Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)



  Q1  Chairman: Welcome to the first evidence session that we are taking on our inquiry into NHS charges. I wonder if I could ask you to introduce yourselves.

  Dr Harvey: I am Dr Felicity Harvey and I am head of Medicines, Pharmacy and Industry Group within the Department of Health. My group looks after prescription charge policy and the NHS Low Income Scheme.

  Mr Brownlee: My name is Mike Brownlee and I am Dr Harvey's deputy.

  Mr Smith: My name is Rob Smith. I am Director of Estates and Facilities Management, which covers car park issues and patient telephones and patient televisions.

  Dr Cockcroft: I am Barry Cockcroft. I am Acting Chief Dental Officer for England, responsible for professional advice within the Department of Health on dental issues.

  Mr Dyson: I am Ben Dyson, I am Head of the Dental and Ophthalmic Services Division within the Department of Health.

  Q2  Chairman: Thank you very much. I wonder if I could start with the first question, directed to any or all of you. You will have probably heard this comment before: Lord Lipsey of the Social Market Foundation described the current system of health charges as "a dog's dinner, lacking any basis in fairness or logic". What are the underlying principles of the system that we currently operate?

  Dr Harvey: The charges we currently have for prescriptions, dental treatment and ophthalmic services date back to 1951 to 1952. That is the time that charges were first introduced. Certainly, if you look for prescription charges, they remained until 1965, were abolished, and then reintroduced due to concerns, we understand, about the rising drugs bill in 1968. The policy on the individual areas has very much related to the clinical services which they support. Certainly in terms of prescription charges, the policy in terms of the broad levels of exemptions, has been relatively unchanged really since 1968. I do not know whether my colleagues on the optical and dental services would like to comment from their particular perspective.

  Dr Cockcroft: From a dental point of view, the system of charges for patients is based very much on the way the clinicians are remunerated for the services they provide. It has been a constant source of complaint for some time, both the complicated way we remunerate dentists and the complicated way in which patients therefore are charged. That has been a really difficult issue for the last few years. We have just been through a programme of reform of patients' charges, with significant patient involvement. A significant message from the patients was that we needed a much simpler, clearer system, and that fits very neatly into the reform of the way we remunerate dentists which we are going through at the moment. We are addressing that issue at the moment in the dental charges.

  Mr Dyson: If you look at charges for dental services and the system of the NHS sight tests, successive administrations have taken the view that it is reasonable to ask those who can afford to do so to make a contribution to the cost of those services. I think it is also important perhaps to distinguish between some of the factors that may have led the governments of the past to introduce such systems. If you look back, for instance, to 1951, there were special circumstances that surrounded dentistry, with, I think it is fair to say, an unexpected level of demand for dentures, so different factors may have influenced the introduction of those charges in the   first place. The decision that has faced administration since then has been more about whether to continue with these systems or whether to abolish or alter them in some way, and of course different considerations then come into play. Governments have had to take into account the contribution which the system of charges makes towards meeting the overall costs to the health service; they have had to take into account the fact that there is little evidence to suggest that those charges produce poorer health outcomes; and they have had to take into account the fact that these systems are now well established and, broadly, I think it is fair to say, accepted, in the sense that, where we receive concerns from patients about, for instance, dental charges, as Dr Cockcroft says, these tend to be more about the structure of the system than about the principle of charging per se.

  Dr Harvey: I think underlying all of this has been the principle, for those areas in which the Government decided that charges should be levied, that those that are able to contribute should do so and those who are unable to contribute should be protected through either benefits or, indeed, the NHS Low Income Scheme.

  Q3  Chairman: My colleagues will be taking one or two of these matters up on a more individual and focused based later on. Whilst you cover the areas that you have outlined to us, you will not be immune to the debate that is taking place in different parts of the United Kingdom about the potential to abolish prescription charges. I wonder if you have any views on what the costs of abolishing charges would be in terms of prescriptions, optical and dental services.

  Dr Harvey: In terms of prescription charges, at the moment they bring in an income of about £427 million per year (estimate for 2005-06). Over the last year, that has fluctuated slightly: £422 million (2004-05), £426 million (2003-04), but it is roughly in that sort of area.

  Mr Dyson: In terms of dental charges, it is always slightly difficult to predict in advance exactly what level of dental charges are going to be collected, but the aim of the new dental charging system, amongst the benefits it brings for patients, is to make sure that we do not raise a greater proportion of charges than now. That would mean that abolishing that system would mean that the NHS would forego income of up to around £600 million. For sight tests, we estimate that if you were to extend free sight tests to all those who currently pay privately for sight tests, the costs would be about an additional £92 million, based on the current rate of £18.39 per test.

  Q4  Chairman: Are both of those figures, the £92 million and £600 million, per annum?

  Mr Dyson: Yes.

  Q5  Chairman: Was your figure per annum, Dr Harvey.

  Dr Harvey: It is a per annum figure.

  Q6  Chairman: That would be the costs of abolition, effectively, as far as England is concerned.

  Mr Brownlee: I wonder if I might add, in terms of prescription charges—and I do not have a figure for you—that we believe there might also be an influence on the drugs bill, in the sense that, for some of those people who are currently paying charges and perhaps go to their community pharmacy and buy a medicine over the counter, there might be an incentive to go to their GP and get a prescription. But it is almost impossible for us to forecast potential changes in behaviour, and one has to say that, if you compare the growth of the drugs bill since 2001 between England and Wales, since the Welsh Assembly decided to start reducing their prescription charge there has not been any noticeable change in trend.

  Q7  Chairman: Is there any evidence that charges should be increased, on the basis that if they were increased people would seek to take responsibilities for their own health as opposed to relying on the National Health Service?

  Dr Harvey: From the prescription charge perspective, certainly the prescription charge has been looked at in recent years annually by ministers—I think, in the same way that many of the benefits are—and there has not been any decision to raise them significantly in recent years. Since about 1997, the increase has been 10p per year, which actually, if you look over the period, that particular period, is in fact a real terms decrease of 4.5%. I think the Government is very well aware that there is an issue of affordability. Certainly, from the work that was done by Citizens Advice and the MORI work back in 2001, we are aware that there are some low-income groups where a huge rise in prescription charges would be very difficult. In fact, a lot of the work we are doing through the Prescription Pricing Authority is for the prescription charge that we currently have, trying to get better and better at targeting those low income groups, so that they are aware not only of the benefits that are available to them through the Department of Work and Pensions but also the NHS Low Income Scheme.

  Q8  Chairman: Do you think this is flexible enough at this stage, or do you think there is a level of inflexibility about it leading from that?

  Dr Harvey: Certainly, in terms of the NHS Low Income Scheme and the information we have been aware of through the Citizens Advice work and other work that is being done by academics such as Professor Peter Noyce, we have tried over that period to make some minor amendments to the NHS Low Income Scheme so that it is slightly more flexible in terms of meeting the needs of those people who have low incomes.

  Dr Cockcroft: With regard to dentistry, patients' charges have always been calculated as a percentage of the fee the dentist receives, so there has always been a direct link between the percentage increase in dental fees paid to the dentist and the patient's charge. That has been there since the dental charges were introduced. From April next year, that link is taken away, but we have been involved with patients' groups in working out the new system of patients' charges, and we have not detected the intention to make any increase in dental charges disproportionate in the new system.

  Q9  Dr Stoate: Just for the record, could I start by reminding the Committee of my declaration in the Members' interest book that I am still a practising GP. We have heard from Dr Harvey the reasons why we have charges and how it happened, but I have not yet heard the underlying principles behind it. Are we really saying this is about raising money, reducing demand on services or reducing the drugs bill?

  Dr Harvey: The fundamental principle that we had back in 1951-52 is historical. I could not tell you exactly why the charges were decided to be made on those particular things. We do think that back in 1968, when prescription charges were reintroduced, there may have been concerns about the NHS drugs bill at that time.

  Q10  Dr Stoate: But that does not answer the question as to why particular conditions were singled out. If the Government was simply trying to reduce the cost of prescriptions, why was there not simply a blanket charge for prescriptions? A prescription costs this much—end of story. I still have not understood the principles behind it.

  Dr Harvey: Historically, in terms of why particular medical conditions were chosen, it is something that happened in consultation with the medical profession back in 1968. Those conditions have been unchanged since that time, even though we have had representations from a number of different chronic disease condition groups. But the principle has really been around that of: those who can afford to contribute, should do so, and that we protect those who have difficulty in affording charges. That has really been the basis of the changes that have taken place in recent years.

  Q11  Chairman: This sounds suspiciously like: We have always done it and therefore we are carrying on doing it. You still have not explained to me. The prescription charge principle having been put in place nearly 40 years ago, no-one seems to have challenged the reason why it was brought in and why we have not changed it.

  Dr Harvey: From what we understand, the issue of the particular medical conditions that we have at the moment, which date back to 1968, has been looked at on a few occasions but on each of those occasions ministers have made the decision not to add or change the list of medical conditions that are exempt from prescription charges.

  Q12  Dr Stoate: Does that mean that no serious consideration has been given in that case to a more flexible system or an alternative system completely. For example have we looked in detail at some of the European alternatives? Have we really considered in detail what other countries do, in Scandinavia, for example, or have we simply said, "We do this, therefore we have to carry on doing it"?

  Dr Harvey: On the occasions when ministers have looked at prescription charges, they have not made any decisions to change from the broad principles that we currently have. I think there is also an issue in terms of the medical conditions that we currently have. Clearly there are now very many chronic medical conditions that we are able to treat and treat very effectively. I suppose the issue is that, if you have a large number of medical conditions, where might one draw the line? The approach has certainly recently been in terms of affordability and trying to ensure that those who would have difficulty in paying are protected. The other thing that it would be worth adding is that certainly with the pre-payment certificates that are now administered by the Prescription Pricing Authority (PPA), we now have a maximum charge for prescription charges annually of £93.20, or, for a four month period, of £33.90.[1] If you look at the number of prescription items for the exempted groups, they are quite a lot higher than the average. The average number of prescription items per person per year is about 14. If you look at those people who pay for their prescriptions and have the pre-payment certificates, it is about 46 items per person per year, and, if you look at those who are medically exempt, I think it is about 23[2] prescription items per year. But I think we should also remember that, in terms of prescription items, currently 87% of prescription items are exempt prescription charges. So it is only 13% of prescription items where a charge is paid and in fact 5% of prescription items are paid through pre-payment certificates.

  Q13  Dr Stoate: When you talk about affordability, which I would like to come on to now, figures we have seen from Which?, for example, show that 6% of those on low incomes fail to take courses of prescribed medications because of cost and 24% fail to consult a dentist for the same reason. Certainly, as a GP I can recount many occasions when people have said to me, "I simply cannot afford three prescriptions, which one can I do without?" My pharmacist colleagues say exactly the same thing: people will take their prescription to the pharmacist and have quite a difficult discussion sometimes with the pharmacist about which of the medications they can strike off, which cannot possibly be good for patient care. You talk about equitable charges and you talk about affordability and yet there is very good evidence from a number of sources that some people simply are not getting the drugs their doctor says they ought to have because of cost.

  Dr Harvey: We are very conscious, particularly, of the Citizens Advice work that was done in 2001 and, indeed, Professor Peter Noyce's work around the same period, and, it is as a result of that, that in 2004 we made the change to the NHS Low Income Scheme which increased the level by which income exceeds requirements for the Low Income Scheme to include half the cost of a prescription. Particularly for those people on incapacity benefit, who are not passported automatically to free healthcare costs and they would have to apply through the NHS Low Income Scheme, we are aware that from that change about 44,000[3] additional people within income benefits, who were only able to have partial help before that, became able to have full help. We are very much aware of these issues, which is why there have been the changes to the NHS Low Income Scheme—which include giving people over 65 five-year exemption certificates rather than the 12 months which we have for other people.

  Q14  Dr Stoate: People who are 60 do not pay prescription charges at all.

  Dr Harvey: But they do pay for dental, optical and also health care travel costs.

  Q15  Dr Stoate: Nevertheless, whichever system you bring in, there are going to be people above the threshold level. Whatever you do to the threshold level, there will always be people just above it. Have you considered a tapering scheme to help such people?

  Dr Harvey: Again, as a result of the work that has been done, the PPA, who took over the administration of the pre-payment certificate in October 2002, have been looking at the recommendations that came from Citizens Advice, which were things such as: Have we considered monthly payments for the pre-payment certificate?[4] and also: "Have we considered doing something through the Low Income Scheme in terms of a sliding scale"? These are issues which the PPA has been looking at. We think they are due to be coming to ministers in the not-too-distant future.

  Q16  Dr Taylor: Dr Harvey, I think you have lost me and I would like to go back over some of this mass of figures you have given us. First, you have said that the principle is that: those able to contribute should and those unable to should be protected. I fear that is going to raise an absolute furore, because there are many who could contribute a great deal more who are exempt and there are many . . . Think of somebody with hypertension, who has to have at least a combination of three drugs, all separate, who is on a low income but not sufficiently low for them to be free. Three charges, three times £6.50 a month, is a vast amount. People are exempt, on average, 23 items per year. Is that what you said?

  Dr Harvey: People who have medical exemption I think have about 23[5] prescription items per person per year on average.

  Q17  Dr Taylor: Then, for those who were not exempt, you said it was something like 46.

  Dr Harvey: Those who have a pre-payment certificate, which is 5% of prescription items, they have on average 46 prescription items per year.

  Q18  Dr Taylor: Obviously they are people who are not exempt, who know they are going to have to pay an awful lot, pre-paying, so that they pay a bit less

  Dr Harvey: They pre-pay, which means that the maximum they would pay, with a 12 months certificate, would be £93.20 per annum.

  Q19  Dr Taylor: I find the 23 items per year for those exempt relatively small.

  Dr Harvey: I am sorry, I apologise I made a mistake. In fact it is 33 items per person per year for those who are medically exempt. My apologies.

1   Note by witness: Pre-payment certificates (PPCs) have been available since 1968 and the arrangements have been administered by the PPA since October 2002. Back

2   Note by witness: Individuals with medical exemption have an average of 33 prescription items per person per year. See answer to Q19. Back

3   Note by witness: Estimated from a sample, when rounded the final figure is near 45,000. Back

4   Note by witness: Citizens Advice suggested monthly payments for a PPC not a one month PPC Back

5   Note by witness: Correct figure is 33 prescription items per person per year. Back

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