How the NHS works

What if people had to pay £10 to see a GP?

Charging people to see their GP may seem a somewhat perverse idea. Wasn’t the central founding principle of the health service the rejection of price as a way to allocate health care? Wouldn’t charges be unfair and the very abnegation of this principle?

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John Appleby

John Appleby is Director of Research and Chief Economist at the Nuffield Trust. He is a visiting professor in the Department of Economics, City University, and a visiting professor at the Institute of Global Health Innovation, Imperial College.

On the other hand, surely a nominal charge – £10 a visit, say – would not only raise significant amounts of money for a cash-strapped NHS but also deal with the perennial complaint from GPs that they often see people who have rather trivial medical complaints – often self-limiting or easily treated by patients themselves? And after all, it’s not as if such a charge would be particularly novel; the NHS has charged for prescriptions and dental care for years. And it was only a few years into the history of the NHS that free spectacles were limited to certain qualifying groups, with everyone else being charged £1 a pair.

What’s more, there are arguments that some health services are not or should not be part of the basic NHS ‘package of care’ and therefore should not be paid for out of general taxation. And where markets are created – even if partially subsidised by the NHS (as is the case for spectacles) – it could be argued that this will stimulate innovation and more choice.

While the introduction of charges for prescriptions alongside those for spectacles in 1951 prompted Aneurin Bevan to resign, these charges have been with us ever since (apart from a brief period when they were abolished). Now, the gross income from prescriptions contributes around £500 million to the English NHS (although there are no figures for the cost of collecting this income) and dental charges contribute even more, around £800 million.

£1.3 billion is a hefty sum – equivalent to a quarter of the total costs of providing elective treatments or three-quarters of the cost of the ambulance service in England.

So, what if the NHS introduced a charge to visit your GP? How much money would it raise and what would be the impact on ‘frivolous’ – or rather, unnecessary – visits?

A simple back-of-the-envelope calculation would suggest that with around 350 to 450 million visits a year to GPs, a £10 charge would raise between £3.5 and £4.5 billion a year. That would pay for all day-case treatments or around half the total community prescriptions bill every year. It could also have been enough – with some left over – to have covered hospitals’ overspend last year.

But before legislators jump into drafting a new NHS charges bill, let’s examine these numbers in a bit more detail.

If the argument that a new charge would help reduce unnecessary visits to the GP is true, then it is no surprise that charging will have a deterrent effect.

First, this back-of-the-envelope calculation is just that, a crude multiplication that takes no account of the dynamic effects of introducing the charge. While for many people £10 may seem a small sum, for others it will be a significant cost. Indeed, if the argument that a new charge would help reduce unnecessary visits to the GP is true, then it is no surprise that it will have a deterrent effect. Quite how much of a dent in potential income this would make is difficult to predict. However, some data on the effect of introducing charges is available. For example, an Ipsos MORI poll in 2007 on access to NHS dental treatment found that 4 per cent of those surveyed mentioned cost as a major factor in not seeking care. This might seem a small percentage – equivalent to a reduction of £140 to £180 million in the potential £3.5 to £4.5 billion raised through charging– but it’s also equivalent to 1.7 million people deciding not to seek care.

Other research – not least the famous RAND health insurance experiment carried out in the 1980s – has shown that charges that are not based on ability to pay have a detrimental impact on demand from the very people who need care most – older people and the poor. If we assume the same figure of 4 per cent deterred by current dental charges would apply to GP visits, this would mean around 14 to 18 million fewer visits each year. If all these visits were unnecessary perhaps this doesn’t matter. The problem – like the adage that 50 per cent of advertising works, but it’s not clear which 50 per cent – is that we don’t know that this 4 per cent would be the right 4 per cent. Again, studies such as the RAND experiment suggest that charging is a crude and indiscriminate sledgehammer to crack the ‘frivolous’ demand nut.

Other research has shown that charges unrelated to ability to pay have a detrimental impact on demand from the very people who need care most – older people and the poor.

Added to this is the effect that paying to visit their GP would have on the behaviour of patients. There is every likelihood that forking out real money at the time of a visit will encourage previously passive patients to become more galvanised consumers of primary care – to be more, not less demanding. This may well be a good thing – perhaps GPs shouldn’t expect an easier life, and people who have paid will want to get their money’s worth.

Although income from a GP visit charge would be a bit lower than the crude calculations suggest, the dynamic effects are likely to introduce extra costs for the NHS in other ways if, as will certainly be the case, some people dissuaded by the charge end up with more serious illnesses and needing (probably more costly) treatment anyway. This of course ignores the costs to these individuals in terms of poorer health.

But there are ways to ameliorate the side effects of charging. As with existing NHS charges such as for prescriptions, vulnerable groups – children, the older people – could simply be excluded from having to pay. What effects would this have on the income from charges for a visit to a GP? Currently, around 90 per cent of prescriptions are dispensed free of charge. If 90 per cent of GP visits were free, this would substantially reduce the total income from the charge – to around £350 to £450 million a year. This doesn’t include the administration costs of collecting the charge or the possibility that despite exclusions some people will be deterred from visiting their GP when they have a medical condition that needs attention, subsequently needing more costly treatment.

So, on closer inspection, the one-shot solution to raising money and dealing with ‘frivolous’ primary care demand is less appealing than at first sight.

While a system of exclusions similar to those for prescription charges will to some extent deal with the problems of unfairness and deterring the genuinely ill, this will drastically cut income.

While a system of exclusions similar to those for prescription charges will to some extent deal with the problems of unfairness and deterring the genuinely ill, this will drastically cut income. An alternative could be to scrap most exemptions, but reduce the charge to a much lower level and cap total payments any patient would incur each year – as the Barker Commission suggested for prescription charges. But what would be a reasonable charge in these circumstances? If it was too low, it wouldn’t work as a deterrent for frivolous visits and the income raised would be nominal.

Or, as in New Zealand for example, exemptions such as those for prescriptions could be kept, but with a much higher charge for the non-exempt. Again, however, a high charge will inevitably deter some people who have real need – with consequent impacts on their health.

If ‘frivolous’ demand is a problem (although there is little hard evidence of its scale) then there are more effective and less inefficient and unfair ways of dealing with it – for example, educating the public about appropriate use of primary care, and also supporting GPs’ to deal more efficiently with less appropriate visits by some patients.

And if raising money for the NHS is the aim of charging for visits to a GP, it should be remembered that we have already invented a solution to the problems of exemptions and variations based on ability to pay – it’s called taxation.

The views expressed in this article are those of the author and are not presented as those of The King’s Fund. We have commissioned external authors to write for ‘The NHS if’ series as a way of presenting different perspectives on the future of health and care. We welcome a diversity of views on this issue and encourage you to leave your comments below.

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‘The NHS if’ is a collection of essays published by The King’s Fund that explores hypothetical scenarios and their impact on the future of health and care.

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