Examination of Witnesses (Questions 1
THURSDAY 19 JANUARY 2006
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
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
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
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 chargesand I do not have
a figure for youthat 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 ministersI think,
in the same way that many of the benefits areand 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 muchend 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,
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
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
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 Schemewhich 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
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
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
Note by witness: Individuals with medical exemption have
an average of 33 prescription items per person per year. See answer
to Q19. Back
Note by witness: Estimated from a sample, when rounded
the final figure is near 45,000. Back
Note by witness: Citizens Advice suggested monthly payments
for a PPC not a one month PPC Back
Note by witness: Correct figure is 33 prescription items
per person per year. Back