1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health (the Department) and NHS Improvement.
2.The NHS provides immediately necessary and urgent treatment to any patient who needs it. Some treatments, including GP appointments and accident and emergency care, are free to all patients and some patients, such as refugees and those applying for asylum, are exempt from charges. However, patients who are not ‘ordinarily resident’, such as people visiting from abroad, former residents who live overseas and short-term migrants, may have to pay for the hospital treatment they receive. NHS trusts and NHS foundation trusts have a statutory responsibility, in accordance with the relevant regulations, to make and recover charges in respect of treatment for overseas visitors who are not entitled to free healthcare.
3.The charging rules are complex. Broadly, there are three systems for different visitor groups. Trusts should charge visitors from outside the European Economic Area and Switzerland (EEA&S) directly. For people resident in EEA&S countries, with the exception of state pensioners, trusts should report details to the Department of Work & Pensions, so that the UK can recoup costs from other member states. In April 2015, new legislation extended charging to a third group of visitors (students and temporary migrants from outside the EEA&S) who now have to pay an immigration health surcharge as part of their visa application. The Department told us that the complexity of the system, which had built up over a considerable time, was one of the big challenges for trusts.
4.The statutory obligation for the NHS to make and recover charges for treating overseas visitors was first implemented by regulations made in 1982, under powers introduced by legislation in 1977. The Department told us that in the following three decades very little happened to put this statutory obligation into effect, but it could not explain why there had been so little focus on the issue for so long.
5.Research for the Department in 2013 suggested that in 2012–13 the NHS charged an estimated 65% of the amounts it could have charged to overseas visitors from outside the EEA&S, and only 16% of what it could have charged for visitors from the EEA&S. The NHS charged £89 million in total, compared with an estimated £367 million that it could have charged. Of this, an estimated £73 million was recovered as cash. The research also estimated that the total cost to the NHS of treating people who were not ordinarily resident in this country was around £2 billion a year but, because of exemptions, under the regulations not all of this amount was recoverable.
6.In July 2014, the Department launched an overseas visitor and migrant cost recovery programme with the aim of increasing the amount recovered to £500 million a year by 2017–18, by extending the scope of charging and implementing the existing regulations more effectively. Increasing income from overseas visitors is one of several measures intended to reduce the financial deficit of trusts, which reached £2.45 billion in 2015–16. The Department explained that the £500 million target should not be regarded as overly scientific, and was a top-down calculation based on assumptions about the number of visitors and the amounts charged. This was the best estimate, as the Department did not have bottom-up data about the gap between what was charged and what should have been charged. The Department emphasised, however, the underlying principle that the NHS should charge the right amount, which might be higher or lower than £500 million a year. It viewed £500 million as a stretch target to create a culture within the NHS where people did charge the right amount.
7.The Department told us that more progress had been made in the last three years than in the previous 30 years, in terms of both improving knowledge and recovering cash. Charging increased from £97 million in 2013–14 to £289 million in 2015–16. We note, however, that most of this increase was due to changes in the charging rules. In particular, the new immigration health surcharge generated £164 million from students and temporary migrants in 2015–16. Most temporary migrants from outside the EEA&S pay a surcharge of £200 a year, and students and applicants under the youth mobility scheme pay £150 a year. The Department said that the surcharge is a simple, flat-rate charge that was intended to be simple to administer.
8.The Department noted that, in setting the level of the surcharge, government had sought to strike a balance between what was fair to the overseas visitors concerned and what was fair to the UK taxpayer, and that some of the people who came to this country to work would also pay taxes. It could not confirm how far the immigration health surcharge covered the full cost of the healthcare provided to students and temporary migrants from outside the EEA&S. The research for the Department in 2013 suggested that the average cost of the treatment accessed by this group of people was £736 per person per year. Not all visitors who pay the surcharge access NHS services, but only very limited data are available to show the services that have been used in practice and how much they cost. The Department told us that it was working with NHS Digital to make improvements to address this information gap where it was financially proportionate to do so.
9.The Department accepted there was still a lot more to do to apply the existing regulations effectively. It forecasts that, were it to take no further action between now and the target date, charging would reach £346 million by 2017–18, short of its ambition to recover up to £500 million. It referred us to plans it had for policy and regulatory changes, work to identify and share good practice, and improvements to IT systems, and also said that it would be responding shortly to the consultation on extending the charging regime to other NHS services, such as accident and emergency and some primary care. The Department thought these steps would close the gap between its forecast and its ambition, but could not quantify the likely effect of the different measures. It told us that it would continue with the process of trying things and seeing if they worked and, if they did, going further with them and, if not, trying other things..
10.The result of the EU referendum creates further uncertainty for the health system. The Department could not explain what impact Brexit might have on the charging regime. We challenged the Department on whether it was worth investing in systems to increase EEA&S charging when the EEA&S health schemes might not apply to the UK in two years’ time. The Department told us that the system changes it was planning were designed to improve identification of overseas visitors, and that it believed they would help the NHS regardless of the outcome of Brexit negotiations.
11.The biggest shortfall in amounts charged, compared with the ambitions for amounts recovered set out in the Department’s implementation plan, relates to charges for EEA&S visitors. Most of these visitors are covered by schemes such as the European Health Insurance Card (EHIC) and their country of residence pays for their treatment. The Department now forecasts that the NHS will charge £72 million in 2017–18, having aimed for £200 million. The Department explained that this issue was purely one of identifying chargeable patients, as distinct from recovering debts. The NHS needed to identify more EEA&S patients and record their EHIC number, and government could then go about reclaiming. The Department said that, in contrast to systems in countries where everyone is charged, the NHS is not set up to check identity and charge people.
12.It is striking that the UK paid £674 million to other EEA&S member states in 2014–15, but recovered only £50 million. The Department said that much of the difference related to the cost of treating state pensioners. Because of the way the system works, the UK pays for healthcare for UK state pensioners regardless of where in the EEA&S they live. In 2015–16, the UK paid other EEA&S states £565 million, of which £429 million was for the healthcare of UK pensioners abroad. Income for treating EEA&S pensioners in the UK was £13 million in 2015–16, out of total income of £56 million from other EEA&S member states. The Department told us that the UK paid for 190,000 UK state pensioners living abroad, mainly in Spain, France and Ireland, but there were only 5,500 state pensioners from the EEA&S living in the UK. However, it could not explain the difference for other countries—for example in 2014–15, Poland claimed £4.3 million from the UK, and the UK claimed £1.5 million from Poland. The Department agreed that the UK is not collecting as much from other EEA&S states as it should. Stripping out money relating to state pensioners, the Department said that this country paid out about £130 million and got back around £40 million, and that it would expect these two numbers to be more balanced.
13.NHS Improvement explained that it is extremely difficult, in busy clinical areas, to identify chargeable patients. There is no single document or piece of information, such as a passport or NHS number, that confirms whether a person should be charged for NHS treatment. This is because, unlike in other countries, a person’s chargeable status is determined primarily by residency and can change over time. The Department highlighted that, working with the Home Office, it had tightened the residency criteria such that people from outside the EEA&S had to have indefinite leave to remain in the UK in order to be classified as ‘ordinarily resident’ and automatically entitled to free care.
14.The NHS does not routinely ask people to prove their identity. The Department has been working with NHS Digital to make changes to IT systems, including the summary care record application, to help trusts identify whether a patient is likely to be chargeable or entitled to free NHS care. It also told us that some trusts, such as Peterborough, were now asking patients for two forms of identification, including one form of photo ID, although it recognised that asking all patients to prove identity was a controversial thing to do. St George’s Hospital in London was piloting asking women to bring a passport and proof of address to check their eligibility to free maternity care. The Department said that these initiatives had not yet been evaluated. NHS Improvement told us that it needed to identify best practice and then make that best practice available to all.
15.There may, however, be some UK residents who, because of their personal circumstances, cannot provide the documents they might be asked for. We heard evidence, including from Doctors of the World, raising concerns about the impact of charges on vulnerable groups, the cost and burden of implementation, and the consequences for public health. NHS Improvement assured us that it was working with cohorts of organisations to determine good process that was proportionate, minimised burden and appropriately discharged organisational responsibility to identify and recover appropriate costs.
1 C&AG’s Report, Recovering the cost of NHS treatment for overseas visitors, Session 2016–17, HC 728, 28 October 2016
2 ; , para 1
3 , paras 1.2, 1.3 and Figure 2
5 ; , para 1.4 and Figure 3
8 , paras 1.9, 1.12,and Figure 4
10 , paras 8 and 1.12
11 , para 1.17
15 , paras 1.15 and 2.2
17 ; Department of Health paras 3 and 4, Annex A; Professor Meirion Thomas
19 ; , para 1.16
23 , paras 3, 1.16 and Figure 5
25 , para 2.15
32 , para 3.5
35 , para 16
39 ; Doctors of the World UK , paras 2 and 3
30 January 2017