Select Committee on Health Third Report


161. The current system of NHS charges is a mess. In the words of Lord Lipsey of the Social Market Foundation it is "a dog's dinner". There are no comprehensible underlying principles to health charges. Age and income exempt some people, but this does not apply across the board. Pensioners are exempt from prescription and sight test charges, regardless of their income, but must pay for dentistry unless they receive help through the NHS Low Income Scheme. People with diabetes who require insulin receive free medicines for all conditions while people with diabetes controlled by diet must pay for all their medication.

162. Rather than improving health, charges deter some patients from seeking and obtaining care and can have a negative effect on health outcomes. Charges aim to reduce excessive or unnecessary demand for healthcare services, but separating the demand that is necessary from that which is deemed unnecessary is no mean feat. As Dr Harrison of the Kings Fund said:

    The general evidence…suggests that both are affected by charges. So charges do not distinguish between frivolous or inappropriate or unnecessary use; they are too blunt an instrument to do that.[195]

163. It is clear that the system needs to be reviewed. However, even after over 50 years of operation, there is a woeful absence of evidence about the effects of charges. It is known that harmful effects occur but they are largely unquantified. Similarly, we do not know what the consequences would be of making the changes to the charging system which we examined in the previous chapter. Accordingly, it is difficult at this stage to decide what should be done. We recommend that evidence is gathered on:

  • public attitudes to health charges,
  • the extent to which charges affect the use of health services and, in the long term, health,
  • the extent to which charges reduce 'frivolous' demand.

Nevertheless there are a number of short-term changes that should be implemented immediately to improve the situation.

Prescription Pre-payment Certificate

164. Changes to the Prescription Pre-payment Certificate (PPC) should be made to help patients on low incomes. Take-up of the PPC is low. We recommend the immediate introduction of a monthly Prescription Pre-payment Certificate (PPC). We also recommend that the annual certificate be pegged at the cost of 12 times the price of a single prescription. The monthly certificate should be pegged at the cost of one prescription. Those patients on the NHS Low Income Scheme should have access to the same benefits as all other patients. We recommend that a reduced price PPC be introduced for those receiving limited help through the NHS Low Income Scheme.

165. Once the NHS IT system is in place, we recommend that the Government consider introducing a yearly cap on payment for medicines, as is in place in Sweden. Such a development would mean that the PPC was no longer necessary. It would allow those who unexpectedly require many prescriptions within a short space of time to benefit in the same way as those who currently purchase a PPC in advance.


166. There are fears that the new dental contract will discourage preventative care, and that the numbers of people receiving NHS dental care will fall. The contract has not been in place long enough for an assessment of these fears. Concerns have been raised that the new dental contract may lead to some serious problems for dentists and for patients in the future. We recommend that the Department of Health after one year institutes a review to report on the effects of the new contract:

Sight tests

167. It is unacceptable that one-third of opticians do not sell spectacles within the NHS voucher value. We recommend that, as part of the General Ophthalmic Services contract negotiations, the Department of Health require all opticians practices to carry a range of spectacles within the maximum NHS voucher value.

168. During the inquiry witnesses expressed concern that too many people at risk of eye disease were not having sight tests. We recommend that the Department increase efforts to target people at risk of eye disease. All young children should be fully screened for visual impairment. The Department should look at eye examination schemes in place elsewhere in the UK with a view to implementing them in England.

Benefits and information to patients

169. Information to patients about health charges is poor and, as the Minister admitted, many people do not claim the benefits to which they are entitled in respect of health charges. It is thought that better information would improve this situation. We recommend that that all pharmacies, hospitals, and GP and dental surgeries make available to patients information on charges to which they might be liable, eligibility for exemption, and possible assistance with costs associated with attending for treatment.

170. The form which patients have to fill in to claim help through the NHS Low Income Scheme is lengthy and incomprehensible. We recommend the HC1 form should immediately be re-written in clear English. The form is often completed by patients already receiving other benefits. It could be avoided altogether if eligible patients were identified when applying for these benefits. We recommend that the Department of Health and the Department of Work and Pensions work together to find ways of automatically extending health charge exemption from means-tested benefits so that the HC1 form can be abolished.


171. For a variety of reasons patients now have to travel further and to less accessible locations than in the past. As a result the cost and inconvenience of travel have become increasingly important to patients and to their families and friends.

172. Many patients are unaware of the transport schemes available, or find it hard to access those schemes. We recommend that the Hospital Travel Costs Scheme be extended to cover patients attending for treatment at primary care facilities, in accordance with Our health, our care, our say. Consideration should be given to including dental surgeries under the scheme where patients have to travel considerable distances to access care. Information provision on the HTCS and the Patient Transport Service should be improved to increase uptake of the schemes.

173. The friends and families of hospital patients often are unable to visit due to the cost of transport. While it would be impossible to extend the Hospital Travel Costs Scheme to all hospital visitors, there are some groups who would benefit significantly from such an extension. Prisoners' families receive financial assistance to visit those in custody; we suggest that a similar system should be in place for low-income visitors to specific groups of hospital patients. We recommend that the Government consider extending the Hospital Travel Costs Scheme to some hospital visitors on low incomes (for example, to those visiting long-stay mentally ill patients for whom it may be particularly important to maintain links with family and friends).

174. The provision of parking spaces and the level of charges should remain a matter for individual NHS trusts to decide upon according to local circumstances. However, allowances should be made for frequent attendees. We recommend that the guidance on car parking arrangements be reissued by the Department of Health. It should recommend that trusts:

Bedside telephone charges

175. The cost of incoming calls to hospital bedside telephones is unacceptable, but the providers are not wholly responsible for the problem. Ofcom described the high prices of inbound calls as, "a result of a complex web of Government policy and agreements between the providers and the NHS…and not as a result of unilateral conduct by the providers themselves."[196] We recommend that urgent consideration be given to short-term measures that could be taken to reduce the costs, such as shortening the recorded message and making it avoidable. In the longer term, we recommend that hospitals should make greater use of the bedside units as soon as possible, since this would reduce the costs of incoming calls. It is an utter waste for these units, which could contribute significantly to the transfer of information within hospitals, to be used as little more than glorified telephones and televisions. If the NHS cannot make use of the additional services in the near future, the Department should pay the difference in cost between the standard rate and the amount charged by the companies. Patients' relatives and friends should not be penalised for the Department's failings.

176. We are not convinced that the ban on mobile telephones in hospitals is solely a result of possible interference with medical equipment. If used sensitively, mobile telephones will not compromise patient care. We recommend that, provided they do so sensitively, patients and their visitors should be able to use mobile telephones within certain areas of hospitals.

Longer-term changes

177. The minor recommendations detailed above will lead to small improvements for patients, but will not address the fundamental problems in the current system of health charges. We have examined a number of options in Chapter 6 of this report, and have outlined the positive and negative consequences of several alternative charging systems. It is clear and has been a constant theme of our inquiry that the evidence is not sufficient to reach a conclusion regarding a better system. Little work has been done in this country on the costs or benefits of the different possible systems. This work needs to be done urgently so that an alternative charging system, with consistent underlying principles, can be developed. We recommend that the Government establish a review to examine the costs and benefits of the following:

The terms of reference and results of the review should be published.

178. The use of a limited NHS formulary of medicines, possibly linked to reference pricing, could reduce the drugs bill and improve prescribing practice. We recommend that the Government look at this and respond to us specifically on this matter.

179. In the future, the NHS may not be able to pay for every possible medical treatment in a country with an ageing population, demographic pressures, rising public expectations and increased possibilities of medical treatment and long-term therapies. Some treatments or procedures may have to be charged for. The Government should consider this possibility sooner rather than later to ensure that a set of consistent criteria apply to those areas for which a fee is charged, to avoid the development of charges in an ad hoc way, as has been the case until now. With the introduction of such a system, it may be possible to abolish health charges which currently have a negative effect on health outcomes. We need to assess the challenge now and avoid the risk of new charges being introduced in an ad hoc way, as they have in the past. The Government should review the costs and benefits of an alternative system of health charges. The key principles that should be considered in this review are:

  • services that are clinically necessary should be free;
  • fees should not deter patients visiting their doctor or accessing healthcare; and
  • any system chosen should be adaptable (to changing medical practice, treatments etc) and consistent.

The review should include:

  • the possibility of establishing a package of core services which would be free (these might include prescriptions and dental care); and
  • a set of treatments for which the NHS could charge.

Treatments/interventions that are not cost-effective, such as branded drugs where an effective generic exists, could be subject to a charge. The use of charges to promote more responsible use of services could also be considered, including:

    • the introduction of a small charge for non-emergency patients presenting to A&E. This would encourage people to register with a GP, and make better use of out-of-hours services; and
    • a fee for patients who do not attend or fail to cancel GP or hospital appointments.

Q 139 Back

196   Letter from Ofcom to Secretary of State for Health, 17 January 2006 Back

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