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From International Socialism, No.45, November/December 1970, pp.3-4.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Currently, health expenditure in Britain runs at about 4.6 per cent of gross national product. This is a great deal less than other industrial nations spend on health. Standards of medical care in Britain are only protected from rapid deterioration by massive exploitation, especially of the half million wage earners working in hospitals, including notably the 300,000 nurses. During Labour’s recent term of office, an extra 0.7 per cent of GNP was switched into the health sector. This was not nearly enough to match a rapid increase during the 1960s in those categories of the population who specially require medical care. The elderly absorb 30-40 per cent of all medical resources. Between 1961-68 there was a 12 per cent rise (i.e. over a million) in the numbers of people over age 60. In the same period the total of children under the age of 15 also rose by about a million. At the same time there has been a proliferation of new and expensive diagnostic and therapeutic techniques. Patients don’t stay as long in hospital, but more people enter hospital. And part of Labour’s extra resources for health had to be spent on making some kind of start to a hospital rebuilding programme. About 45 per cent of Britain’s hospitals were built before 1891, and nearly 25 per cent before 1861. The need for capital expenditure in mental hospitals is even more urgent. Two out of five mental hospitals are over 100 years-old, and out of a total of 154 such hospitals, only four were constructed after 1915. A cheerless prospect for the 15 per cent of us who can expect at some point in our lives to spend some time as a mental patient.
Though they speak optimistically about the wonders to be achieved in the public sector by a more efficient spending of current budgets, the Tory leaders know very well that the decline in standards of health care can only be arrested by massive injections of extra cash. Here the political hangups begin.
The new minister, Sir Keith Joseph, can scarcely be encouraged by Labour’s adventures with the prescription charge. In theory, the 2s 6d per item charge introduced in 1968 could be raising a useful £50m a year – but only if everyone paid it. Exemptions have to be made. The exemption scheme which Labour worked out is scarcely over-generous. For example, some conditions of chronic sickness are not exempt from the charge, and £¼m a year is being exacted from this, one of the poorest of all social groups. Even so, with exemption for old people, children under 15, expectant mothers and certain low income groups, the direct saving to the NHS of the prescription charge is only £16½m, out of a total drugs budget of about £180m. The actual saving is even less if administrative costs are added in. The campaign advertising the prescription exemption scheme cost about £600,000. Any hospital with over 200 beds will need at least one extra clerk to handle the exemption scheme. On July 13th of this year, Laurie Pavitt pointed out to the commons that for London alone, the NHS employs eight clerks at an annual cost of £10,200 a year checking prescription forms for fraud. In 1969, this team were able to reclaim a grand total of £169 from patients found to be not entitled to exemption. Pavitt reckons the real saving to the NHS of the 1968 prescription charges is unlikely to be much over £8m. The reason is not hard to seek. Overwhelmingly it is the old, the chronic sick, low income groups who use the health service. Thus, unless charges are to be ruthlessly imposed on people in no position to pay, then charges are not much good at raising extra revenue.
It is rumoured that the government are considering the imposition of a charge for each GP consultation. But for each 2s 6d charged per consultation, the gross return would only be £15m, which would probably be at least halved by an exemption scheme. Once again, chicken feed. Despite all the publicity and fuss, the GP sector of the health service in financial terms is really quite marginal, costing only 7.5 per cent of the total budget.
The hospitals however absorb two-thirds of total health expenditure, and half of that goes on the ‘hotel’ part of running costs. Thus a boarding charge for hospital inpatients might seem a more fruitful source of revenue. However even a charge of £4 a week per head would draw in only £45m, of which again, at least a half would be lost in exemptions.
Unless charges are to be racked up to ridiculous levels, then they can bring little relief to a health budget running at nearly £2,000m annually.
The ideologists of the Institute of Economic Affairs have been trying to persuade the Tory leadership that the middle-classes would willingly spend more of their income on health, provided that the extra outlay buys them extra privileges. The Institute points to the rapid growth in numbers contributing to BUPA and similar schemes of private insurance. By 1969 there were one million contributors to private health insurance schemes, and including their families, 2.5 million people were covered. The privileged they buy are certainly worth having. Over 500,000 people at any time are on the waiting list for hospital beds and operations. BUPA helps its members to jump
the queue, and also to pick their own time for entering; hospital. The scheme pays for a private room, and enables the beneficiary to get the surgeon or specialist of his choice. All this, and the same for the family, can be bought for a premium of less than £1 a week. The scheme is a good bargain of course because many of the necessary resources are filched indirectly from the facilities of the NHS.
At present, employer run schemes of private health insurance are directly subsidised by the State in the form of tax relief. But people joining BUPA as individuals get no tax relief. The Tories will certainly change this, and the numbers of people privately insured for health will continue to rise. Increasingly a parasitic private sector will leech away the resources of the NHS. But the bait of tax subsidisation will correspondingly reduce the net extra contribution which new recruits to health schemes will make to the expansion of overall spending on health. At best that contribution is likely to be only very marginal. Currently the total expenditure on medkal care of private insurance schemes runs at no more than £12m a year.
Thus the government will be thrown back on a single choice. Either let the health service deteriorate still further, or find more money out of general taxation. Given Tory fears about the supposed over-taxation of the higher income groups, whichever choice is made in the field of health finance, it is the mass of workers who will lose out.
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