Adam Smith Institute

Previous blogs have highlighted concern over “immoral, incoherent and quite possibly illegal” NHS rules denying patients care if they choose to top-up their treatment privately.  Now, the health think-tank, the King’s Fund, has said that the NHS should no longer be able to discriminate in such a way.

Currently, patients may lose the right to free NHS care if they pay privately for drugs rejected by the National Institute for Health and Clinical Excellence as not cost-effective.  This seems highly inconsistent when people are able to top-up dental and optical treatment, as well as additional non-clinical treatment such as private rooms, but are denied this option when it comes to the prolonging their life.

Niall Dickson, Chief Executive of the King’s Fund, said that: "The current practice on top-ups, which prohibits people from privately purchasing drugs not available on the health service while continuing a course of NHS care, is untenable."

Some of the drugs concerned are not available on the NHS as they are only effective for some patients.  The King’s Fund said that if the treatment is effective for the patient, then after a certain time period, particularly if the patient is financially unable to continue using the drug, the NHS should bare the cost.

Up until recently, ministers have said that top-up treatment would cause a two-tier health system, however, after recent high-profile cases of cancer patients being denied life prolonging drugs, they have agreed to reconsider the issue.  Professor Sir Mike Richards, cancer expert, is currently preparing a report for ministers reviewing top-up policy that is likely to be ready in the next month.

When people look at the US healthcare system, they imagine that private healthcare has to be hugely expensive. But the reason it's expensive is because it's hugely over-regulated. Tax and regulatory rules promote insurance through employers – reducing individual choice and meaning you lose your insurance when you change jobs. You can't buy insurance across state lines – live in New York and you have to have a Rolls-Royce insurance plan of the kind New York specifies: you can't buy a SmartCar plan, even if that suits you better.

And of course a rising part of the US healthcare system is the federal Medicare and Medicaid plans - bigger than the UK National Health Service, and growing fast:, according to the CBO, Medicaid and Medicare alone will absorb 20% of GDP in 70 years' time.

There are some proposals to open up the insurance market: a standard personal tax deduction rather than favouring employer-based plans, allowing choice across state lines, and so on. But there are promising new alternatives too. Pioneered by drugstore chains CVS, Target and Walgreens, more than 1500 retail health clinics are now in operation, up from 800 last year. Wal-Mart plans to open another 400 by 2010.

Wal-Mart will lease space in their supermarkets for drop-in clinics run by local hospital and other providers. Nurse practitioners  will staff them, and they will be open seven days and evenings each week. They will provide basic services and will refer more serious cases to doctors and hospitals. Prices will be typically in the $40-$65 region.

People will be able to get quick, cheap, convenient diagnostics, even if uninsured (about half of Wal-Mart clinics' patients are uninsured). That will break the physicians' monopoly, which will have very positive effects on driving down US healthcare costs more generally. I only hope that the Wal-Mart clinics come quickly – before the doctors lobby to outlaw them and restore the regulatory sclerosis that they naturally favour.

...but misses the point about markets.

At an event hosted by the think tank Reform, Nick Clegg became the first of the three leading parties to commit to allowing patients to top-up their healthcare.

‘I'm a liberal. We cannot continue to deny people the right to top up their care’ he announced.

Good – as Tom has written here, preventing patients from topping up their NHS care privately is immoral, impractical, incoherent and (quite possibly) illegal.

However, the Lib Dem leader also rejected plans to move towards an insurance-based health system. Under Reform’s proposals patients would receive a healthcare premium of £2000 per year, which they would then us to purchase health insurance from a range of Health Protection Providers.

He also backed away from the idea of forcing Primary Care Trusts to compete with one another, instead advocating the option of creating local, electorally accountable PCTs with responsibility for the residents under their care. Such a move would, he maintained, remove some of the control that that Department of Health has on the NHS. The state would, however, continue to play a role in the distributing resources, setting standards and altering patient premiums to reward GPs who work in deprived areas.

Of course, what Clegg misses is the fact that, if left to the market, patients, rather than being given a chance to vote just once every few years for a Local Health Board, would vote every time they made a decision on where and in what form to purchase their healthcare. A real market in healthcare would give patients the right to choose and switch providers, thus driving up standards, increasing innovation in healthcare delivery and empowering patients - benefiting the many and not just the noisy few.