The majority of NHS patients in England get free prescriptions because they are over 60, pregnant, poor or are children. The “unlucky” fifteen or so per cent who pay for their drugs contribute half a billion to the government’s coffers. This is a small but significant amount in relation to current NHS spend of £105 billion.
Recently the Welsh, the Irish and the Scots have moved to offering their populations “free” prescriptions. To do this in England begs the question how would you replace the half billion of revenue that is lost? Given the sad state of the economy and the necessity to raise taxes and reduce public expenditure once the election is passed, it is not obvious how this funding gap could be removed.
The major cost in the NHS is labour so one way of raising the money lost if prescriptions are free, would be to reduce the wages of doctors, nurses and other staff. There are indications that the pay round in 2010-11 (after the election of course!) will offer NHS staff zero pay deals, thereby breaching some three year pay agreements signed in affluent early 2008. Curbing NHS staff pay and their numbers seems unavoidable if hospitals and primary care are to make ends meet after the 2010 election. There will be little left over for funding free prescriptions.
If you shift the burden in one group, you have to burden some other group. To put it crudely, who do you want to screw?!!
Some suggest that all should pay £1 for prescriptions regardless of their circumstances. This increases the relative burden of the poor and elderly who are the main recipients of scrips from their GPs and hospital doctors. The proposal would ease the burden on the relatively rich who currently pay in excess of £7. This is a policy that may appeal to the Conservatives who are generally supported by the more affluent, but not to Labour who tend to garner the votes of the poor and elderly.
The principle question that has to be dealt with by those wishing to emulate the Scots or make all pay £1 regardless of their ability to pay is opportunity cost. If you shift the burden from one group, you have to burden some other group. To put it crudely, who do you want to screw?!! Your answer reflects your ideological position in relation to “equity”. There is no scientific answer to these choices.
However these choices also have implications for clinicians. A favourite argument of doctors is to argue that there is a lot of waste in drug prescribing. Who is responsible for this waste? Patient may not have their scrips made up. Patient may have their scrips made up and either not take them at all or take them irregularly. However the major potential for waste is the clinicians themselves either prescribing inefficiently or, heaven forefend, using a prescription as a means of terminating a consultation and getting the patient out of the door!
If clinicians are the source of waste in prescribing, why tax the patient with charges? The policy focus should be on inappropriate prescribing and using financial and non financial incentives to curb this inefficiency of doctors.
So what to do with prescription charges? Canadian economists concluded as follows about what they call user charges:
Making proposals to equalise charges is just a nice political "wheeze" to shift the funding burden from the more to the less affluent
“In the present structure of health care delivery, most proposals for “patient participation in health care financing” reduce to misguided or cynical efforts to tax the ill and/or drive up the total cost of health care while shifting some of the burden out of government budgets” 1
Ideally most economists would like to abolish user charges and focus on improving clinical prescribing. Creating price barriers to health care may reduce the utilisation of care by patients with observable and treatable health needs. However in the real world of acute economic recession and the on-coming squeeze on public expenditure, the continued use of prescription charges in England are a necessary evil. Making proposals to equalise charges is just a nice political “wheeze” to shift the funding burden from the more to the less affluent!
References
1. Stoddart, G, Barer, ML and Evans, RG, User Charges: snares and delusions: another look at the literature, Premier’s Council for Well Bing and Social Justice, Ottawa, 1994.