Leading Article: Faulty diagnosis, dangerous remedy

We are in danger of talking ourselves into a crisis that does not exist. For the third time in a week powerful voices have been raised arguing that the NHS is not affordable.

First Rodney Walker, outgoing chairman of the NHS Trust Federation, called for tax breaks for private health insurance to allow the NHS to concentrate on the elderly, the poor and emergencies. Then the Royal College of Physicians sought a kind of national rationing council. Now we have Sir Duncan Nichol, former chief executive of the NHS, launching a report arguing that tax funding cannot be expected to close a widening gap between demand and resources in health. This Healthcare 2000 report argues that there must either be more charges or that we must reduce the "free" NHS to an affordable core, allowing the better off to buy speedier or better treatment within the NHS.

All three claim to support the founding principle of the NHS - providing a service based on clinical need, not ability to pay. All are in fact doing precisely the opposite.

The most pernicious is Sir Duncan's report. His inquiry team contains distinguished and independent figures. But true independence can hardly be claimed for an inquiry funded largely by the pharmaceutical companies, which has two members directly from that industry and whose chairman (Sir Duncan) is now a director of Bupa.

More important, Healthcare 2000's arguments are flawed. Of course, as our national wealth grows we wish to spend more on health. Of course, the population is ageing. But to argue that rising expectations, demography and medical advance make the NHS unaffordable is to misrepresent the evidence.

Medical advance may tend to push up costs, but it can also dramatically reduce them. For example, modern ulcer drugs have taken the place of much expensive surgery and the price of computing power continues to tumble.

Nor is the issue of the elderly unambiguously negative. The old people of tomorrow will, in relative terms, be better off, thanks to growing occupational and private pension provision that will see them pay taxes, not just be a drain on the state.

Having failed in analysis, the report moves to a false conclusion with its idea of a "core" NHS. Most health care is not neatly divisible into essential and luxury items. Once the principle of a two- or multi-tier service had been allowed, any core service would over time be whittled down. The main group to suffer would not be the poor, who would have to be given state-funded access to the basic service, but large numbers of people in lower-paid work who would find themselves excluded from this safety net but penalised by their inability to buy higher levels of protection. This is precisely the situation that Bill Clinton has been attempting to tackle in the United States. We can do without it here.

The alternative is to allow public health spending to grow with the economy, to encourage those who wish to seek private treatment to do so in the private sector and to work away at the effectiveness of an NHS, which currently spends between 15 and 20 per cent of its cash on ineffective interventions. That is the way to preserve the NHS in principle and in practice.