Multi-tiered health

Tweet I'm not convinced that it's entirely fair to use Dan Hannan's words as evidence of some sort of secret agenda by Cameron to destroy the NHS, although some seem to have been trying to make that leap. I do believe that it is entirely fair to point out, however, that Hannan is far from being alone in his views, and that there are a number of people in the Tory Party who really do want to dismantle the NHS. And I suspect that their views are rather more widespread in that party than the official line would suggest.

What remains unclear is how much influence that line of thinking has within the party – and to what extent that would be strengthened by an influx of new Tory MPs if they win a number of additional seats at the next election. Will Cameron be able to make his own views on the NHS stick?

More worryingly, Hannan's outburst has led to a number of people who ought to be natural defenders of the NHS to start considering the idea of replacing a tax-funded service with an NHS funded through compulsory health insurance. I think they are wrong, for a number of reasons.

In the first place, a service funded by insurance payments would be a fundamentally different kind of service. It is a complete shift away from a service 'free at the point of use', since it would mean that each and every use of the service was accompanied by an invoice. The invoices would be sent direct to the insurance companies rather than paid by the individuals, which means that it might not look that different from the point of view of the patient, but it would represent a completely different approach to running and administering the service. It doesn't necessarily mean a full-scale privatisation of the NHS, but that would be the likeliest outcome for an organisation delivering services for which it then charges.

Secondly, funding the service through insurance premiums would not, of itself, bring one extra penny into the funding of the service. The only way of increasing the funding by such a move is if the total payments made in insurance premiums exceed the amount paid from general taxation revenue at present. And of course, they'd need to exceed that sum by at least the amount of profit to be creamed off by the insurance companies, just to stand still.

What it would do, of course, is to change the basis of payment from a tax system which has an element of progressiveness about it (the amount paid depends at least in part on ability to pay) to a system which takes no account of ability to pay, except in the minority of cases where a basic safety net provision is put in place.

The third reason is that, even with a state-guaranteed minimum level of provision for the most needy, different people would have different levels of cover bought from different insurance companies. We would have at least a two-tier – and probably a multi-tiered – system of provision of health care, based not on health need, but on the level of premium paid.

In effect, the most well-off would pay less for a better standard of health care than they get currently; whilst the less well off would pay more for a lower standard. The Hannans of the Tory party know this – and also know who their target audience is.