tinctive and separate process. The private sector and the operation of the provident schemes are significantly influenced by the presence of the NHS which provides subscribers with a comprehensive fallback position. The character of the provident schemes and the problems they face in maintaining their position are thus unique and differ significantly from institutions performing a similar function in countries overseas. Benefits paid by the provident schemes (including the five smaller) came to £11.9m in 1968, rising to £15.1m by 1969. This represented 87 per cent and 83 per cent of subscribers' total payments of £13.7m and £18.3m in each year (Table 8). Both benefits and payments for all items rose. The greatest rise was for hospital bed and nursing charges. due largely to the increased charges for private beds in NHS hospitals, introduced from 1 April 1969. Since most schemes provide cover only for a set amount rather than for all or a given proportion of hospital bed charges incurred, the proportion covered by benefits fell. This leads to the need for movement to higher scale coverage. A similar charge is likely following the increases announced in March 1971. Table 8 Benefits paid and subscribers' payments by item of service 1968 and 1969 1. The estimate is compiled from data supplied by BUPA, PPP, WPA and the five small schemes. 2. Allocation of items is not strictly comparable between schemes and thus the table is an approximation. Also, a change in the basis and the main benefit scheme between the years affects allocation. 14 The benefits paid by the five smaller provident schemes were: Exeter Hospital Aid Society (Provident Account) Provincial Hospital Services Association (Private Medical Plan) Norfolk & Suffolk Hospital Cont. Association (Private Patients Scheme) Mid-Southern Hospital Cont. Association (Private Patients) 1968 1969 £82,835 £90,664 Hospital bed charges represented some 40 per cent of both payments and benefits in each year, at £6.1m of benefits and £7.8m payments by patients in 1969. Consultants' fees, including both surgical and non-surgical specialities, at £6-7m benefits and £8.8m payments made by patients in 1969, represented some 50 per cent of the total. The balance covered minor items like home nursing, ex gratia payments and other items not analysed. The payments made by the patients covered by the provident schemes provide a guide to the estimate for total payments for private medical cover by those opting out of the N H S. In 1967-8 receipts by the NHS for private beds came to some £7.6m for Great Britain. This exceeds the total payments by provident scheme patients (at £5.6m-of which at least £0.9m was paid to private homes) by some £3.0m. If the other costs, for consultants' fees and so forth, bear the same relationship to hospital charges as with the provident subscribers, the total amount paid by non-provident scheme private patients would total some £6.8m. The overall total therefore for private medical care comes to some £20.5m for 1968 of which two-thirds was covered by provident scheme membership. It is difficult to judge the position for 1969. Payments by provident scheme members rose from £13.7m to £18.3m, an increase of 33 per cent. Much of this was due to higher bed charges. If the non-provident patients' payments rose similarly the 1969 total would amount to at most £27.2m. However, it is doubtful whether the ratio between provident and non-provident patients remained constant, particularly in view of the increased bed charges which would encourage the taking out of insurance cover. It is reasonable to assume some increased switching to provident insurance for 1969 and adopt an estimate of some £25m for total private medical care in 1969, of which nearly three quarters was paid by provident scheme subscribers. This sum represents little over one per cent of the total NHS expenditure (which in 1968 amounted to £1,740m). Clearly in terms of the whole public sector, the private sector is of minuscule financial significance. However, this expenditure is concentrated upon one sector of the NHS, the hospital and specialist services. Total NHS expenditure here amounted to some £1,050m (60 per cent of the total), and the proportion of private treatment came to nearly 2 per cent of the whole. Approximately half of the private sector is accounted for by fees paid to specialists and consultants. In the NHS hospital service (Great Britain), total payments under the NHS to all medical and dental professional staff amounted to some £85m. It is therefore likely that fees received from the private sector amount to as much as 12 per cent of total N H S remuneration for all medical and professional staff and to an even significantly higher proportion compared to N H S payments to the consultant staff alone. The character and the function of the private sector spending or medical care can be brought out more clearly however when related to NHS and private sector costs per person. In its broadest sense the NHS represented a comprehensive health insurance scheme for all. In 1968 N HS spending averaged some £32 per person, including £21 for hospital services, of which £1.60 covered the hospital medical staff. The provident population in the same year spent an additional £7.20 per head, mainly for private hospital care, of which £3.50 repre sented specialists' and consultants' fees. It is clear that the private sector covered only a small proportion of total health cost risks, with subscribers relying heavily upon the NHS for some proportion of their current health costs as well as for the broader risks faced throughout their own life span or for the costs of the incidence of severe chronic morbidity. They paid at a higher rate than the community at large for a specialist service appropriate to part of their current routine healt episodes. Their subscription covers only part of the risks involved in the incidence of medical care costs. The greater part of their risk is borne by the NHS to which of course the private subscribers contri bute through taxation and often through a normal NHS weekly contribution. III The Issues The debate on the private sector of medical care is conducted on a variety of levels in terms first of fundamental principles of central direcion versus free market systems, next of the manner in which it might affect the resources and the procedures of the NHS, and finally in relation to individual patient care. The debate has been long-standing and exhaustive. At most, all that can be attempted here is to summarise the main lines of argument adopted by first the proponents and next hose in opposition to the private sector of medical care. The tone of this debate has been sharpened by the implication that the growth of the private sector is a measure of the shortcomings of the NHS and a reflection of the public's acceptance. The frequently stated claim that nearly 2,000,000 people have opted out of the system is put forward as a wholehearted rejection of the NHS by a large influential section. This statement however is a quite misleading oversimplification in the light of the close interlinking between the systems. The principles Discussion of the private sector forms part of the wider discussion in a mixed economy between the merits of public as against private provision. The arguments run across the broad range of services including education, housing and social security. They debate the efficacy of the ree market economy as opposed to centralised planned systems.15 The scope of these arguments cannot be comprehensively reviewed here. The views presented by the different schools are too complex to be capable of synthesis except on a most superficial level. Their 15 See for example: Lees, D. S., Health Through Choice, IE A, 1961; Lees, D. S., Titmus, R. M., Jewkes, J. and S., Kemp, A., Monopoly or Choice in the NHS, IE A, 1964; Buchanan, J. M., The Inconsistencies of the NHS, IE A, 1966; Seldon, A., After he NHS, IE A, 1968; Abel-Smith, B., Freedom in the Welfare State, Fabian Tract 353, 1964; Titmus, R., Choice and the Welfare State, Fabian Tract 370, 1966. 21 Station existence however bears heavily upon an examination of the problem at any level of analysis. In recent discussion concerning this aspect of the health services two specific themes have emerged. The advocates of the free market system take the position that a more comprehensive market system in health would lead to a signifi cant increase in resources devoted to medical care. An individual's demand for health services grows apace and more rapidly than income as improvements in medical technology open greater opportunities. There is a rising propensity to spend on health with growing real income. The dominance of the public sector and the dependence on central finance have, however, frustrated this demand. In consequence, resources devoted to health are lower than what would be attained in a free market situation. Experience of growth in health service spend ing and relative proportions of gross national product devoted to medical care in economies like the USA, where the free market pre dominates, are argued in favour of this proposition. It follows from these observations that greater freedom of choice and opportunity to spend through a market system would raise substantially the volume of health service expenditure. The growth of the private sector in Britain, manifested by the expansion of the provident schemes, is therefore we comed by the advocates of private medicine as a development in the right direction and demonstration of the basic free market proposition. This line of argument has led to the position where the private sector as represented by the provident schemes is seen, through possible compulsory and supplementary voluntary health insurance, as a major source of additional finance for the health services as an alternative to the present central government financed NHS.16 The alternative position taken by the advocates of a centralised planned N H S, mainly free to the user, is concerned more with preser vation of the existing situation and the fear that the private sector may erode the principles which are already embodied in the NHS. Their argument, therefore, draws upon the earlier discussions of principle which formed the raison d'être of the N H S. The original propositions embodied in the NHS contrasted health and wealth with poverty and sickness. The incidence of illness undermines the individuals' pros perity and the free market must, therefore, fail in deployment o resources, since through reason of ill health, the sick are less able express effective demand for medical care. In a mixed economy, function of the state is to redress the inequalities implicit in the free market and arising therefrom-to provide equality of opportunity. Equa access to medical care is thus of prime importance. In the curren 16 Health Services Financing, B M A, 1970. the |