Email
Chancellor George Osborne announced in his emergency budget that most government departments would face as average cut of around 25% over four years, but the NHS has been spared this retrenchment.
Sceptical pundits were quick to claim it is only a matter of time before the NHS also feel's Osborne's axe. They believe that the coalition government will inevitably target the NHS – probably in the Comprehensive Spending Review next October – dramatically reducing public health budget allocations. They think that the emergency budget was just verbal contortionism and that the true austerity measures are still to emerge from behind a smokescreen.
I think this view is fatalistic and cynical, as history suggests a different outcome.
According to the Institute of Fiscal Studies, the last time the UK government cut NHS money was under James Callaghan in 1977. The budget was slashed by just £500m (in today's currency). This is peanuts.
The last time a Conservative government reduced the NHS allocation was under Winston Churchill in 1952, almost 20 years before Osborne was born. And the cut was just £100m (also in today's currency).
The NHS is still hailed a pillar of the social welfare and underfunding it could compromise the future of the coalition government, especially as the Liberal Democrats view themselves as the champions of the welfare society. Their Liberal predecessors laid the foundation for the welfare state nearly a century ago under David Lloyd George. They would compromise their ideological foundations and alienate their voters if they changed their stance.
ICT investments in the health industry will not suffer any decline, either. This spend has grown in line with budget allocations, with an annual growth rate between 6.8% and 11.1% since 2002. These rates are similar to increases in Treasury allocations to the NHS, which have ranged between 6% and 8% during the same time period.
Healthcare spend cuts would not be in line with international trends, either.
According to the OECD report Health at a Glance 2009, healthcare spend as a percentage of GDP in the UK is just 8.4%, less than OECD country average of 8.9%. It is well below the largest European economies (France at 11% and Germany at 10.4%). Most OECD countries have increased their health allocations in the past 20 years.
OECD data published in June 2010 concluded that "in all OECD countries total spending on healthcare is rising faster than economic growth". Slashing NHS funding would send the UK in the direction, contradicting the flow in other developed countries.
Modernisation of the NHS is key to the future of the UK. The increasingly ageing population is placing enormous pressure on the healthcare system, and this will become more accentuated in 15 years, when a third of our population will be aged over 65 and more than 20m of us will suffer from some type of chronic condition. Government needs to take immediate action to cope with this apparently inevitable phenomenon. Budget cuts would represent an impediment.
It is therefore fair to say that the NHS is relatively safe from harm.
Some government critics have suggested that Whitehall will gradually and subtly privatise the NHS, firstly by encouraging trusts to embrace co-funding (top up payments), then by setting up more independent sector treatment centres (ISTCs) - perhaps under a different banner - and finally placing the healthcare trusts in the hands of private suppliers.
There is plenty of evidence, however, to suggest that this will not happen, as private suppliers are substantially less cost-efficient and effective than the NHS.
For example, the USA spends over 16% of its GDP on its (largely private) healthcare system – one of the highest figures in the world – and yet it performs very badly compared to most European countries according to most health indicators, such as longevity, chronic disease incidence, hospital death rates, etc.
A cataract operation costs the NHS just £741 – the amount PCTs pay acute trusts under the payment-by-results scheme. In the private sector, end-user prices range from £1,300 to £2,900.
The cost of conducting a surgery in an ISTC – a medical centre run by private suppliers on behalf of the NHS – is on average about 20% higher than in public hospitals.
Government is more likely to find solutions in technology as an efficiency catalyst and change enabler in the NHS. For example, increasing spend in mobility and telehealth solutions will enable clinicians to treat patients from their home and community, thereby reducing in-patient hospital time and saving money for the trusts. ICT investments are therefore instrumental to the modernisation of the NHS.
The coalition government must keep the modernisation of the NHS intact if it wants to survive for another five years. Budget cuts and privatisation are not the way forward – not even Margaret Thatcher dared such action. Perhaps this is why she was able to cling to power for so long.
;
Comments