There is great reluctance in Britain to consider any other kind of funding for the NHS apart from taxation, but we are surely close to a time when we will have to consider it. This morning I awoke with the thought, which felt terrible, that funding through taxation is a straitjacket that is causing increasing pain.

It’s effectively a law of economics and health that as countries get richer they spend more money on healthcare. And we know that at least some (probably many) people are willing to pay substantial sums for a few months, weeks, or even days of life. Indeed, as economists point out rational people who assume that their wealth will have no value to them once they are dead might rationally spend all their wealth on extra life: the “opportunity cost” is close to zero. Pharmaceutical companies that charge tens of thousands of pounds for drugs that may prolong life for weeks are also being logical in that they should for their shareholders price what the market will bear—and they know that the market will bear very high prices.

This is where a big problem arises for a system funded by taxation in that while it may be rational for some individuals to pay huge sums for extra weeks of life it is irrational for societies. If a society must bear the cost then many other valuable things—education, housing, environmental projects, security, the arts, and (most irrationally of all) social care—will be “crowded out.” This is what is already happening in Britain, and it will get worse.

It doesn’t seem to be widely understood that the steady increase in the cost of healthcare is not driven primarily by the aging of the population or even increased demand but by medicine being able to offer more and more—usually unfortunately at a substantial cost for a small gain. “Demand” grows because “supply” grows, supply driven demand. This pattern seems bound to continue, not least with the rise of genomics and personalised medicine. Policymakers might hope that innovation might reduce costs (as happens with many technologies), but this is generally not the case in healthcare.

UK governments are logically reluctant to increase expenditure on healthcare because of the “crowding out” problem, but this creates political tensions and strain within the NHS. Doctors, perhaps particularly junior doctors, are victims of the strain in the system: they must increase productivity, see more patients, and move them through faster. Medicine becomes ever less satisfying; the gap wider between how doctors would like to practise and how they are obliged to practise.

The terrible answer to the problem is that individuals rather than the government ought to pay in some way the high price for those extra weeks of life. One way would be out of pocket payments, but these would be unaffordable to many if not most; although it might be argued that it isn’t different from having to pay for the long term care so many people need. Why exactly should one be free to the individual but one not? To answer that one is healthcare and the other social care is simply to restate the question not answer it.

The other option would be an insurance system. It needn’t be that all NHS care would be insurance based but rather that people would have to buy insurance for expensive care that extends life by just weeks or months. How many would buy? People would have to buy the insurance before they became unwell, and perhaps people under 60 (or 50) might be eligible for the care even if that hadn’t bought insurance.

For me the NHS is the fulfilment of three principles: universal coverage, care free at the point of delivery, and equal quality of care for all. The principles don’t include funding from taxation or provision by state institutions: these are not principles at all but simply means to meet the three principles. And of the three principles universal coverage and free at the point of delivery have been eroded and equal quality care for all never achieved.

So it could be argued that requiring people to buy insurance for expensive care at the end of life would not erode the three principles any more than they have already been eroded. But to many it would be crossing the Rubicon, a step towards a system that much of the world already has of fee for service care for the very rich, insurance based care for the majority, and a rump service for the poor.

But we have to recognise that there is a fundamental conflict between some people at the end of life being willing to pay for expensive care to extend life by weeks and the government funding all care.

Richard Smith was the editor of The BMJ until 2004. 

Competing interest: RS was employed by UnitedHealth Group, a for profit health and wellbeing company, and still has shares in the group.