Published: 18/04/2002, Volume II2, No. 5801 Page 7

A Conservative Party document looking at alternative ways of funding and running healthcare systems has been attacked as 'moving towards an Americanstyle two-tier Medicaid system' by a government minister.

Chief secretary to the Treasury Andrew Smith said: 'This document confirms there will be no guarantee of free healthcare for everyone at the point of use.'

In what was seen as pre-Budget manoeuvring, the research paper - Alternative Prescriptions - compares the NHS unfavourably with healthcare systems in other developed countries. The NHS scores badly on 'responsiveness', it argues, and is only seventh out of 20 countries on 'fairness'. The NHS is similar to Eastern European systems which had been established under community rule and which were now being abandoned, it says.

The report is added ammunition for the Conservatives' claim that more money should not be spent on the NHS without accompanying reforms.

But they have been careful not to move too far in support of systems which abandon some of the principles of the NHS.

Conservative leader Iain Duncan Smith, in the forward to the report, says: 'I believe in the ideals of the NHS... the problem is that at present the NHS is failing to deliver on these ideals.'

He argues that other systems share many of these ideals but manage to deliver better care.

'We need to learn from other countries if we are to improve the health service in Britain. If we do not it will be the British people who will suffer, as they suffer now.'

But he adds he accepts more needs to be spent on health.

The report, which looks at different healthcare funding and delivery systems across Europe, Australasia and the US, stops short of recommending any particular alternative to the NHS, but concludes: 'It is possible to have a national health system in which the government does not own all the hospitals and employ all the staff.'

The report is critical of the remit given to former NatWest bank chief executive Derek Wanless, who was asked by the Treasury to produce a report on the future of the NHS.

This limited the report to looking at how a publicly funded system could be financed - not at alternative ways of funding it, it says.

Shadow health secretary Dr Liam Fox has defended himself after reports were published of an address in which he urged the party to undermine public confidence in the NHS.

The Daily Mirror published transcripts of a speech given to the Conservative Medical Society, during the Conservative party spring conference, in which Dr Fox said: 'In terms of health policy is firstly to persuade the public that the NHS is not working.'

Following publication of transcripts from the meeting - which had not been open to the media - Dr Fox said: 'The Conservative party is engaged in an openminded debate about the future of healthcare in this country. This is in contrast to the government who have a closed mind.'