Charging people upfront fees for healthcare is an ideological “zombie idea” that leads to higher costs and worse health outcomes yet is repeatedly brought back to life, the long-serving former head of England’s National Health Service says.
David Nicholson, who served as chief executive of the English health system between 2006 and 2013, under both Labour and Conservative governments, said there was clear evidence that charging copayments for GP visits is an ineffective measure for reducing health costs.
The federal government is currently consulting on ways to reduce the number of people receiving bulk-billed treatment from GPs with no upfront costs, after two earlier attempts proved politically unpopular. Health Minister Sussan Ley told Fairfax Media “doing nothing was not an option”, as the number of Medicare services provided in Australia had increased by 57 per cent since 2003.
But Sir David said while the idea that upfront fees reduced costs was attractive to some politicians, it was driven by ideology not evidence.
“It really is a zombie idea – it comes up every so often and it gets killed by the evidence, because the evidence is overwhelming,” he said. “It doesn’t work, and it won’t work in Australia.”
Sir David is the lead author of a new report examining how countries can best develop universal health care systems, which he presented at the World Innovation Summit for Health in Doha, Qatar, this week.
He said charging copayments inappropriately diverted health resources towards more well-off people who were prepared to spend increasing amounts, leaving fewer resources such as trained staff to work with the people who needed them most.
“It will increase spending and it will increase the utilisation [by] people who have money,” he said.
His report found that the more simple a funding system was, generally, the less it costs, so adding new funding sources such as copayments would both fragment care and potentially increase costs.
“I take my leadership from the World Bank, and the World Bank have very recently moved their position on copayments and user fees over the last few years,” he said.
“The current World Bank president has described health care user fees as ‘unjust and unnecessary’,” his report said, after previously insisting developing countries implement them.
Sir Nicholson oversaw savings of more than $18 billion made in the National Health System after the 2008 global financial crisis, and said health services needed to recognise that finding savings did not necessarily mean delivering inferior care.
England had forced local health districts to find savings, froze wages, and tried to shift the focus and funding towards preventing people from ending up in hospital in the first place, something he said had proved the most difficult task.
Health Minister Sussan Ley said there was “no disputing” the need to protect bulk-billing for concession card holders, but the increase in payments for Medicare services and growing population were reasons the copayment was needed.
“The issue for our nation is that now every four in five visits to the doctor by Australians are being bulk billed to taxpayers, even though a number of these patients can afford to make a contribution to the cost of their own care and treatment,” she said.
However, London School of Economics professor Julian Le Grand said he believed the debate in developed countries about whether or not health costs were sustainable was “a lot of nonsense”.
According to the Australian Institute of Health and Welfare, government funding for health costs fell in real terms in Australia in 2012-13, with the biggest increases in private sector funding.
He said while the population was aging, the vast majority of expenditure occurred in the last six months of a person’s life.
“The aging of the population simply pushes that expenditure further along, it doesn’t necessarily increase it,” he said. “Most people think a lot of that expenditure is wasted, and does not extend life or increase dignity”.