Paying for Healthcare on the “Never, Never” in the UK – how has it come to this?

At the heart of the social contract underpinning the NHS is that healthcare in the UK should be provided on the basis of need rather than ability to pay.

In his essay which set out the moral vision for the NHS In Place of Fear Nye Bevan argued that households should never again have to worry about getting into financial difficulties to pay for their healthcare. 

But this was not just a moral argument – it was an economic one – remove the fear of paying for healthcare, make it readily available and this would lead to increased worker participation – particularly for women – and greater productivity across the economy.

Each and every political party’s manifesto since the creation of the NHS in 1948 has stated an ongoing commitment to comprehensive healthcare free at the point of need.  However, surreptitiously and often undetected, governments of all colours have narrowed the scope of what healthcare patients can get for free on the NHS.

As a result, the costs of paying for care have steadily been passed back to individuals and their families rather than being covered collectively by all taxpayers.

The trajectory towards people paying for healthcare famously began in 1951 with the introduction of charges for prescriptions, glasses and dental care for those on lower incomes, an issue which led Bevan to resign from the government.

But since then, it is difficult to recall any landmark legislation which was subject to wider public debate which explicitly put the cost of paying for healthcare back onto individuals.

Yet this is exactly what has happened.  Take for example care for older people..  There are currently 137,480 people in care homes in England who are paying for some or all of their costs of care often paying around £1000 a week which is 40% more than state funded residents, including for some parts of their healthcare which 30 years ago would have been provided free of charge by the NHS. 

Remember the infamous law which mandated that people should have to sell their homes to pay for this type of care?  Well, it was never passed.  Instead, incrementally and over a period of two decades, a discretionary charging regime introduced by local authorities became national policy.

Because of cuts to their budgets, local government began using a set of threshold criteria which restricted access to free care according to if they were deemed to be sick enough.  So, for example, 30 years ago 28% of people paid something towards the costs of being in a care home, whereas now over half of care home incomes come from people paying privately. 

The same barely noticed trends have happened for people receiving care in their own homes.  In 1992 one-third of councils charged nothing to people receiving domiciliary care, irrespective of their income – now all local authorities in England operate a means tested charging regime.

We have seen the same shift occur in the dental sector where it is now the case that 55% of the dental sector’s £8.3 billion annual income, comes from people paying privately, with people in many parts of England unable to access means-tested NHS dentistry.

Remember the parliamentary rebellions which occurred when Ministers proposed new laws restricting access to NHS dentistry or the election debates which saw party leaders arguing about whether the state needed to restrict its offer of subsidised NHS dental care? 

Again, it didn’t happen.  Instead, funding for NHS dentistry fell in real terms by 8% between 2011 and 2022 whilst technical changes to the contract between the NHS and dental practices meant that there was a perverse incentive for dentists not treat to NHS patients.  And so once again the costs of paying for dental care has moved increasingly away from the state and back to the individual, although without any public debate.

Since the pandemic, the creeping trend of pushing the costs of healthcare back to individuals has expanded into other areas. 

Remember the debate during the Tory leadership election where Rishi Sunak stood on a platform of encouraging people to pay out of their own pocket to pay for the hip operations and knee surgery they couldn’t access on the NHS? 

Again, it didn’t happen, but since 2019 an additional 73,000 people have had to pay from their household budgets to access healthcare.

And for those patients, in severe pain, who are unable to access NHS care due to long waiting lists and who don’t have the ready cash to pay in one go, private healthcare companies are actively promoting Buy Now Pay later loans as a way of making private care available to them.

The private companies benefitting from the managed decline of the NHS see the availability of debt funded healthcare as having a positive impact on the growth of self-pay, and is likely to be amongst the reasons why their private pay revenues have soared, more than doubling since 2016 to £1.4 billion last year 

It’s also a form of payment for private healthcare which the private hospitals like. Unlike funding which comes from insurance companies which have a financial interest in haggling with private hospitals to keep costs down, or which will only pay for the healthcare, which is covered under the patient’s policy, the only impediment to paying for private care on the ‘never-never’ is to have the necessary credit rating. 

And it is the finance company rather than the hospital which picks up the cost of chasing down – if necessary using bailiffs – those patients who miss out on their repayments or their late payment fees, a little known, but frightening aspect of Buy Now Pay Later schemes.

To avoid the worry of having to use savings to pay for healthcare or going into debt many people are taking out private health insurance, with two of the biggest insurers Axa and Aviva reporting that demand for their products has surged since the pandemic.

However, taking out private health insurance won’t insulate individuals from the pernicious impact of paying for their own healthcare.  Whilst it may cover the cost of an initial consultation or a one off procedure, like any form of insurance premiums soon start rocketing as individuals become more “risky” (read: older and unhealthier) and start claiming for more complex care more frequently.  

For example, in 2022 a patient who had been paying £7000 a year into a comprehensive health insurance policy in 2016 saw their annual insurance renewal fee rise to £164,000 after receiving cancer treatment under the scheme.

To have to sell a house to pay for health care – as happens frequently for those having to pay for their social care costs – or to take out household debt or high cost health insurance to pay for a hip operation is unfair.

It is unfair on those who are being forced to pay, but also those on low incomes unable to pay and who are required to wait, often in pain, for care on the NHS. 

Remember when a politician proposed to the nation the creation of a scheme in which the costs and risks associated with healthcare would be managed across the population collectively through taxation so that no household would get into debt to pay for their healthcare ever again? 

Well, this did happen.  75 years since the NHS Act was introduced we need all politicians to reaffirm their commitment to its founding principles, not just in words, but in deeds, and to stop the insidious growth of individuals once again taking on debt to pay for their healthcare.

About the author

David Rowland

David Rowland is CHPI's Director. He joined the organisation in 2019 after over a decade of working in senior policy positions within the healthcare regulatory sector. For David's full bio see our People pageSee all posts by David Rowland