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Funding the National Health Service: the Continuing Search for Alternatives

ABSTRACT The article emphasises the urgent need for a reconsideration of potential sources of income for the National Health Service which could supplement rather than replace those from general taxation. They include local taxation, earmarked taxes, patient charges (hotel, prescription and other charges for non-clinical items), a lottery, income generation, charitable donations and patient ‘opting out’ of the NHS with private insurance. Analysis is set within the position statement provided by the 1989 White Paper Working for Patients and within a more general analytical framework paying attention to equity, accountability, value for money, management incentives and other criteria. Each funding method is considered in terms of its consistency with the criteria of both the analytical framework and the White Paper. The differences between some of the alternative sources are found to be more apparent than real. Rather than providing a panacea for the perceived funding and rationing problems of the NHS, the danger is that new supplementary sources of finance may simply replace one set of problems with another. The new set may pose even more intractable problems and involve considerable short to medium term disruption of NHS finances. The inescapable fact is that decisions about the levels and quality of public service provision and their financing are ultimately matters of democratic accountability, decisions which cannot and should not be sidestepped by the convenience of income sources.