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IF INCREASING INCOME TAX IS SEEN AS POLITICALLY UNACCEPTABLE WHAT OTHER MEANS CAN BE USED TO FUND THE NHS
Funding has always been an issue within the NHS. It is a problem that has faced all governments. The flu epidemic of January 000 brought about strong criticism of New Labour's health record. The media highlighted the inadequacies of health spending in the UK compared to other European countries. The UK spend 6.7% of GDP whereas France spend 8.% and Germany spend 10.4%, this is a significant difference and this shows a difference in the quality of their health care compared to ours. However, raising taxes is seen as politically risky as it could be a vote loser.
However, there are other means of funding the NHS other that raising taxes. For example; hypothecated tax, by encouraging more private health insurance, the introduction of user charges, the introduction of compulsory state approved insurance, and special savings accounts.
The advantages to hypothecated tax is that taxpayers would see exactly where their money was being spent and this may have the effect of making taxpayers less resistant to paying additional taxation. For example, the revenue raised from tax on tobacco (on smokers) could be set aside for the NHS. Although, there are some disadvantages of this. The cost of administering a new tax may not be cost effective; i.e. the administration costs may out-weigh the revenue raised from a hypothecated tax. And again there is the problem that introducing a new tax can be a potential vote loser.
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Another way to fund the NHS is to encourage more private health insurance, which gives people a choice in that they can choose to pay into a private health insurance scheme for their health care. This also provides an additional source of funding for health care without increasing taxation or public spending. This can encourage the private heath sector to expand and take some of the pressure off the NHS. However this may rise to a "two-tier" health service and those on low income or considered to be a high health risk may not have access to the private sector. It can also be argued that this goes against the founding principles of the NHS. If tax relief on medical insurance premiums is offered to encourage people to take out private medical insurance this will cost the government money and may divert resources away from the NHS.
The introduction of user charges is another way to fund the NHS. It is a simple and cost effective way of raising additional money for the NHS - £5 per GP visit would raise approximately £1 billion; £10 a day for hospital accommodation could raise £00 million. It can be argued that people who can afford to pay should make a contribution towards non-medical costs such as meals and cleaning during a stay in hospital. However this may prove to be politically unpopular and goes against the founding principles of a "free" NHS. There would have to be exemptions for the very young, the elderly and people on low incomes. It would involve a costly bureaucracy to administer such a scheme.
Another way of funding the NHS is to introduce compulsory state approved insurance. The advantages to this is that a health insurance scheme where contributions are paid to the State to cover the cost of health care and not to a private insurance company. Such a scheme would provide general health cover and consumers would have a clear indication of what they were paying for. Peoples on low incomes could have their premiums subsidised by the State. However, such a scheme would represent an additional financial burden imposed on the public and could be regarded as an additional tax.
Another way to fund the NHS is a special savings account. This would encourage people to make their own provision for health care through savings in "health" accounts. People would be less dependent on the state and become more self-reliant. Also, savings would build into sizeable accounts to pay for medical care, and low interest loans could be made available to pay for immediate and expensive health care. However, such a scheme would be unlikely to meet the needs of people on low incomes. And such a scheme may widen the "health gap" and health inequalities in the UK.
Therefore there are many ways to fund the NHS, some being better than others, although some would probably work better than others people are not prepared to pay more money in tax.
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