Top-up fees - Health Committee Contents


Memorandum by Bupa (TF 27)

THE PURCHASE OF ADDITIONAL DRUGS BY NHS PATIENTS—"TOP-UP FEES"

EXECUTIVE SUMMARY

  Bupa welcomed the Richards' Review for two reasons:

    —  DH/NHS policy guidance on this matter was unclear and unevenly interpreted;

    —  Bupa expects funding pressures on the NHS in England to increase in the coming five years as rates in real annual funding increases reduce from 7%+ (2002-08) to 3%-4% (2008-10) to 1.5%-2% from 2010. Bupa's prima facie assumption is that this may increase demand for drugs that are not funded on the NHS.

  In 2006 Bupa commissioned a report[69] (Mind the Gap) on how to sustain improvements in the NHS beyond 2008. Bupa believes that the underpinning assumptions and concerns expressed in that report remain valid. The report summarised modelling of national healthcare needs up to 2015 undertaken for Bupa by NERA and reviewed by Frontier Economics. The modelling pointed clearly to the need for annual budget increases in the order of 4.9% (real) through the period 2008-15 if gains made in the period 2002-08 are to be sustained. The modelling assumed that the NHS makes real productivity gains of 1% a year through the latter period. The conclusion of that report was that the Government may need to use a combination of instruments (including NHS productivity gains, NHS co-payments, and private supplementary (top-up) up funding) in order to achieve the overall levels of funding necessary to meet the "needs" of patients through the period 2008-15.

  The Richards Review was a therefore a timely and useful vehicle for examining: the future demand for and supply of a key (but not the only) medical technology; and the optimal role of additional (non NHS) funding in the English health system.

  Bupa welcomed Professor Richards' key Recommendations 7 and 8. Bupa was pleased to note the Secretary of State's immediate and unequivocal acceptance and endorsement of these recommendations in his statement to the House on 4 November.

  Bupa also welcomes the Recommendations 1 and 2 in Professor Richard's Report.

  Bupa however has one important reservation about Professor Richards' report which it would wish to bring to the Select Committee's attention. The Professor's recommendations flow logically from his selection of "Option 3—Separate Care"—as his preferred option. Option 3 would have been Bupa's second choice.

  Bupa's first choice would have been "Option 2—Voucher Scheme". Only this option (amongst those identified) creates a situation where the role of additional financing would have become wholly "supplementary", according to the terms of the OECD taxonomy of health insurance. In lay terms, only Option 2 is a true and full "top up" option.

  The potential impact of such a change in role was illustrated in Bupa's submission to the Richards' Review by reference to Israel and The Netherlands. The Select Committee may wish to consider whether such a change in the role of additional financing is now (or may at a future date be) desirable and/or necessary in England.

  Bupa also wish to draw to the Select Committee's attention their analysis of the draft EU Directive on Cross Border Healthcare, published on 2 July 2008.[70] Bupa believe that if the draft Directive completes to EU co-decision process as published it will, in simple terms, lead to a situation where NHS patients will be able to travel abroad for treatment and be reimbursed up to a maxima of the nearest equivalent NHS treatment. In that case, if patients travel abroad, they will, in effect, have the freedom to "top up" found in "Option 2—Voucher Scheme". This may lead to a challenge through the European Court of Justice from an English patient who paid the greater expense of receiving additional care in England under Option 3.

INTRODUCTION

  1.  Bupa recognises that the NHS is a highly valued national institution that commands support across the mainstream political parties. Bupa also recognises both the unprecedented financial investment that has been made in the NHS over the past five years and the considerable political, policy making and managerial efforts that have accompanied that investment in order to modernise the NHS. Bupa has actively supported these reforms and participated in them. Bupa continues to support the NHS modernisation agenda, principally through its involvement in the NHS FESC programme and other support for World Class Commissioning. Bupa is also a major customer of the NHS.

  2.  As a customer focused organisation delivering diverse high quality health and care services to 10 million people across a number of geographic markets (including UK, Spain, Australia, New Zealand, Saudi Arabia, Hong Kong and USA) Bupa has considerable experience of delivering services that meet the needs of patients and consumers of healthcare which operate within a variety of funding systems alongside a significant state health system. Accordingly, Bupa hopes it can contribute real experience and practical examples to this important Inquiry.

  3.  Bupa welcomed the Secretary of State's announcement on 17 June 2008 that he had asked Professor Mike Richards to under a Review to examine policy relating to patients who choose to pay privately for drugs that are not funded on the NHS.

  4.  Bupa made a single submission to the Richards' Review, and the parallel Conservative Party Consultation, on 21 August.

  5.  Bupa welcomed the Richards' Review for two reasons: one, DH/NHS policy guidance on this matter was unclear and unevenly interpreted; and two Bupa expects funding pressures on the NHS in England to increase in the coming five years as rates in real annual funding increases reduce from 7%+ (2002-08) to 3%-4% (2008-10) to 1.5%-2% from 2010. Bupa's prima facie assumption is that this may increase demand for drugs that are not funded on the NHS.

  6.  In 2006 Bupa commissioned a report[71] (Mind the Gap) on how to sustain improvements in the NHS beyond 2008. Bupa believes that the underpinning assumptions and concerns expressed in that report remain valid. The report summarised modelling of national healthcare needs up to 2015, undertaken for Bupa by NERA and reviewed by Frontier Economics. The modelling pointed clearly to the need for annual budget increases in the order of 4.9% (real) through the period 2008-15 if gains made in the period 2002-08 are to be sustained. The modelling assumed that the NHS makes real productivity gains of 1% a year through the latter period. The conclusion of that report was that the Government may need to use a combination of instruments (including NHS productivity gains, NHS co-payments, and private supplementary (top-up) up funding) in order to achieve the overall levels of funding necessary to meet the "needs" of patients through the period 2008-15.

  7.  Bupa therefore welcomed the Richards Review as a vehicle for examining: the future demand for and supply of a key (but not the only) medical technology; and the optimal role of additional (non NHS) funding in the English health system.

BUPA'S REACTION TO THE RICHARD'S REVIEW REPORT AND THE GOVERNMENT'S RESPONSE AND THE GOVERNMENT'S DRAFT REVISED GUIDANCE ON NHS PATIENTS WHO WISH TO PAY FOR ADDITIONAL PRIVATE CARE

  8.  Professor Richards' Report was published on 4 November. On the same day the Secretary of State for Health made a statement in the House of Commons, outlining the Government's response. Simultaneously the Government issued draft revised "Guidance on NHS patients who wish to pay for additional private care". This Guidance was introduced with immediate effect—and is being consulted on in parallel by the Government (deadline for consultation 27 January 2008).

  9.  Bupa welcomed Professor Richards' key Recommendations (7) and (8) that:

    "The Department of Health should clarify the policy on how the NHS should handle situations where a patient wishes to purchase additional treatment. The objective should be to ensure consistency of practice across the NHS" and

    "The Department of Health should make it clear that no patient should lose their entitlement to NHS care they would otherwise have received, simply because they opt to purchase additional treatment for their condition."

  10.  Bupa was pleased to note the Secretary of State's immediate and unequivocal acceptance and endorsement of these recommendations in his statement to the House.

  11.  Bupa also welcomes the following Recommendations in Professor Richard's Report:

    Recommendation 1—re improving the timeliness of the NICE decision making process; and

    Recommendation 2—re promoting collaborative decision making by PCTs.

  12.  Bupa does not disagree with any of Professor Richards numbered recommendations—though it questions whether some of them should be a priority in the present economic climate.

  13.  Bupa however has one important reservation about Professor Richards' report which it would wish to bring to the Select Committee's attention. The Professor's recommendations flow logically from his selection of "Option 3—Separate Care"—as the preferred option in his Option Appraisal set out in Chapter 5 of his Report. "Option 3—Separate Care"—would have been Bupa's second choice.

  14.  Bupa's first choice would have been "Option 2—Voucher Scheme". Only this option (amongst those identified) creates a situation where the role of additional financing would have become wholly "supplementary", according to the terms of the OECD taxonomy of health insurance[72]—which Bupa commends for policy making purposes. Only Option 2 would wholly change the role of additional financing in the UK (excluding NHS co-payments or associated "complementary insurance") from "duplicative" to the NHS to "supplementary" to the NHS. In lay terms, only Option 2 is a true and full "top up" option—in which patients pay only the marginal cost of the marginal benefit received from "topping up" their NHS entitlements.

  15.  The potential impact of such a change in role was illustrated in Bupa's submission to the Richards' Review (page 16ff) by reference to Israel and The Netherlands. The Select Committee may wish to consider whether such a change in the role of additional financing is now (or may at a future date be) desirable and/or necessary in England.

  16.  Bupa also wish to draw to the Select Committees attention their analysis of the draft EU Directive on Cross Border Healthcare, published on 2 July 2008.[73] Bupa believe that if the draft Directive completes to EU co-decision process as published it will, in simple terms, lead to a situation where NHS patients will be able to travel abroad for treatment and be reimbursed up to a maxima of the nearest equivalent NHS treatment. In that case, if patients travel abroad, they will, in effect, have the freedom to "top up" found in "Option 2—Voucher Scheme". This may lead to a challenge through the European Court of Justice from an English patient who paid the greater expense of receiving additional care in England under Option 3.

  17.  In Bupa's view "Option 1—Either NHS or Private Care" would have been high undesirable. Professor Richards' Report (paragraph 4.16) describes a "strong consensus from stakeholders that withdrawing NHS care was wrong". He further amplifies "words used by patients and the public to describe this approach include "despicable" ... "cruel" ... "perverse" and "unjust".

  18.  In Bupa's view "Option 5—NHS tops ups" would have lead to the further conflation between the distinct roles of the NHS as a "universal and comprehensive" primary health services financing vehicle (its dominant statutory role) and its subordinate and partial role as the publicly owned provider of health services, primarily to the NHS. A clear inference can be drawn from the reported consultations in the Richards' Review Report that the views and interests of citizens and patients are not always identical to those of "NHS staff".

  19.  In Bupa's view "Option 4—Simultaneous care" would have been an acceptable option whether in an NHS or independent sector provider context. Indeed this situation already pertains re NHS funded social care, NHS amenity beds and any NHS hospitals that still have "private bed allocations" as opposed to separate "Private Patient Units".

December 2008






69   http://www.bupa.co.uk/about/html/pr/health_finance_project.html Back

70   http://ec.europa.eu/health/ph_overview/co_operation/healthcare/cross-border_healthcare_en.htm Back

71   http://www.bupa.co.uk/about/html/pr/health_finance_project.html Back

72   http://www.oecd.org/dataoecd/24/52/31916207.pdf Back

73   http://ec.europa.eu/health/ph_overview/co_operation/healthcare/cross-border_healthcare_en.htm Back


 
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