Clearly, the substantial majority opinion in this country is that the NHS should remain free at the point of use. The reasons are also clear. Illness and disease, accident or medical trauma have no respect for time, place or circumstance - the poor are just as likely (if not more) to suffer as the rich. Common humanity and decency demands that the less well off have equal access to and service from the available medical capacity and expertise as the (often rather accidentally) bettter-off.
There are, though, some economic problems with this judgement. If the service is to be provided free at the point of use, then the demand for the service will be where the total demand curve intersects the horizontal (quality adjusted) quantity axis. This implies a greater quantity/quality than if some price were charged, perhaps very substantially greater, since the underlying demand might not be linear. Why? To the professionally cynical economist, it suggests that some of the demands will be frivolous or extravagent, since someone else is paying. It is these that would be eliminated (no doubt with others more serious and worthy) if some (even relatively low) price were charged.
But, if the public sector (government and taxpayers) are not willing to provide sufficient NHS capacity to meet this absolute or complete level of demand at zero price, then some form of rationing will have to occur. This rationing appears as waiting times for treatment; as giving lower priority to less acute or non life-threatening conditions. If the waiting times get long enough, the chances are the conditions will disappear. We rely on the medical profession to eliminate the frivolous and extravagent demands and eject the malingerers. Which is a tall order, both on the personal level of individual contact, and at the professional level, since there will always be professional doubt about such judgements; and substantial professional liability if the judgement turns out to be wrong.
Inevitably, those rich enough to pay for additional service will find a way of obtaining this extra service and will, in effect, jump the queue. Some form of private health care is inevitable, even if attempts are made to make it illegal - which would, in any event, contradict the principle of freedom of thought and action for the individual (within socially acceptable reason). The demands for private treatment will grow as the level of service offered under the NHS deteriorates because of lack of funds and resources.
On the supply side, the potentially greater returns for medical professionals in private practice can be expected to encourage some to divert their effort from the NHS. Though we might also expect that medical professionals are driven by more than simply monetary reward and that the psychological reward of being of service will reduce this naked economic effect (presuming greater psychological reward in the NHS than in private practice). However, this professionalism will also (thank goodness) prompt a continual search and research for better treatments, diagnoses, drugs and protocols. These new techniques may, at least at first, tend to be more expensive in resource and cost than the conventional treatments etc. But, once known and proved, will become the standard practice.
This tendency for the service to become more extensive and of higher quality is a natural consequence of scientific advance. Whether or not this advance need necessarily be also more expensive (which appears to be the case in the medical world) is another matter. Techological and scientific advance in other sectors (with the exception of defence or publicly funded space programmes) has the opposite character - things become cheaper and easier to do. We spend more on things because we are richer, not because things become more expensive - computers, cars, airplanes, domestic appliances are all good examples.
One possible explanation of the increase in medical costs is the fact that much of the drug-related research is done in the private sector. Three or four major multinational companies are in perpetual competition to produce the next wonder drug. Once found, this is patented and sold for a price typically far in excess of the actual cost of production, simply to provide a return on the investment in the underlying research, and pay for the inevitable dead-ends and research "failures". But each of the companies is running an essentially similar research complex, so that, in effect, the premium paid on the sucessful drugs is perhaps four times as great as it needs to be. In this case, perhaps, a monopoly drug company would be in the public interest - given the appropriate regulation and incentive to be efficient as well as effective. In this sense, drug company mergers might be a good thing.
Another explanation is that the lack of commercial discipline in the end use (or simply the common presumption that health is invaluable) is responsible for the continual escalation in the expense of medical services. It is, perhaps, instructive that defence and space programmes (and many other publicly funded programmes) suffer the same problem, in contrast to the commercial world.
More generally, the better the medical service becomes, the longer people live and the more likely it is that they will suffer need for medical service, and the more likely it is that when they do, it will be for a service towards the frontier of medical knowledge, and thus more expensive to try and treat. Similarly, the richer people get, the more health they will demand - being less content to suffer from chronic conditions than their less well-off ancestors.
Solutions?
There seems little doubt that the UK needs to spend more on its health service to meet the demands of the people who pay for it - the general public. The UK spends a significantly smaller fraction of its total income on health than many comparable countries on both sides of the Atlantic. But how can we spend more? And with what safeguards? Increasing taxes to pay for more service is an obvious answer, but is apparently resisted by our elected government (no doubt with the tacit support of our elected opposition), despite opinion polls which seem to show that people would be willing to pay higher rates of tax for this particular purpose (and also, possibly and incidentally, for a better and more extensive education system).
We already pay something called a National Insurance contribution as a payroll tax (with a rather low upper limit). It might be possible to raise more money through a similar route - a specific (hypothecated) health service tax, as a specific and progressive additional tax on income, whose receipts would be dedicated to the health service. The Treasury has traditionally been dead-set against hypothecation - it reduces the power of the Treasury to control public spending by playing off spending ministries against one another.
Other countries (e.g. Canada) have a compulsory health insurance system, under which everyone (with exceptions for the seriously poor and disadvantaged) is required to hold and pay for their own health insurance, provided by a single quasi-public company. Such a system, perhaps with income related graduated premia, would provide additional funds.
The other major issue, apart from the level of funding, is the control of costs, or equivalently, the incentives to be efficient as well as effective. The previous (Tory) government thought that an "internal market", in which parts of the NHS paid for the services provided by other parts and accounted for the incomes and spending so generated, would be a solution. However, the antipathy this generated within the service, plus the high transaction costs (bureaucracy and rigidity) of the system, have demonstrated that this solution was ill-thought through. Nevertheless, some understanding of the trade-offs and costs generated throughout the system by professional medical decisions does seem essential.
At the least, substantial resource pressure (lack of funds) does provide an incentive for these issues to be recognised, discussed and addressed. Unfortunately, however, so long as general public opinion is that we do not spend enough, much of this debate degenerates into scare-mongering and special pleading.
So, what do you think? Suggestions andcomments to DRH