Friday, August 1, 2008

Rectifying Health Care Costs - No More NHS

I have mentioned that, over time, I would post some ideas on how to make structural reforms to the UK. I have already covered education, and the next big area of government expenditure I want to cover is that of healthcare. The solution I have outlined is radical, which may not surprise regular readers of this blog (who seem to be rapidly increasing in numbers).

The National Health Service in the UK has taken on the status of being untouchable. As such, I write this in the knowledge that such a system as I am proposing will only be considered in extremis. However, extremis is what the UK is now potentially facing, so I will detail a new system on the basis of putting the idea 'out there' in the hope that it might provide inspiration, or at least help people consider that there are other ways of running a health service.

Like any system, the one that I am proposing only makes sense as a complete entity, so I would ask that you stay with the idea to the end. Do not rush to judgement at the early stages, as the system is not what it seems at first. As for my post on education reform, the system offers a market based solution, and aims to remove as much government control from healthcare as possible.

I will not detail the many criticisms of the healthcare system here, except to say that the arguments normally revolve around the bureaucratic nature of the system, cost, efficiency and quality of care. A particular criticism of the moment is the use of top-down targets, which distort priorities and outcomes. My aim is that my proposed system will address all of these issues.

I will start with a shocking statement. The system I am proposing will cost people money for their treatments. However, before recoiling in shock, you should be aware that nobody will be denied treatment.

To best explain the system, I will start with an individual who thinks that they might be ill. We will call the patient Fred. Up until today, Fred has been very healthy, and has therefore never utilised the health system, so he has not even registered with GP (doctor). Unfortunately, Fred has not been feeling well.

His first task is to therefore find a doctor. He goes online and searches for a doctor and finds a directory of all the doctors in his area. The directory lists the details for the doctors along with ratings for each of the doctors. There are two kinds of ratings; rating from patients, and ratings from consultants, both of which are shown as stars. The search also includes the hourly rate that the doctors charge, and whether the doctor is taking on new patients. Fred is a middle income manager, so he chooses a doctor with middle level hourly rates, and a good rating from his patients and consultants. He telephones the doctor's surgery and makes an appointment. In order to confirm his appointment he needs to present his government health card to the surgery, and enter a PIN to confirm his registration.

Having popped into the surgery with his health card, he is now registered with the doctor. A couple of days later he has an appointment with his doctor. The time that he enters the doctor's office is taken through his swiping his health card, and entering his personal PIN. He sits down with his doctor. The doctor conducts an examination of Fred, and concludes that he does have a problem. He is concerned, but not overly concerned. He thinks the best option for treatment is a course of drugs but, if that does not work, he will require some minor surgery.

The doctor prescribes the drugs, and Fred enters his PIN before the doctor can issue the prescription. The doctor updates the notes on the computer in front of him. At the end of the consultation, Fred swipes his card, and enters his PIN again. His time spent with the doctor is recorded. He is then taken to a room, where he is left alone with a computer. The computer asks him to rate the service that the doctor has provided.

At this point, you may be puzzled. What is going on here, and how is this different from private medical care? The difference is explained below.

When Fred chose his Doctor, he selected the doctor in part on the hourly rate that he charged. When Fred registered with the doctor, he accepted the hourly rate as part of the registration. This acceptance was recorded, and he then opened a government health account. In doing so he was making a commitment that up to a maximum of 5% of his income would be deducted each month to pay off his medical bills (achieved through the taxation system). The cost of the visit to the doctor was entered into this account, one of several health accounts. The following month, up to 5% of his income will be taken to pay for the visit. Each subsequent month the same will happen until the account is paid down. Also included in this account is the cost of medicine and diagnostic tests. As such, in this case, Fred will also have the cost of the medicine added to this account. We will call this account, Basic Medicine.

A week later, Fred is feeling no better, so arranges to return to the doctor. As before the same procedure is undertaken with the swipe and the recording, and the cost will be added to the Basic Medicine account. However, this time the doctor knows that he must use a consultant to further examine Fred. He ends the consultation, and Fred is sent to the surgery administration. The doctor has informed the administration of the surgery what kind of consultant is needed, and the administration makes a search on an online market for consultants. They enter Fred's postcode, and the search produces results for the nearest 20 consultants to Fred. Each consultant has two ratings, a doctor's rating and a patient rating, along with an hourly charge and earliest available appointment. The administrator asks Fred to select the consultant that he would like to use. The administrator makes a small flat fee charge for helping Fred use the system.

Fred decides that a consultant near to home is his priority, and selects a consultant with the best rating, at a roughly middle cost, that is near to him. He enters his PIN, and the contract with the consultant goes through, and the administrator helps Fred book an appointment At this point the administrator forwards the patient record to the selected consultant electronically. There is no centralised IT system for patient records, but all records must be available in a proscribed format (for technical people, an XML schema). As before, the costs of the visit are transferred to Fred's Basic Medicine account and Fred is asked to make a rating on the service of the doctor.

A few days later, Fred goes to see the consultant. Fred swipes his card at the start of the consultation, and enters his PIN. The consultant examines Fred and decides that Fred needs some minor surgery. At the end of the session, he writes up the results of the examination, tests and so forth, and forwards these electronically to Fred's doctor. In addition, he rates the decision of the Doctor to send Fred to see him. In this case, it was a necessary visit, so he rates the doctor highly. In addition, Fred is asked to enter his rating of the consultant in a private space for this purpose.

Once the doctor has seen the record from the consultant another appointment with Fred is made. At this stage, the doctor needs to help Fred to arrange the hospital that will be used for the surgery, and the doctor must be involved in this decision. However, before the appointment, the details of the required surgery, and the patients notes will be sent to the nearest 5 hospitals (or providers of the necessary surgery) to Fred's postcode. Fred's name and location will not be provided at this stage, such that local hospitals are unaware that Fred lives near to them. Each will be requested to give a quotation on the surgery. Included in the quote will be the total cost, the earliest date available, the surgeon available and so forth.

The quotation will be based upon the cost of the procedure itself, the cost of a hospital bed per night. In addition a quote will be given for managing likely complications, and the cost of additional days residency in the hospital. These will be calculated into the costs and will be weighted in the calculation according to likelihood. i.e. if a particular complication is very rare, then the cost of treatment will only be added in as a tiny fraction of the total quoted cost. This is one of the few areas of complexity within the system, and would require monitoring of statistics for the outcome and complications for different kinds of treatments. The aim will be to offer a final quote that includes loading for extended stays, and additional treatments, calculated as a final single figure. However, the actual bill will provided to the government will be based upon the full cost of what actually was undertaken, in accordance with the quote.

In addition to the 5 nearest hospitals Fred's doctor will also have the option of requesting a quote from two other hospitals. If the doctor believes that good treatment for the condition can only be obtained out of the area, then this will allow him to find other options. In addition, the doctor will be allowed to exclude up to one hospital if the doctor believes that their standards are poor. When excluding a hospital, the doctor will be required to give a reason why, so that the provider is made aware of their poor reputation.

The doctor can then select from the three providers of the lowest cost quotations, provided that there is no more than 10% differential between the costs of the cheapest and most expensive. If the differential is greater, then the system will automatically broaden the geographic spread, widening it until such time as 3 quotes are available within the the 10% range (the doctor will not need to actively do this, as the doctor should only finally see the results when 3 quotations meet the criterion). At the end of the process, Fred should be presented with three choices based upon geographic search, and up to two choices of hospitals selected by his doctor.

At this point, Fred has a real choice. Each hospital will have an availability date, and he will also be able to see a rating for the hospital for the procedure made by doctors, a rating made by patients, and the final cost of the procedure. Fred then needs to make a choice of hospital for the procedure. Fred can then select the hospital that best reflects his needs. He will be made aware that 25% of the cost of the procedure, and 100% of the costs of the hospital bed, will be allocated to his government health account. This will be allocated to the Major Procedure account, that will allow for up to 3% of his income to be taken each month to repay the cost of treatment.

We will jump forward in time, and Fred has been treated and (happily) with a successful outcome. Fred will then be asked to rate the treatment and hospital, as will his doctor. The costs of the entire process will all be deposited in his government health account, and over the coming months he will find that he is paying 8% of his total income into repaying the healthcare costs.

So what is the advantages of the system. The first advantage is that the system encourages everyone to consider a combination of quality of care and cost of care. It allows the users a wide choice of care according to their own priorities and needs. Furthermore, whether employed or unemployed, there is 100% availability of healthcare, and few would argue that a burden of a few percent of income for healthcare would be unreasonable, even taken from unemployment benefits or a pension.

However, within this scenario, there are several elements that are still missing. The first of these is Accident and Emergency treatment. This is a situation in which a patient does not have a choice. In this case, the only solution is direct government funding, and fixed fees for the system. In this case up to 2% of income would be used to repay treatment and a fixed fee will be applied for any entry into the A&E system. This will require a third account, the A&E account, making the total that can be taken from a person's income 10%. Due to the nature of the system, the government will need to directly contract with hospitals to provide A&E services.

Who would provide for the hospitals, or how will they operate?

The hospitals can be provided by any means. They could operate as charitable trusts, or as private concerns, or any format that can be imagined. Because of the system of choice, and doctors and patient ratings, only hospitals that provide good quality care cost effectively will survive. For example, if a hospital is providing poor care, then the doctor will reject it from the list of hospitals provided to the patient. If the standards of care given by nurses are poor, or if the hospital is not clean, providing poor quality food, then patients will give it a poor rating, reducing demand for its services.

What check on costs will there be?

One government check on costs will be to have a system close to that of NICE (National Institute for Health and Clinical Excellence). They will have a role of determining what might be funded within the system.

What of children?

The accounts of children will be allocated to their parents and, where the parents are not together the costs will be evenly split between the two parents.

What of preventative medicine?

Each individual within the system will be allowed one free health check per year without cost. Certain preventative checks, determined by NICE, will be offered free of charge to encourage uptake.

What of Medicines?

One of the few benefits of the current system is that the massive purchasing power of the NHS allows for cheap purchase of medicine through central control. As such, central purchasing will be retained in this area - the only centralised control in the system.

Won't this hurt the poor?

One of the benefits of this system is that a maximum of 10% if income will be taken from any individual. Even if the individual is on benefits, this is a very small price to pay. Furthermore, because of the system being capped at a percentage of income, the more wealthy the person, the more likely they are to pay for the treatment they have benefited from. If a person is on low income, and they undergo a major procedure, it may be that they never pay down their account. On the other hand, a high earner will be more likely to pay down their account. In this way, everyone makes a contribution, but it is likely that high earners will, on balance, pay more on average.

What is the role of government?

Government is subsidising healthcare, and collecting the remaining fees.

Should government have any role?

If we were to take a purely libertarian stance, no. However, health care is perhaps the one area where even libertarians might be nervous of a completely free market. Few want to see people lacking treatment, and dying for lack of healthcare.

What of dentistry?

The same system applies, and an additional 2% of income can be used to pay for the costs. However, each dentist can not undertake the work they suggest, but will play a role similar to that of the doctor in selecting treatment. As such, each individual will have a dentist for prescribing treatment, and will use another dentist for enactment of treatment. The system will therefore be the same as the system for selecting hospitals.

What of the rating systems?

One of the keys to a successful market is information and choice. The purpose behind the rating system is information. This is one area that would be under central control, as all users of the system need to have an input into one unified system, so that all ratings can be aggregated. This is a relatively simple system to achieve, and can be cost effectively deployed over the Internet. One of the keys to the system is that each rating needs to be anonymous, and each individual can only rate one event on one occasion (to avoid vindictive ratings).

Who is providing all the IT?

Each medical provider will have complete freedom over the system they use, provided that they can offer the information necessary for the operation of the system securely and with the data in a common format.

How could it be implemented?

The only complication in implementation is ensuring that everyone is prepared to provide data in an appropriate format. For provision of hospitals, the simple solutions is to take the existing hospitals and make them independent charitable trusts. From that point forward the market will then adapt to meet the demands of both patients and doctors. There need be no further intervention.

What if people have to travel for treatment? Won't they complain?

This is a question of explaining the benefits of the system to people. At the outset, there will be problems, complaints, news reports about the 'terrible hardships' this caused x,y, and z person. This is all about explaining that no system can be perfect and asking for patience whilst the system beds in, and patience until the benefits can be felt. The system will certainly improve standards over time, such that having to travel to get decent care will diminish as a problem over time, though will never be eliminated.

You've missed out a lot. What about, say, midwife services?

There are many elements not dealt with in detail. I am only establishing guiding principles here. Apply the principles laid out, and I think you will answer this question yourself.


As for my proposal for education reform I do not suggest that this is a finalised system. It is an idea, a framework, and nothing more. The purpose of the system, just like education, is to create a system that is both cost effective and provides good quality. In an ideal world, there would be no government role, but this offers a compromise between a state funded and private system.

In this system, everyone has their interests aligned towards quality and cost. A doctor can only propose a cost effective hospital, and a patient will need to decide what their priority is - locations, cost, availability over time, and quality of care. In such a system, over time, the healthcare system will shape itself to the needs of patients, but will shape itself in a way that offers cost effective care without sacrificing quality. Most importantly, paying for the care will not cause individuals hardship, as the maximum payment is !0% of income per month, or 12% if dentistry is included.

My reason, as for education reform, for such a system is to alter the structure of the UK, with an aim of making it more effective in the allocation of state expenditure. In this system, the state would still be required to offer subsidy, but that money would be used more efficiently and effectively, and with a vastly reduced bureaucratic cost. Furthermore the quality outcome would be improved for this reduced cost.

As before, comments on the system will be welcome. I hope that, at least, such a system motivates you to question the current centralised system.


  1. Yes it probably would work, and I'm sure the adoption of this sort of system is inevitable. It fits well with the 'choice' agenda which the government thinks people want (personally I hate having to make choices, and I am happy when they are made for me, particularly if I am ill!).

    Of course the adoption of such a system would be an admission that the idealism that led to the previous NHS was misplaced which would be a little sad.

    One subtlety I can't quite see the point of is that a hitherto healthy person would not have been registered previously. Is it conceivable that a person could reach adulthood without consulting a doctor or dentist?

  2. I like this idea a lot.

    You could sow the seeds of a system like this by introducing it partially WITHIN the NHS. In fact, I see no reason why we have to remove the name NHS at all, as people are comfortable with it. Many of the changes the NHS have gone through reflect some level of private management anyway. It wouldn't be a big step to tell people their health will now be managed through a Health Account.

    One thing I really like about this would be that people could look at their health account and see what it is. This way, people see the real cost of what is done for them, which I think they don't presently understand. It might help intelligent folk be more humble about what they get and a bit less critical.

    Finally, wouldn't it be a good idea for everybody, even people with no medical costs against their name, to pay some minimum percentage from their pay anyway? The money to be stored in their account, accumulating (with interest) against any future medical costs. If people are only paying their percentage when they get ill this could create some serious cashflow problems, particularly at the outset. A minimum health insurance payment every month is something people are used to with NI now anyway.

  3. Sorry, but I think this is a dreadful idea. The poor would be paying for any major treatment (eg. a heart bypass)- and having 10% of their income deducted- perhaps for life. Whereas the rich would get payments over within a month or 2.
    Furthermore, poor or middle income patients would almost certainly hold back from visiting the doctor for financial reasons - conceivably until it was too late, for example in cases of cancer, where early symptoms can be confused with those of minor ailments.
    Now I'm not saying that some NHS reform isn't desirable, and I am in fascinated agreement with many of your observations about the causes of the economic crisis - but I find your solutions too harsh.
    Why not do away with the Armed forces instead (individuals could pay Blackwater to protect them in the event of a French, Russian or Chinese invasion) I like that idea a lot more...

  4. Danny M offers an interesting criticism, which is that the system is unfair. In particular, that the rich would pay in a couple of months,in contrast to the poor who will have to pay over a longer period.

    However, he has not accounted for the following:

    1. The system as it is proposed is actually a system of partial subsidy and interest free loan. In absolute terms, assuming that the rich person and poor person pays off the cost of treatment, they will have been charged the same. However, the poor person is gaining a greater subsidy, as the loan is over a longer period. This is worth a great deal of money, in particular for a poor person paying for a major operation. The rich person's prompt payment helps keep the cashflow of the system positive, thereby subsidising those who pay less quickly.

    2. The percent repayment is capped. As such, if a poor person requires a large amount of treatment it is quite possible they will never fully repay the costs. As such, they will gain a significant subsidy.

    3. Even under my simplified tax system, the rich person will be paying more tax in absolute terms. As such they are the person making the greatest contribution to the subsidy that is implicit in the system.

    As such, the poor person is receiving a greater subsidy in interest repayments, and potentially an absolute subsidy.

    More to the point, I am not sure how guaranteeing health care for all could be called 'unfair'.This is the purpose of a national health service - that no person is denied treatment regardless of income. As such, this is inherently fair, in that it guarantees equal access to all.

    In one reading of 'fair' that Danny proposes, what he appears to mean is that poor people should not pay for their healthcare, and that rich people should pay for the healthcare of the poor. I am not sure how this is 'fair'. For example, living in a house is a necessity in the way that healthcare is a necessity, or food is a necessity. Should the rich pay for all of this too? Where do you stop? At what point does such fairness start and stop?

    It seems to me that equal and (virtually) unlimited access to healthcare is a good balance of fairness. Yes, the rich will pay more under this system, but the poor also contribute significantly, but not in a way that impoverishes them. In the end, everyone gets healthcare, and no one is made to be poor in the process.

    Danny M also says:

    'Furthermore, poor or middle income patients would almost certainly hold back from visiting the doctor for financial reasons - conceivably until it was too late, for example in cases of cancer, where early symptoms can be confused with those of minor ailments.'

    My answer is that they are grown up people, not children. If they see the utilisation of a small part of their income as more important than their health, then they are fools. It should not be the business of government to protect people who are fools from their own foolishness.

    They are grown up people, and need to take responsibility for themselves and their own choices over how they use their income. In real terms, we are asking for a choice from (for example a very poor person)of whether they go out once a week for a drink at a pub, or look after their health by visiting a doctor.

    In addition, the system makes provision for some free of direct charge preventative medicine checks.

    Danny also suggests that my solutions are too harsh, whilst at the same time agreeing with the analysis of the crisis in the blog. I am heartened that he finds the analysis interesting, but the implications of that analysis need to be accepted.

    We simply can not afford such an expensive and inefficient system as the NHS as it now stands.

    Danny's suggestion is to do away with the armed forces. This is beyond the remit of my blog and my solutions, which are aimed at making existing structures as efficient and effective as possible, whilst trying to retain the underlying principles of their purpose.

    It is, however, an interesting point in that the structure of the armed forces does need some consideration. Perhaps in a later post....reform of the Armed Forces.

    A much appreciated comment, as it has driven me to discuss some underlying principles..

  5. First post - interesting blog!

    I can't see how such a system would provide useful finance for a health service. The NHS system is extremely disproportionately used by the elderly. I am 30, and I haven't ever had cause to visit the doctor about anything serious. A mole removal at 16, and some moisturising creams for my eczema, that's it. My 80 year old grandmother is suffering from Parkinsons, and she probably consumes more medications per month than her entire income. Her income is next to nothing and her life expectancy is sadly not long. A stop on a proportion of her income is not actually going to provide any meaningful NHS finance, either in value or duration. Creating a lifelong draw on the resources of one of those rare instances of those unlucky enough to acquire an illness in youth is nothing more than a bad luck tax. And the thing is, it's not going to shift the basis of the NHS away from direct government subsidy, since the bulk of its users are elderly and will not pay off the costs they incur before they die, indeed, the costs of administering the bureaucratic system to stop a varying proportion of income alone might account for more than the contribution of many patients. I guess you could pass the charge on to an inheritance tax - the fairest tax of all because it falls only on the dead - but inheritance taxes are very easy to game.

    Other people who are chronically ill such as the disabled, tend to have suppressed opportunities for earning, too. My father in law has MS and has had a stroke, and he's five years off retirement age. He hasn't worked for ten years, because his illness has precluded him doing very much at all.

    So your system would probably not change the bulk of health service funding, which will still be a transfer from general taxation, albeit buttressed by a tokenistic draw on the income of the ill. But it would create the inequity that somebody who is unfortunate enough to develop cancer in their early 20s will carry a financial burden from it for the rest of their working life, along with the physical and mental legacies.

    The thing about healthcare is that those who need it most don't generally can't afford it. The system must always be financed by the well - either through the taxation system, or an insurance system. Yor idea, although it pretends otherwise, would just be the same as the current one (with some reheated 'internal market' and 'patient choice' stuff from the Major and Blair eras respectively). The attempts to make the ill pay would be tokens in terms of the cost of care, yet also would also manage to recreate many of the inequities which existed before social healthcare.

  6. Swirus offers a very interesting argument, and one with considerable validity. However, I think I have already pointed out that the system is one of subsidising healthcare. I agree with the perfectly reasonable point that it is the old who are the heavy users of the health care system.

    However, the young also use the system to a sufficient degree that they can influence the efficiency of healthcare through their choices, and the same for older people for all but the oldest with serious illness (no prospect of paying the full amount back).
    even for the latter group the costs will be minimised through the bidding system, and quality standards will also be enhanced through the system.

    As for fairness, this medical system takes the misfortune of our imagined cancer patient, and addresses that misfortune. The system will (if it is possible under current medical practice) rectify the problem. This is done for a small percentage of that person's lifetime income. This exchange seems a small price to pay to stay alive and healthy.

    Furthermore, that percentage of income will help ensure that the funding is available for others to have the same benefit. The system will also help ensure that the treatment is enacted in as cost effective and efficient way as possible. This means that there will be more money available for other people to benefit, and the quality of the treatment will be better.

    No system can be perfect, but I think that this system has the benefit of directing a finite resource as efficiently as possible, but at a small cost to those who are the greatest users of the system.

    I keep on coming back to the same point. Nobody is denied treatment, and I think that (of itself) is a pretty substantial commitment.

    Life is full of potential misfortunes, and it becomes a point of both philosophy and also practicality as to whether government should (or can) seek to equalise all outcomes, and remove the ravages of all misfortunes. I would suggest that, if government seeks to remove all risk of misfortune, then it is setting itself a task that can never be managed.

    An example of this can be seen in the endless attempts of government to remove risk in finance. You may want to see my post on banking regulation to examine this.

    The point in the reforms that I propose through this blog is to try to offer systems that are about taking the resources that are going to be available (and these will be diminishing), and encourage better use of the resource.

    In a perfect world, it would be possible to have infinite resource for healthcare, but it is not a perfect world. As such, compromises must be made.

    A small percentage of an individual's income for their ability to have health seems a very small compromise. Our imagined cancer patient has his/her health, and society has a system that maximises their **overall** resource.

    This point applies to the people who will not earn much. They will still be directed towards maximising the resource available, as they will have an incentive to do so. That percentage of income is the only way to drive people to think of resource. It is not a perfect system, but people must have a stake in the system they use for it to operate efficiently.

    It all comes back to the point that resource is finite, and we need to have a system that maximises that resource so that it is available to all in a way that the potential of the limited resource is maximised.

    I hope I have explained this clearly, but am sure the questions will continue. Just to be clear, I would love that there is a system in which there is endless resource for health, that there is no need for compromises. The trouble is that this is not the case. Resource is finite and overall resource is diminishing along with a collapsing economy.

  7. Dear Cynicus,

    A very interesting blog that raises some key issues about the sustainability of our current economy.

    Regarding healthcare, it interests me that this has only become a burning issue in recent years. Healthcare systems, whether nationalised like the UK or privatised like the US, seem to have functioned well until recently e.g. up until about 15 years ago.

    This leads me to the conclusion that it is the ageing population of the West and the increasing costs of ever more complex medical treatments that have led to the breakdown of healthcare systems. In the UK, the government is loading up with debt for future generations to fill the gaping hole in NHS funds while in the US individuals are increasingly going bankrupt from impossibly large medical bills. Neither system is desirable.

    Unfortunately, your 'user pays' system, while market-based and thus more efficient, would not solve the fundamental problems of an ageing population and increasing cost and complexity of treatments. The elderly are the main users of healthcare but if a 'user pays' system were introduced tomorrow, very few of the current NHS clientele could afford to pay anything beyond a few pounds a week, which is nothing relative to the costs of their care. The reality also is that if a user has to pay directly from his own pocket for complex medical treatment e.g. mulitple organ transplants, skin grafts due to burns etc he may never earn enough in his whole life to pay it back. We see this in the US where non-insured users do pay directly for their own treatment and mostly end up going bankrupt as some modern healthcare costs are too vast for one individual to bear.

    I would suggest that a reformed insurance system is the only way forward as this is the only way that large costs can be met collectively. My experience of living in Germany and using its healthcare system was very positive. Insurance was a legal obligation for all citizens but there was subsidised insurance for those who couldn't pay. Users had a chip and pin card that was simply scanned through on any visit to a doctor and all records were electronic. Choice of any doctor was also completely free although there was no formal rating system.

    The Germans seem to have got it right so it shouldn't be so hard for us to follow suit but there is one caveat: even in Germany, healthcare costs for their growing elderly population are mounting so their system is also under pressure.

  8. A very good idea. There would be a reduction in general taxation to offset the payments.

    I have a gut feeling that the proportions of income you suggest are too low. Too many would never pay off completely to keep the rates as low as suggested. It would be good to have some figures based on present spending and demographics.

    At present it is just about possible to control overall spend by such means as NICE. They however come under considerable pressure (some of it no doubt encouraged by drug companies) to increase spend on drugs and evermore complex procedures. Think of the increased pressures if people thought they were paying for their treatment. In yielding to these pressures payment periods would be extended until more and more revenue would be lost by death leading to revision of repayment rates.

    The idea of rolling the debt at death into death duties would seem to have some mileage provided provision for spouse/partner were made as with present arrangements. Debts would be deferred until the death of the second person.


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