This article originally appeared in the Financial Times on 28 October 2014.
The National Health Service has a problem with dandruff. In 2012 PharmaTimes, a trade magazine, reported that NHS family doctors were fielding 40,000 visits a year from patients complaining of nothing more threatening than an itchy, flaky scalp.
Statistics such as this one have convinced some people from across the political spectrum that Britain can no longer afford to provide health services free at the point of use. If the NHS charged a modest fee for doctors’ appointments, they argue, healthy people would make fewer unnecessary demands on medical resources that are already stretched – and the resulting revenue could go towards meeting the costs of care.
Some have gone further, calling for the abolition of taxpayer-funded healthcare. They favour a system where people take out insurance to cover their own medical needs, with subsidies available for those on low incomes.
However, there is intense public opposition to any proposal that involves charging for NHS services. No major political party supports such a plan. If the worried well are to be prevented from crowding out the genuinely sick in Britain’s doctors’ surgeries and hospitals, we must find some way of influencing their behaviour that does not rely on pricing them out of the waiting room.
The dandruff problem is far from trivial; it is an instance of the economic principle that people tend to consume too much of anything that is given away free. Nor is this exclusively a habit of the scurfy scalped. Each year 5.2m people a year clog up surgery waiting rooms complaining of a blocked nose.
At accident and emergency departments, too, the most trivial complaints are among the most frequently seen. Too many people turn up at a hospital suffering from little more than a sprained muscle, a stomach ache, a stubbed toe or minor burns. Some patients are merely drunk and disoriented.Follow @CPSThinkTank
The number of such cases is not overwhelming, but they point to a deeper truth. The NHS is an extraordinary organisation – but we are not using it as well as we should.
Take missed appointments. NHS England, which oversees healthcare commissioning, has calculated that the health service spends £162m a year on doctors’ appointments for 12m patients who fail to turn up. Almost 7m hospital outpatient appointments also go to waste, at a cost of perhaps £700m a year.
Or take the rising number of visits to A & E departments over the past decade. This is often put down to the rapidly ageing population. But a recent study by the Nuffield Trust found that people who attend A & E more than 10 times in a year are typically between 20 and 55 years old. Patients in their 40s are particularly well represented among the regulars. These are the “worried well”.
Poverty does play a role, but a sizeable contingent of the repeat customers are drawn from the country’s most affluent areas.
Add up the annual costs of missed appointments and overused services, and the bill to the NHS is at least £1bn a year. This is not sustainable. To change it, we have to make people think twice before they make wasteful demands on the country’s health service.
In a paper published on Wednesday through the Centre for Policy Studies, Museji Ahmed Takolia and I propose a way of doing just that.
The idea is simple. Everyone who uses NHS services would receive a statement every year, showing which services they had received and how much they cost. Where cheaper treatment options were available that were just as good – say, visiting a family doctor rather than an emergency room – they would also be told how much this would have saved.
This initiative would not solve all the problems of the health service. Still, if it changed people’s behaviour and encouraged them to consider the costs of their actions, it could help alleviate the pressure on the NHS without compromising the general principle that you should not have to pay to receive medical treatment. It would encourage people to take greater responsibility for their own healthcare, without making them directly responsible for the financial costs.
There is one final point. The NHS has a budget of £125bn a year and employs 1.7m staff, yet it still has a surprisingly weak understanding of how and where that money is spent. Healthcare statements would force the NHS to become more rigorous about cost assessment, attribution and control. That, by itself, would be a huge benefit.
The new report "How Much Do We Use the NHS?" by Jesse Norman MP and Museji Ahmed Takolia can be read here.