Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 500 - 519)



  Q500  Chairman: Being a mutual, do you see trends in terms of the money that you are paying out for NHS charges? Are they reducing, are they increasing? Are there any differentials that you measure now when 10 years ago it was not like that?

  Mr Hurn: Cash plans pre-date the NHS and have been in existence since 1922, some of them since 1895, so the premise for paying charges has existed for a very long period of time. What we see is that as   Government policy is changing and NHS behaviours are changing the needs of our members and their claims behaviour changes. I will give you a couple of examples. One is dentistry and another one is that, just over a year ago when the four hours in A&E targets were introduced and people were being admitted to the ward, we saw a corresponding increase in hospital inpatient stay. What we paid for traditionally was when people used to have loss of income but these days it covers not only loss of income but also a number of the other charges that have been spoken about—telephone charges, car parking charges, so we help to mitigate the impact of those costs.

  Q501  Chairman: Do you expect, with this concept of out-of-hospital care, to see changes in that way, that people will not be staying in hospital as long, or indeed may not even be going in in a few years' time compared to five years ago?

  Mr Hurn: I think there is a difference there in that we pay for the event, not necessarily the location. We do have a hospital inpatient stay plan but we also have outpatients and day surgery, so whatever the location of that service is we will still pay for the event. We pay for what the member needs, so whenever the member accesses that within an NHS trust setting or at home or in a GP surgery, whatever the case may be in the future, we will still pay for those. Effectively what we will see is a change of location but not necessarily a huge change in behaviour.

  Mr Hall: My experience is that we have seen average length of stay in hospital change quite dramatically over the last decade or so from probably seven and a half to eight days, if we go back about 15 years, now down to about two and a half days and that is predicated by the growth in outpatient treatment and day case surgery.

  Q502  Chairman: Do you think that there is going to be any major change as far as your insuring the patient side is concerned in the future with the proposed changes that are about to take place?

  Mr Hall: Yes, I suspect so. Originally, because people were hospitalised for longer periods, there was an expectation that they wanted a private room with an en suite because they knew they were going to be there for some time. Given the choice most of our customers would rather not spend any more time in any hospital than they absolutely need to, so being able to be treated quickly and efficiently with good outcomes, either on an outpatient basis or as a day case, is a preference.

  Q503  Chairman: In the medium to long term is that a threat to your business?

  Mr Hurn: No.

  Mr Hall: No, not at all. In fact, if anything, if the move is towards more cost effective treatment in a more appropriate setting, then obviously the premiums we charge for access to that may be lower.

  Q504  Charlotte Atkins: Mr Hurn, we were looking at your evidence and obviously you say that payments should be affordable to all. You recommend a broadening of charges or the establishment of an affordable shared responsibility premise-based charge. I am not quite sure what that means. Can you extrapolate for me?

  Mr Hurn: If you put it in the context of what we do, we have people contributing to a fund of money and these are people who are employed and who tend to be blue collared workers. People have access to that fund on pre-agreed terms and therefore what they have access to they have full knowledge of and it is clear and easy to understand. This is not only driven by our values but also by the FSA, whereby we have to be fair and open to our customers, so therefore they know and realise the implications of them making a claim, not only as to what they are entitled to but also as to the impact on the rest of the group. They therefore have an understanding that there are not unlimited funds, that this is not open-ended, and an understanding of what they are entitled to as a form of responsibility to the rest of the group who are contributing to that. I do think that sometimes public perception of what the NHS entitles them to, of what the open-ended cost would be, is misguided, especially looking at future funding of the NHS and extra services being provided. It is not open-ended. There must be a realisation by people that there is only so much money that we can utilise in one way or another. I think it is part education but it is also part understanding of their behaviour that needs to be brought to people's attention.

  Q505  Charlotte Atkins: So you would very much favour keeping NHS charges and not going to a fully funded system out of general taxation?

  Mr Hurn: We think there is an existing premise for NHS charges and, as I have said, charges pre-date the NHS, but I do think we ought to look at mitigating the impact of those charges because there are a number of people in society who do presently find themselves hugely impacted by charges because they are not on certain benefits but they are not top earners in society and therefore £189 for dentistry, for instance, can make a tremendous impact on them come the end of the month.

  Q506  Charlotte Atkins: Would you like to make a comment, Mr Hall?

  Mr Hall: The issue for us goes back to the customer or, in the case of the NHS, the patient. Our view is that we should conduct research amongst the customer base, the general public. We know from research we have done that the majority of a cross-section of people we researched, and that is the general public, not our customers, favoured charging as a means of accessing better quality healthcare. There is a strong vote in favour of paying charges. Only 25% of them thought that taxation was the best way to do it so more than double that believed that having control of paying charges themselves was a better solution. The issue is that no-one actually knows what the public would value in terms of charges, which services they would pay for and under what circumstances. Our view is that any charges should be tapered. To have a position where there is a very fine line between when you pay and when you do not pay does not seem equitable to us either, so our view is that it should be tapered according to their income and their situation. It should not just be that you pay 100% or you pay nothing.

  Q507  Mr Campbell: In the survey that you took of the general public, are we looking at a case of, "I am prepared to pay if I can get in quickly and get my operation before everybody else"?

  Mr Hall: It was not the question we asked them.

  Q508  Mr Campbell: Why did you not ask them that because that does happen when you are paying? If somebody asked me that I would say, "Yes, I will pay for it if I can get in quick", because people have to wait a long time.

  Mr Hall: That may well be true, that that was the motivation for some people's answers to would they contribute.

  Q509  Mr Campbell: I am sure it was.

  Mr Hall: But that is my point, I think, about asking them what services under what conditions they would pay for, and if a more timely service was something that people would contribute to, thus raising money within the NHS to pay for improved services for everyone, that would seem to me to be a fairly equitable way of distributing those contributions.

  Q510  Mr Campbell: What you are saying there though is that they who can pay get it done and they who cannot have to wait and hope they get the money out to get them there.

  Mr Hall: The question we asked them was how they would want the issue of increasing healthcare costs to be dealt with, so it was in the context of a recognition that the cost of healthcare generally was increasing. As I say, over half of them answered in the positive, that they would deal with the increased costs of healthcare by making personal contributions. It was the increased costs of healthcare per se rather than the issue of waiting times or waiting lists.

  Q511  Jim Dowd: Let us clarify that. The truth of the matter is that we all pay for healthcare. The question is, by which route. Are you saying that survey was your policy holders or the general public?

  Mr Hall: The general public.

  Q512  Jim Dowd: Just so that I am perfectly clear about this, is it a variation on the theme that people actually value more things they pay for rather than things that they get, ostensibly, for nothing?

  Mr Hall: I think that is a truism in life generally. One of the issues that I believe exists is that there is no notion of value currently.

  Q513  Jim Dowd: Why? Because the service is free at the point of use?

  Mr Hall: Yes. That is not an argument to say it should not be; it is an argument to say that people should have the notion of value, so when we reimburse our customers' costs, even though they do not pay, we do send them a copy of the bill so that they understand the value of the healthcare they have consumed. We have done separate research to try and ascertain the extent to which the public do understand the costs of healthcare, not just ours but in the NHS as well, and that would seem strongly to indicate that there is no notion of value. I think only about one in 10 of the people we surveyed had anywhere close to the cost in the NHS of doing a hip replacement, for example. Most of those other nine were woefully low in their estimation of the total resource cost of providing that service. I think that is a problem. It is a problem that we are consuming something that we have no good notion of value about.

  Q514  Dr Taylor: I was going to ask you what sorts of things the public would be prepared to pay for but you have said you cannot answer that. Is one of your ideas of the open public consultation you mention in your memorandum to get at just that, what people would be prepared to pay for?

  Mr Hall: Absolutely. We are a strong advocate for having a system by which the public can contribute themselves to the debate in saying, "These are the things I would value, these are the things I would pay for". It must be a better system to have people contributing to the things that they think make a difference and that they would personally value rather than the current system, as I said before, which has been developed in a piecemeal way, which people do not understand and which lacks that element of equity.

  Q515  Dr Taylor: You mentioned that charges should be tapered. Would that be on a means tested method or how would that be?

  Mr Hall: I am not an expert in terms of how one would taper it but it does not seem logical to me that I could get free prescriptions and somebody else on a lower income, simply because they were not retired, could not. Likewise, it would not seem logical to me that somebody who was unemployed could get access to services at no charge, yet somebody on a low wage would have to pay the full charge rather than only part of the charge.

  Q516  Dr Taylor: This point has been made to us by many people. Health savings accounts: are these one of your ideas and, if so, could you tell us a little about them?

  Mr Hall: Yes. It is premised on a number of things. The first one is that we tend to have been a society fixated on delivering the results of ill health rather than focusing on the benefits of good health. I do not think we have a society where health and wellbeing play enough of a prominent role. I think it makes sense to find ways to incentivise people to take more responsibility for their own health and wellbeing, and that is easier said than done, of course. One of those ways, we are suggesting, could be through the notion of the health savings account, a tax efficient way, in the same way that cash ISAs are a tax efficient way of saving, that could be used in part or in whole to contribute either to the consumption of healthcare that is charged for or for other health related services that are deemed by the Department of Health or the Government to be beneficial to health and wellbeing. Whether that is gym membership, whether that is diet or other elements of exercise is not my area of expertise, but it is the notion of encouraging people to save and to spend from those tax efficient savings in that way. We also considered the concept of a health incentive card. In the same way that commercial enterprises use cards for loyalty schemes why should it not be that you could earn points on, for example, buying fruit and vegetables? That would attract points, and maybe gym membership would attract points or other things deemed to be contributing to health and wellbeing could earn points that could be redeemed either in terms of the health savings account as a cash incentive to that account or in some other way. I think at the moment there is a complete lack of incentive to address the issue of health and wellbeing or saving against the costs of healthcare.

  Q517  Jim Dowd: Would you get your card taken off you for going to McDonald's?

  Mr Hall: No, but you would get points taken off.

  Chairman: Thank you very much for that, Mr Hall. I am quite interested in that type of concept in terms of a potential lifestyle influence.

  Q518  Anne Milton: Mr Hall, the point you raise about people being unaware of the costs is very valid and the big bee in my bonnet is prescriptions, that if people were aware how much the tablets in the bottle cost (a) I think it would increase compliance because it would encourage people to finish the course and (b) they would be aware of the huge cost of some drugs that are prescribed. I wanted to ask you both about the White Paper and the use of the private and not-for-profit sectors and whether you feel that in the light of the White Paper and the mention of those things it is more or less likely that charges will start creeping in?

  Mr Hall: I suspect that it is inescapable that, because of the demands on healthcare and the increasing costs of delivering healthcare, charging will be with us. At the moment my understanding is that current charges accrue at something like just over a billion pounds a year. That is obviously a significant sum of money and with the changing demographics of this country and the growing elderly population I think I am right in saying that in the next 25 years the number of people over 70 is going to increase by 70%. That is a fairly frightening statistic and that debate has already started in terms of pensions but is probably under-discussed publicly in terms of the impact on healthcare. I do believe that charging in some way, shape or form, which retains those elements of fairness and equity, will be with us in the long term. I think that is likely to increase rather than reduce, and therefore I think more innovative ways of identifying what should be charged for and having a mix of other companies, whether they be not-for-profit companies or commercial private sector companies making provisions in those areas, is a reality.

  Q519  Anne Milton: It makes it more likely?

  Mr Hall: Yes.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 18 July 2006