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It’s Time for a Dedicated NHS Tax

by John Brian Shannon

As we begin to deal with the middle stage of the COVID-19 crisis, it’s time to relook how the UK funds its excellent National Health Service.

On that note, you may recall that I’ve said many times on this website that things ‘evolve’ but they don’t always ‘evolve’ to the best result. While each individual decision over the decades on behalf of the NHS was well-meant and likely the only logical choice at the time, were we to now create the NHS ‘from scratch’ in 2020, it would look much different than the National Health Service we see today.

For example, we might see more, but smaller Hospitals — instead of the fewer, but larger Hospitals built in the 19th and 20th-centuries. Also, NHS Hospitals might be located closer to areas where the highest annual concentrations of injuries occur, complete with NHS-only access to on-ramps and off-ramps to get Ambulances on and off the motorways more quickly. Also, helicopters sitting and ready to fly from the roof of each Hospital, every minute of the year. And more.

Obviously, there are plenty of ideas that should receive fair consideration because continuing to do things the way we’ve always done them isn’t good enough when it comes to the health of every UK citizen, resident and tourist.

To wit; Early on in the Coronavirus timeline it became known that enough Personal Protective Equipment (PPE) for NHS workers hadn’t been stockpiled and lives were thereby endangered. Who knows how many were endangered, but enough that the government must ensure it never happens again.

In Germany, the same thing occurred (not enough PPE’s on hand to deal with their COVID-19 crisis) until someone remembered that many years earlier a brilliant person in the German military had decided to stockpile millions of PPE’s — consequently, the German healthcare system had surplus PPE’s, even delivering some to the UK’s NHS. Impressive. Los Deutschland!

Thinking ahead like Germany did costs money. (But it costs more if you don’t think ahead) It also takes political will and perseverance. It speaks to the quality of government delivered or not delivered to the people by the politicians in each decade, and that’s the whole point, isn’t it? Either the politicians are up to the task, or they’re not. If they’re not, let’s hope they become unemployed at the next election.

Now, let’s not lay all that on Boris and his team, after all, he’s only been Prime Minister for 9-months and he’s had some rather large items to deal with… Brexit, a future trading relationship with the EU, his own serous bout with COVID-19, and more recently, a newborn son with his partner Carrie Symonds. Congratulations to Boris and Carrie!

So let’s cut Boris some slack, shall we?

Still, we should add momentum to the idea that we need to fund the NHS properly instead of expecting them to provide the best healthcare in the world without the funding to accomplish the task.


One Tax to Fund Them

It’s time for the UK to add 1% to the existing VAT — and every pound sterling of that 1% should go directly to the NHS without being touched by any level of government. In fact, new legislation should be created to make it illegal for anyone in government (even the Prime Minister or the country’s Head of State) to delay or divert any of that 1% VAT NHS funding with mandatory prison sentences for any person involved in interfering with the 1% VAT NHS revenue stream.

Without healthy citizens and a well-funded NHS the United Kingdom is a much-diminished country, therefore, NHS needs to be well-funded and that funding must remain untouchable by any UK politician.

In practical terms, it means each of the devolved territories and England need to enact their own 1% VAT and direct all the revenue collected within their own jurisdiction to their own NHS organization to form the baseline of their respective NHS funding. (Let’s call the proposed 1% VAT “primary funding” for their respective NHS organization)

“Secondary funding” would be allocated via the respective Northern Ireland, Scotland, Isle of Man, Wales, and England annual budgets and “tertiary funding” can be allocated by the UK government.


Why would the UK government want to provide tertiary NHS funding to each of the five jurisdictions?

In order for the central UK government to have any say in Scotland’s NHS (for example) the UK government would need to provide some funding towards Scotland’s NHS.

To illustrate this further; In Canada, healthcare is the exclusive domain of each province which raise their own revenues from a combination of provincial income tax and provincial sales tax. Consequently, nowhere in Canada must people pay healthcare premiums. Therefore, almost the entire cost of each provincial healthcare system is raised via provincial revenue. But the federal government of Canada also kicks-in additional healthcare funding for the provinces each year (representing about 6.5% of each provincial healthcare budget) to, (a) ensure uniformly high healthcare standards across the country, (b) to ensure that citizens and residents of all provinces are treated without delay if injured while visiting another province, (c) and to maintain an universal healthcare database so that out of province visitors can be treated without delay if they suddenly become ill or sustain injury.

Why would the five jurisdictions want to accept tertiary NHS funding from the UK government?

Remember, primary healthcare funding would come from each territory’s 1% NHS VAT (including England) but it might not be enough to cover the full cost of providing all the healthcare necessary for their own residents. Therefore, secondary funding for each territory’s NHS service would come from a combination of (‘provincial’) income and sales tax, while tertiary funding would be provided to each NHS unit (annually) by the UK central government in a sort of ‘top-up’ modality to meet 100% of the annual costs of each of the five NHS units.

In this way, no monthly or annual healthcare premiums would be paid by individuals or companies and each NHS unit would receive funding from their devolved government with supplementary funding courtesy of the UK government.

Three funding streams, and one stream arrives completely free of government interference. If you’re a healthcare professional or healthcare administrator you’ve got to like that!


Let’s Recap

  • No healthcare premiums for individuals or companies — ever!
  • PRIMARY NHS FUNDING: All the 1% VAT revenue collected in each territory would go directly to their own NHS unit (only) bypassing government control or restrictions, thereby raising significant revenue to fund their own NHS unit.
  • SECONDARY NHS FUNDING: Each territory (Northern Ireland, Scotland, Wales, Isle of Man, England) would levy its own (‘provincial level’) income and sales taxes on their respective residents and use some of that revenue to help fund their own NHS unit.
  • TERTIARY NHS FUNDING: By definition, the UK government collects (‘federal level’) taxes and some of this revenue can be used to ‘top-up’ the budget of each NHS unit. This top-up should never exceed 10% of the funding of any NHS unit and the exact percentage would be negotiated annually between the (‘provincial level’) territories bloc and the UK government.

Finally, a shout-out to today’s NHS heroes, who risk their lives every day to protect us from a killer virus. Thank You! for your professionalism, sacrifice and courage.


A MUST-READ for anyone wanting to understand why the UK should adopt Canada’s excellent healthcare funding model

  • Canada’s Health Care System (Government of Canada website) click here.