Scarce resources in public services must be rationed when demand outstrips supply. In a market system, prices fluctuate to clear the market. However, where services are publicly funded and free at the point of delivery, alternative rationing methods, such as waiting times or clinical triage, must be used.
In the UK, the primary care sector faces unprecedented pressure. An ageing population, a rise in multi-morbidities, and shifting patient expectations have combined to create excess demand for General Practitioner (GP) consultations. Many consultations are reportedly for minor, self-limiting ailments, while millions of appointments are missed entirely each year ('did not attends').
One proposed solution is to introduce a nominal user charge (a co-payment of, say, £15) for GP consultations. Proponents argue this would act as a price signal, deterring unnecessary visits and encouraging self-care. Opponents, however, suggest that if we want to improve public health, the government should instead increase funding or expand the use of digital health technologies to increase capacity.
Introducing charges for primary care services represents a fundamental shift in the funding model of the NHS. Critics argue that such charges are highly regressive, taking a larger percentage of income from poorer households. This could lead to a 'two-tier' system where the affluent easily access care while the poorest are deterred.
Furthermore, medical professionals warn of negative externalities and long-term costs. If a patient delays visiting a GP because of a co-payment, a minor condition may deteriorate into a severe illness requiring costly emergency hospital admission. Thus, rather than saving resources, charges might shift the burden to more expensive parts of the healthcare system.
There are also practical concerns. Administering a payment system at thousands of GP surgeries would introduce significant transaction and administrative costs. To prevent unfairness, wide-ranging exemptions would be needed—such as for children, pregnant women, low-income earners, and those with chronic conditions. If the majority of patients are exempt, the revenue collected may be entirely offset by the cost of administering the scheme.
Using the data and your economic knowledge, evaluate the case for and the case against the NHS introducing user charges (co-payments) for primary care services, such as GP appointments.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.