Sajid Javid joins calls to replace ‘unfit’ NHS with insurance model
Former health secretary Sajid Javid has joined calls for a major overhaul of the National Health Service (NHS) that would see it replaced by a universal social insurance-based model.
Javid said a “serious conversation with taxpayers” about how to fund the institution was “long overdue,” throwing his weight behind a paper by Policy Exchange which warned the NHS was “structured in a way that guarantees permanent crisis.”
The Labour government has pumped extra cash into the NHS as part of a ten-year strategy to reform the system as the budget for the Department for Health and Social Care will increase by 2.8 per cent in real terms in the next three years.
But leading academics and researchers have called for the entire healthcare system to be re-designed, with the Netherlands providing a model to emulate based on “regulated competition” among providers and insurers.
Roger Bootle, the founder of City consultancy firm Capital Economics, said the UK required a “serious debate” about the structure of the NHS and its funding.
In the Policy Exchange report, co-authored with fellows Ben Ramanauskas and Ben Sweetnam, Bootle says the NHS’ current structure is “unfit for purpose”.
He said its inefficiency, shown by its expenditure hitting nine per cent of GDP while posting 11 per cent lower productivity than pre-pandemic levels, was a sign the health service was in dire straits.
Research in the report also suggested the UK ranked second-worst among main global economies for both life expectancy and healthy life expectancy.
“With an ageing population, rising treatment costs, and weak productivity, the service will consume ever-greater shares of public money – unless its financing and structure are reformed,” the authors wrote.
NHS troubled by strikes
The report has been published as NHS doctors vote to strike for five consecutive days at the end of July over a dispute about pay with the government.
Campaigners at the British Medical Association (BMA) are set to hold talks with health secretary Wes Streeting, whose 5.4 pay increase offer for the year was rejected by resident doctors, formerly called junior doctors.
Union leaders are calling for a 29 per cent increase linked to retail prices index inflation changes over 17 years. The government said it used consumer prices index (CPI) inflation data to calculate its offer, the more widely-used measure for price growth.
Researchers’ call for a social insurance-based model with universal coverage would mean the NHS was funded through insurance premiums and co-payments rather than through taxes, which could save the government over £100bn a year if spending on healthcare halved.
Recommendations include a “fee payable” for visiting GPs, with low income groups exempt from paying a charge, and removing free prescriptions for over 60s.
Researchers also said the government could save billions from regionalising pay rates, removing administrative costs and encouraging providers and insurers to compete if a social insurance-based model is introduced.
The name ‘NHS’ should be retained, with only the financing structure to change.
“It would be important that savings made from organising and financing the NHS differently should not be used to increase public spending elsewhere,” authors wrote.
“This reform of NHS funding should be explicitly tied to a tax reduction so that taxpayers can see there is a quid pro quo for their increased expenditure on health insurance premiums.”
“In this regard, some form of NHS rebate should be issued to all citizens.”
Javid, who served as health secretary for over a year under former Prime Minister Boris Johnson between June 2021 and July 2022, said the “very best performing systems” operated on a combination of state subsidy, mandatory insurance, co-payments and individual choice.
But he warned that a US-style of private health insurance would not improve the system, with authors agreeing that the “expensive” American model that yields worse results should serve “as an example of a model to be avoided”.