The Future of Medicine 8 Where does the Money Come From?

The medical services cost a large sum of money and many must wonder where it all comes from.   It might be better to ask where the money does not come from.

So far as the hospitals are concerned there is scarcely a possible source of income which is not tapped. These vary from a voluntary purchase of a penny flag in the street, through the compulsory assessment of a patient’s ability to pay part of his maintenance while in hospital, to the millionaire gift of thousands to found or endow a special department.  For the medical services generally money is spent by individuals, by groups, and by communities on all the agencies we have mentioned, and in addition the public spends a very large sum on all sorts of devices for maintaining health. If we include the amount lost in incomes through ill-health, the cost; of the services which assist in the prevention of disease, and the sums spent by the public in its own efforts to improve its health by self-medication, it can be shown that ill-health costs this country some £450,000,000 each year

It does not matter what form our medical services take, much of this expenditure must go on, and indeed the amount spent on sanitary services and preventive methods may increase. As the health of the community improves and as disease is detected, at an earlier and more easily cured stage, the £120,000,000 which is lost through absence from work and minor degrees of incapacity will unquestionably become less. If the public becomes better educated both as to normal health and as to the ability of the medical profession to treat all diseases, the amount  spent by the public on medicines, special foods, devices for slimming and means for increasing weight will drop to an insignificant figure. On the other hand, the truly medical services will go on: and we may confine our consideration to the amount which they cost.

There are many items in our national expenditure on disease services which are not easy to calculate. There is, for example, no reliable information on the amount spent annually on nursing. Nevertheless some figures are known accurately and some can be estimated fairly correctly, and the cost of the medical services may-be taken as £140,000,000, which is spent as follows: –

£ millions
  • Fees to doctors and dentists
  • Medicines, etc. : (not N.H.I.)
  • Voluntary hospitals :
  • Public Health hospital services
  • Poor Law hospital services
  • Mental hospitals
  • N.H.I. doctors’ fees
  • N.H.I. medicines, etc.
  • District Nursing, .etc.
  • 45
  • 20
  • 18
  • 22
  • 7
  • 12
  • 10
  • 4
  • 2
: 140

Compare with figures in Britain’s Health (P.E.P. Report).

By war-time standards £140,000,000 is a mere bagatelle which the State can provide very easily. As the medical services stand today, however, it is a sum of money which has to be collected in a thousand and one ways and which costs in collection expenses alone many millions of pounds. The voluntary hospitals, for example, have to pay salaries of staffs, to devise schemes for attracting donations and subscriptions to the hospital funds, and the public receive many calls for help, yet the total amount collected in donations after all the garden parties, whist drives, raffles, teas, and other devices does not exceed £6,000,000. A different machinery is necessary for the collection of payments by those patients attending the out-patient-departments or who are admitted to hospital. These direct  payments provide nearly £4,000,000.

Patients have long since learned that even when the rate of maintenance charged is not excessive, a stay in hospital may be a very costly affair. To obviate this there are throughout the country many different and of course quite unrelated contributory schemes whereby by payment of small sums free hospital treatment is arranged. It is estimated that there are some 150 separate schemes for this form of sickness insurance and that at least 10,000,000 people expect to receive their hospital care by means of sums they have paid into these schemes. In addition voluntary hospitals may also obtain sums of money from the local authorities and it is legal for even those councils who themselves own hospitals to make payments out of the rates to voluntary hospitals over which they have no control.

When we turn to the general practitioner we will find that it is almost impossible to trace all the sources of his income. If we take as our example a doctor with a good practice, that is to say, one with nearly the maximum permissible number of panel patients and a good number of middle-class patients, and if in addition the doctor takes any medical job in his district that is open to him we will discover that there are some ten or twelve regular sources of income. Of these the largest, and certainly the most regular, is the amount received for attendance upon the panel patients, which in its ultimate analysis really comes from three sources— the patient, the employer, and the State. Since the war the number of sources of income of the general practitioner has been still further increased by the establishment of paid posts in connection with air raid precautions. The effect of this has been to increase the total amount drawn by the doctor from official funds until today the money received, from such sources may reach as high as 70 per cent of the doctor’s total income.

It is perhaps of interest to note how many curious small amounts of money are collected by a doctor.  He gets special fees if he signs a cremation certificate, and may get a guinea or two if he provides a report for an insurance company. He has many applications for certificates and for witnessing signatures, and for some of them he collects a few shillings. When he notifies a case of tuberculosis, or one of the infectious diseases the local authorities pay him for each notification. In districts where diphtheria immunisation is done by the general practitioners and not by specialists he collects a fee for that. He may make a profit on some of the medicine he dispenses personally, and has even been accused of devices for getting his patients to supply his medicine bottles!

Even in the case of those services which are provided by local authorities all the money spent does not necessarily come from the one source. The local authority running municipal hospitals, health centres and clinics, the school medical service, and some of the special services, though it provides most of the money from the rates, nevertheless obtains grants from the Exchequer and also collects a fairly high proportion of the cost of some of the services from the patients using them. One source which the local authority does not tap is that of the steadily diminishing amount available by private charity.  There is, of course, no reason why the local authority should not accept donations or legacies for medical purposes and those who fear that the opportunity for private charity will vanish as the municipal hospitals develop will still be able to give money for the provision of special services and to help develop those hospitals.

It must be obvious ‘that any system in which money has to be collected from such a variety of sources is certain to be wasteful and complicates the provision of medical service by introducing considerations which have no relation to the treatment of the sick. A hospital committee which is constantly preoccupied with the consideration of new schemes for advertising the hospital’s need for funds tends to judge all medical service by the question of cost. Every doctor who serves at a voluntary hospital is aware that any request for new materials or apparatus will be granted or not according to their cost and the financial position of the hospital at any particular moment. Nothing could be farther from the spirit of Medicine than this linking-up of the arduous task of saving life with petty considerations of cost. There is also the definite danger that, when a hospital has built up machinery for collecting money which employs a considerable number of people, co-operation with other medical institutions is made more difficult because it might interfere with the money-collecting process. In general, the reduplication of any service is wasteful, and the amount of waste that arises from the lack of co-operation among the smaller voluntary hospitals is one of the reasons why the Nuffield Provincial Hospitals Trust is now attempting its process of rationalisation, which is designed to save the voluntary hospitals by linking them in one scheme, on a regional basis.

There are, however, other ways in which the general public wastes part of the money that is spent in the search for health. The lack of co-ordination and the failure to provide every type of service for all patients produces :a tendency to run from one doctor of one hospital :to another, and to receive advice and drugs from different sources which if not contra­dictory are seldom Complementary. The greatest waste is, however, in accepting the pseudo-medical opinion of those who, either because they make their livelihood from the gullibility of others or because they, have a genuine belief in one of the many healing cults which exist but are entirely unsupported by any scientific evidence, offer advice which involves the use of diet or of medical preparations which cost more than would more orthodox medical treatment. It is impossible to obtain accurate figures as to the amount the public spends in this way, but if one considers all the different foods, cosmetics, appliances, systems of diet and systems of living, with their attendant literature, special cooking methods, and expensive items of food, and if one adds the turnover of those patent medicines which spend over £3,000,000 a year on newspaper advertising, it is probably no exaggeration to place the amount wasted by the public in these ways at £100,000,000.

If space permitted one would be tempted to analyse some of the many ways in which the British public are persuaded to spend money uselessly in this pursuit of health and to reveal some of the astonishing quackeries that exist today. For the present, perhaps it is enough to note that at the most modest estimate a sum equal to more than half the total cost of the medical services is spent without return.