t understand maths, or who did but were cynical enough to think their members didn’t so they could get away with whatever they wanted…

But imagine it. You pay into a compulsory, privatised insurance system. Logically, a good way to split the pie up would be into three sectors – insured benefits (unemployment, invalidity, maternity etc), healthcare benefits, and retirement benefits. You’d have lots of providers all competing with each other, thus giving efficiency.

But let’s keep our focus on Healthcare. It would have to be different to how it works right now in the UK and in the US, or else it couldn’t really work as a privatised system that catered for all which would have to be the goal. Well, only if you wanted folk to vote for it, that is.

How about some safeguards? OK, it starts out being compulsory as it is now. To be fair, the insurance companies would have to be forced by law to accept everybody into the scheme, no matter how ill or what their medical history was. But let’s be fair to the insurance industry too, or we won’t get any providers to play ball! OK, how about a carrot and a stick?

The carrot would be: health insurance companies could offer high value-added extra services for more expensive, higher add-on fees for higher profit margin services such as having a single room in hospital, being able to choose your consultant independently, alternative healthcare services such as acupuncture, laser treatment for cataracts, or any of a raft of special extras not normally associated with healthcare, but which some people might actually want to pay for. How about breakfast served at 10am for instance, after a gentle wake-up call at 9.30am? It’d reduce your stress, relax you and probably help you get better, or at least suffer less on the way.

The stick would be, if they want the high end opportunity, they have to serve their time providing cover for all at a more basic level, which could of course be quite a high standard set by the government or an independent authority. “Two tier NHS!” I hear you screaming deafeningly in my ear. Well, what is it now? There’s teaching hospitals on one level, Harley Street on another level, the BUPA and private hospital level, and then there’s the GP surgeries and small cottage hospital setups. There already is private care and non-private care in the UK. The basic cover would be compulsory to join and pay for, and be compulsory to be accepted into.

If you’re setting up such a fantastic system there are bound to be people abusing it, aren’t there? So, how about free health care for hospital visits, but for trips and treatments at to your GP you pay a modest 10% of the cost. Just so you can see what’s going on. People on low incomes could have these contributions paid for from a social welfare fund set up by the state, or through a levy on health insurance premiums.

If you privatise the funding system, it doesn’t really matter if the health workers work for a single employer (the State) or many different ones in competition to attract patients by offering better or more convenient services locally. What happens is that things improve, the government are no longer responsible for managing the health system, just for over-seeing it at arm’s length.

Clarkey was right: it’s about time the system was changed.

What I’m describing is a system that already exists, is well funded, with practically no waiting lists (no more time delay than getting an appointment with your financial advisor perhaps). The highest quality equipment, treatments, and drugs are used and given to all – even those on the basic insurance level.

No, it’s not the US system where it is usually the employer that pays, which makes employees beholden to their bosses and companies uncompetitive compared to their rivals; it isn’t even the French or German systems where inefficient setups are sucking in state money, just like the NHS does – only more so, so that the system at least gives good healthcare benefits.

I’m talking about the system that works in Europe’s richest country, when measured by head of population – Switzerland. This little country isn’t in the EU, so is more often than not forgotten by journalists comparing how Britain does with it’s European rivals/partners (delete according to your political stance) yet it has a number of secrets that should really be studied more closely by other nations for no other reason than they are cost efficient and they work. Switzerland doesn’t have a budget deficit, doesn’t have a trade deficit, has low taxes, plus low inflation and low unemployment according to the Economist’s Pocket World in Figures, one of my favourite little books. What’s so surprising is that nobody has thought to copy the Swiss yet!

So, paying at the point of delivery should be encouraged, and Charles Clarke was right when he said the insurance companies should pay. The hospitals should send their invoices to the insurance companies!

You just have to look between the lines to see that what this means ultimately, is that the State should not collect your money, guard and spend it unwisely, and then give you back a bit for your healthcare, but should allow you to choose who you trust to provide the funds for your healthcare, who you can see will manage the funds well before payment is due and who will encourage fast treatment since everyone knows this costs less money in the long run.

One day maybe we’ll even discuss privatising hospitals and so on, but that’s a hot potato I’ll leave for another day. It’s the National Insurance system that needs the real reform. What do you think?


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