My article for Conservative Home with Owen Meredith.
Earlier this month, the government announced a significant but under reported change in the way the NHS in England will issue prescription medicines. From next year, medicines that cost more than £20 per pack will have the indicative cost, alongside the words “funded by the UK taxpayer” printed on the pack.
This is a welcome and bold move. It takes another step in the direction of empowering people and providing them with more information about the public services they use. We have written before about the importance of users of all public services better understanding the cost and value of those services. Not only does this help greater understanding of the politics and economics of public services, is also gets over the something-for-nothing culture that often prevails.
It would be madness not to look at the £14.4 billion cost of prescription drugs to the NHS, which rose 7.6 per cent last year, at a time when the NHS needs to find £22 billion of efficiency savings over the next five years. These savings need to be made even while NHS spending as a whole is protected and will in fact rise by £10 billion.
In an article in September 2012, we argued:
The move by Jeremy Hunt to inform patients of the costs of medicines dispensed on prescription is another very welcome step along that pathway to better transparency and understanding. Let us also take this opportunity to remind ourselves why this is needed. As it stands, we are expected to deliver a budget deficit of £69.5 billion in 2015/16, that is spending £1,000 more than we raise in taxes – this year alone – for every man, woman and child living in the UK. With Government departments needing to find 40 per cent savings in order to plug that gap and deliver balanced books, we need to bring public opinion with us when cutting the size of the state. The easiest way to do that is to show people exactly what it costs.“To rebalance the economy and restore a rational state, the Government needs to act boldly and remind taxpayers just what it is they are paying for… following a Private Member’s Bill introduced by Ben Gummer MP, Osborne took the next baby step in the transparency agenda and adopted individual tax statements… but tax statements are only one side of the coin… What is also needed is a personalised statement of services to be issued alongside your tax statement… to break the cycle of dependency and deliver a smaller State, we need everyone to be more connected to what we get and what we pay for it.”
And there is plenty of evidence to support the case. In Wales where prescriptions are free, Paracetamol – which costs as little as little as 23 pence over the counter – is prescribed on the NHS at the rate of more than 1 million prescriptions a year. In fact, doctors in Wales wrote more than 74 million prescriptions for free medication last year. The statistics published by the Welsh Government reveal that the number of prescription drugs being issued is now 52 per cent higher than a decade ago. This is a scandalous waste of public resources. Simply reminding people (and doctors) of the cost to their purse and those of other taxpayers would have a behavioural impact on demand that could reduce demand by at least 20 per cent.
Take another example, there have been numerous studies on the cost of pathology tests and how simply changes to request forms or making doctors aware of the cost of tests dramatically reduces the number of unnecessary tests carried out. Replicating this across all public services is a sensible approach to reduce waste and manage costs.
In making this simple change, Jeremy Hunt is seeking to tackle the level of prescription waste, which costs the NHS £300 million a year. He is beginning to broker a new deal between the citizen and State and in so doing will reaffirm the value of public services received.