The NHS inside the European Union is unique but not special

Wednesday, May 25, 2016
Dr. Jon Stanley


A nationwide health service that identifies undeserving freeloaders away from the point of delivery and charges them fairly can only exist outside the European Union

The compulsory privatisation which continues can only be arrested by rejecting EU directives on procurement and provision through Brexit.  These directives have been passed through the principle of universal application and it is clear that, given the unique nature of the NHS, no willingness to give it special treatment has been afforded.  EU directives are designed to promote competition and drive service quality for healthcare systems based on social insurance, not general taxation.

In 1942, the liberal Beveridge drafted a report into funding general healthcare directly through taxation.  This was considerably different to continental systems dating back to schemes introduced by Bismarck where social insurance was made compulsory.

The fundamental difference between the NHS (Beveridge) system and most EU countries is that the NHS is paid for through taxation yet does not identify entitlement to treatment at the point of delivery, rather it assumes it.  Schengen member citizens are required to have ID cards while UK customers are not.

The other Common Travel Area EU member, Ireland, assumes one must pay charges for emergency services unless one has a pre-approved exemption.  This explains why (unfunded) access to emergency services by EU nationals is less contentious in Ireland than in the UK. We don’t charge and we don’t check ID either.

Beveridge held the promise of reducing transaction costs through a single payer system. There is no marketing, no profit motive and a floor on acceptable standards of care that can be set by democracy instead of markets. All insurers limit the treatments they offer and Beveridge classically rationed by waiting times. Promises to wait no more than two weeks for an appointment can be interpreted as setting the price of an appointment at two weeks of waiting. 

All else equal, the time-value of money means people are prepared to wait longer the cheaper a product is, up to a maximum wait for a product that is free at the point of delivery. The time-value of money varies with free time and disposable income. Although as the population ages, especially in terms of retirees, waiting remains preferable to paying in the NHS.

Beveridge’s concept is better than Bismarck’s when:

1.     The state purchaser of services can distinguish between those who can pay from those who can’t.

2.     This power to discriminate must be at the legal boundary of power of the purchaser, the state’s own borders

3.     The undeserving freeloader can be excluded without charging by controlling that border

4.     Service providers are confident payment is unavoidable.

This can seem very dry but it means that the NHS, based on taxation, works best when we control our borders and when people who do arrive from abroad have to pay at the border to access the NHS.  This gives the confidence needed for providers to deliver free services at the point of delivery and be compensated by the taxpayer.  Likewise, it gives confidence to the voter that the undeserving freeloader can be confidently identified by the tax authorities and so there is no need to prove entitlement to care via an ID card.

For Beveridge’s system to continue inside the EU, the government will increasingly have to accept the undeserving freeloader from abroad or introduce a way of identifying them at the point of care through ID checks and/or charging.  It can be seen that the very concept of checking for entitlement is more consistent with Bismarck-type healthcare and makes the NHS more vulnerable to being identified as a business, not a service.  This has huge implications for EU directives mandating competition in businesses as we have seen through the privatisation of Royal Mail and competition-driven rail sector.

Inside the EU, the public will have to accept the undeserving freeloader as part of our health service and the effect on national solidarity this will have.  The alternative will be to introduce a NHS ID card for everyone to prove their entitlement to care and the UK has repeatedly rejected compulsory ID.

Increasing rates of migration, the impact of the cross-border health directive and the need for the UK to issue EHIC to any EEA resident of the UK pushes the public into a space between the two incompatible health care systems and solutions to remedy this through point of care ID could lead to the breakup of the NHS inside the EU.

Inside the EEA, but outside the EU, the UK will be in a position to construct a common purse agreement with other members to fund migrant health care.

Dr. Jon Stanley is a member of the Royal College of Surgeons and graduate of Sheffield University