Wish you were here? The cost of health tourism to the NHS

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As government departments tighten their budgets and the British people throw their weight behind lower spending on welfare benefits, there has been a spirited debate about the cost of 'health tourism'.

Who is entitled to free NHS care?

The NHS was founded on the principle that it is a service "free at the point of use" for those ordinarily resident in the UK. However, foreign or migrant patients are usually required to pay a fee for their treatment.

The NHS Charges of Overseas Visitors Regulations 2011 outline the exceptions to this rule. As we've noted in a previous factcheck, the cost of care for EU nationals (as well as those living in Norway, Switzerland, Iceland and Lichtenstein) is covered by EU regulations 883/2004 and 987/2009. The UK also has bilateral agreements with several other countries including Australia, Kazakhstan and Russia. These arrangements allow the NHS to recover its expenses from the country concerned.

What's the cost of health tourism?

Last month, after the Government revealed its plan to limit the benefits available to migrants, the Health Secretary Jeremy Hunt claimed that the abuse of the NHS might be costing the taxpayer £200 million. Meanwhile, a headline in the Spectator put the bill in the "billions".

While the Spectator admits that the "billions" figure is a speculative estimate, we've already looked into the origin of the £200 million figure. The statistic is not a new one - it has been appearing in discussions of health tourism for many years.

We were able to trace its origins to an estimate made in 2003 by debt collection agency CCI Legal Services, which works with the NHS to recover the payments it's owed.

CCI had actually estimated that the costs could be anywhere between £50 million and £200 million, with some in the media choosing to report the higher figure.

CCI's £200 million is much larger than the figures that the Government has provided - approximately £20 million over the course of the past 5 years. In response to a Parliamentary Question in 2011 Health Minister Anne Milton MP offered a breakdown of the cost to the NHS of overseas visitors (which includes those UK nationals who are not ordinarily resident here).

The graph below shows the money recouped (blue) and money written off (red) by the NHS since 2006:

n.b. The Department of Health provided us with 2011/12 data, which will be available to the public after it has been reviewed.

But how can we account for such a vast disparity in the numbers - one estimate being a tenth of the other?

First of all, when we contacted CCI to ask them if they thought the likely costs incurred by overseas patients were still "significant", they said that it's likely the bill had been reduced since the original 2003 calculation, as there had been "greater awareness of the issue and greater effort to tackle it".

But while CCI suggest that £200 million might be an over-estimate, the government's figure of £20 million probably undervalues the scale of the problem.

Jeremy Hunt cast doubt on the official £20 million figure when he commented, "It's a huge issue and I don't think those numbers [the £20m figure] are at all accurate." Why might this be?

Firstly, the government data, although it has been audited, only includes recognised debts that have been written off. It fails to account for fees that hospitals are still trying to recover.

Secondly, the government statistics do not include Foundation Trusts (FTs) - self-governing hospital trusts free of central government control. Between 2006 and 2011, 137 hospital trusts became FTs and so presumably were not submitting information on the number of overseas visitors using (and abusing) their services. This means that we are missing a large tranche of data.

Thirdly, and perhaps most significantly, there are those people who aren't entitled to free treatment but who have used the NHS without being detected. These patients, who remain 'off books', are the focus of the Spectator's article on the untold cost of health tourism.

So the main reason why the CCI's estimate of £200 million is so much higher than the Government's £20 million is that it attempted to account for overseas patients that go undetected by the health service, and therefore claim free care for which they're not eligible.

Mr Hunt has previously said that "we identify less than half the people who should be paying for NHS care and collect less than half the money that should be collected". When we asked the Department of Health to provide more information on how it had arrived at this statistic, we were told that it was produced through an internal analysis of data that's currently under scrutiny.

If we apply Mr Hunt's 'less than half' estimate to 2011/12, the cost of overseas visitors could be in the region of at least £66 million (double the total £33 million that the Government was owed - the £21 million collected plus £12 million written off as debt). As the Government reclaimed £21 million of this, we might estimate the net cost of health tourism to be approximately £45 million. However, this is a back-of-the envelope calculation.

To put these numbers in context, whether we are referring to £200 million (CCI's estimate), £20 million (the Government's official estimate) or £45 million (a figure calculated on the basis of the Government's internal analysis), we're talking about no more than 0.15% of the NHS's overall budget of £104 billion.

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Flickr image courtesy of acme