25 July 2022
Radix has proposed a new hypothecated tax to increase NHS funding and which will build a fair system of financial contribution. These proposals are among the recommendations in Patient Value, Incentives and Funding, the fourth in the series of books published by Radix and written by Prof Stephen Smith, former chair of East Kent NHS Hospital Trust, which examine the radical reform needed to fit the NHS for the 21st Century. Radix recommends five measures which, if implemented, would bring the health and care system up to parity with other leading European countries. The first of these measures is a hypothecated tax, which involves creating a specific tax for the purpose of funding both health and social care. The rationale is that it is appropriate for a hypothecated tax because it is a “public good” and that “individuals cannot be excluded from use”. The second measure is to introduce charges for abuse of the NHS system (for example, repeatedly missing appointments or assaults on staff). The report reveals that £216m is wasted annually due to missed GP appointments. The remaining measures are topping up fees for ‘extra’ hospital services (with cross-subsidising for those with less money), commercialising tax funded innovations and encouraging the use of private healthcare schemes through tax incentives. The Radix report describes the benefits of hypothecated tax systems that have been shown in other countries, such as Australia, with Prof Stephen Smith explaining that “[The Australian Medicare] social insurance system is a definite strength and one from which Britain can learn”.