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B883 - Private Healthcare (Regulation) Bill 2015 watch

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    B883 - Private Healthcare (Regulation) Bill 2015, TSR Socialist Party


    Private Healthcare (Regulation) Bill 2015

    A Bill to regulate and tax the private health care market

    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

    1. Definitions
    The following definitions are used in this Act:
    1. 'Private health provider' means 'any natural or legal person engaged in the provision of health care who receives consideration for such provision in any form and by any schedule or payment from any natural or legal person other than a public body'. 'Private health care' shall be interpreted accordingly.
    2. 'Market rates' refer to the lowest price for which appropriate private health care can reasonably be obtained.


    2. Price caps on private healthcare
    1. There will be a cap placed on the prices for which private health care may be sold.
    2. It is the responsibility of the Secretary of State to decide the level at which this cap is placed on different types of care.
    3. The cap should be as close as is reasonably practicable to 50% of market rates in 2015.
      a) The decision of the Secretary of State shall be amenable to judicial review for failing to meet this standard.
      b) The following shall always be regarded as having locus standi to seek judicial review of this decision:
      i) any private health provider, insofar as the decision challenged relates to their area of practice; or
      ii) any NHS trust, director thereof, or health practitioner.
      c) Any other natural or legal person seeking judicial review of the Secretary of State's decision shall have to demonstrate sufficient interest in the usual manner.
    4. If the cap is not changed manually by the Secretary of State, it will be automatically changed in line with the Consumer Price Index.


    3. Criminal offence of overcharging
    1. It shall be a criminal offence to charge more than the decided cap for any kind of private health care.
    2. Liability for this offence shall be strict.
    3. The maximum penalties for committing this offence shall be:
      a) A fine not more than six times the amount over-charged; and/or
      b) A prison sentence not more than two years; and/or
      c) Revocation of any relevant licence to practice, which may be supplemented with a ban on practicing for any period up to lifetime.


    4. Removal of VAT exemption for private health care
    1. The following shall be inserted into Schedule 9, Group 7, Value Added Tax Act 1994: "12. The above does not apply to any private health provider as defined by s1(1) Private Healthcare (Regulation) Act 2015."
    2. The price caps referred to in sections 2 and 3 above are prices before the addition of VAT.


    5. Commencement, Short Title and Extent
    1. This Act may be referred to as the Private Healthcare Act 2015
    2. This Act will extend to the United Kingdom; and;
    3. This Act shall come into force immediately


    Notes
    Approximate costings:
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    1. All non-referenced figures taken from https://assets.digital.cabinet-offic...ain_report.pdf
    2. Total private health market in 2012 = £6.71b. This includes £1.195b spent by the NHS.
    3. Approx. 250k healthcare professionals in the UK, most of whom carry out at least some private work.
    4. This means that on average, a healthcare professional will generate revenue of £26840/annum from private healthcare work.
    5. Because those who do more private work will be better-paid as a whole, we can assume that these will, on average, be distributed towards the higher end of the income spectrum, and so we will assume that the portion of this which is income is taxed at a higher rate.
    6. There were 240m NHS admissions (http://www.nhsconfed.org/resources/k...ics-on-the-nhs) in 2014/15 and 1.6m private admissions in 2012. The NHS budget in 2014/15 was £113b.
    a. The average spent on a private admission by the patient is approx £4200.
    b. The average spent on an NHS admission by the NHS is approx £470.
    i. This indicates an 89% possible profit margin (of £3730) on private admissions assuming equal quality of care.
    7. The RAND estimate for price elasticity of demand for private healthcare is -0.17 (http://www.rand.org/pubs/monograph_reports/MR1355.html).
    a. This suggests that the proposed 40% reduction in price for private healthcare (50% actual reduction, -20% of that as VAT) will only increase demand by 6.8%.
    b. Given our study has suggested that current prices are well above competitive (equilibrium) prices, we can assume that the change in price would not cause any change in quantity suppliers are willing to provide.
    8. It follows that the revised figures would look something like 1.71m private admissions/year at a cost of £2100 (base 2012) each.
    9. Given the profit margins we have seen above, the average income from private healthcare for a healthcare professional will be £2950 pre-changes (generating ~£1200 tax) – there is little reason to think that overheads will change significantly given the huge profit margins which exist at the moment, so we will assume that this stays relatively constant.
    10. There will be an average reduction of income from private healthcare of 46.6%.
    a. This leads to a total revenue of £3.58b in the private sector – a difference of £3.12b, of which nearly all was profit.
    b. This leads to a loss of ~£602.4m in corporation tax.
    c. The amount paid in VAT will be ~£716m.
    11. Therefore, this Bill expects to generate ~£103.6m in revenue for Her Majesty's Revenue and Customs.


    Policy explanation:
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    The existence of a market for private healthcare suggests two things: 1) private healthcare is assessed as better than public healthcare (this is probably accurate - waiting times are shorter at the very least); 2) this allocates better health based on wealth.

    While allocating health based on wealth may not be a market failure in the sense of maximising GDP, in terms of utility it necessarily is, unless one makes the incredibly questionable assumption that the lives of the wealthy are more important than the lives of the poor.

    This Bill aims to redress the balance by treating private healthcare as a luxury and taxing it accordingly, and reducing the economic incentives for healthcare providers to operate privately, hopefully retaining more and better-skilled professionals within the public sector.
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    Aye.
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    Nay. The Private Healthcare system can charge whatever it likes. We should be improving the NHS instead.
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    Aye, fantastic idea.
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    Absolutely not, let the free market be. We should be improving the NHS, not dragging private healthcare down to it's level.
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    Why? It's not like there isn't an alternative for those who can't pay?
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    Sorry, despite I like the sentiment, it has to be a nay. I do like the removal of VAT exemption though, it's the price caps I have an issue with.
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    As the author of this Bill, please quote me with any questions and I'll answer when I get home from work tomorrow.
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    Yet more "it's easier to drag the top down than lift the bottom up"

    If somebody wishes to pay 10x as much why should we stop them?
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    Section 2.3 is ideologically offensive.

    Also, isn't Bupa not for profit.
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    Nay.
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    §3(a) - all decisions by cabinet ministers are subject to judicial review.
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    (Original post by Jammy Duel)
    Yet more "it's easier to drag the top down than lift the bottom up"

    If somebody wishes to pay 10x as much why should we stop them?
    I was actually quoted 7 quid per month for private outpatient insurance. Well worth taking up sometime.
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    Nay
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    I'm going (probably repeat) ask the question of "Why?"
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    Nay , Nay , Nay
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    An Aye from me.

    I think that introducing a pricing cap on private services would increase it's attractiveness to those who currently solely rely on the NHS. If, as I hope, people move to private health care completely then the NHS can be used for those who really cannot afford private health care.
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    (Original post by nebelbon)
    An Aye from me.

    I think that introducing a pricing cap on private services would increase it's attractiveness to those who currently solely rely on the NHS. If, as I hope, people move to private health care completely then the NHS can be used for those who really cannot afford private health care.
    Why would a pricing cap make it more attractive? How many people actually use it without insurance (who aren't worth millions) and would the caps really bring it down to a point where more people would consider using them? I imagine that for most things even the NHS price would have people not using it.
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    I don't think this is the correct way to do it. We backed a bill to limit the profit an organisation can make from private health care, I think that is a better way, as different procedures require different equipment/costs for different patients.

    Agree in principle however, and were this to incur in RL, this would be a relieving first step (assuming that private health care will become the norm under the Conservatives)

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    There's is no benefit, in this instance, of going against the free market.
 
 
 
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