The NHS has been widely regarded as one of the most efficient healthcare systems in the developed world. For example, a study comparing the healthcare systems of 11 countries between 2011 and 2013 found that the NHS scored highest on quality, access and efficiency (http://www.nhsconfed.org/resources/2014/07/uk-nhs-named-best-healthcare-system-by-the-commonwealth-fund).
But by the end of 2016 the picture had become very different. Now, good access to services and the quality of care are at risk, not because of mismanagement on the part of NHS organisations but because of insufficient funding of the NHS (https://www.kingsfund.org.uk/sites/files/kf/field/field_publication_file/Deficits_in_the_NHS_Kings_Fund_July_2016_1.pdf): we are experiencing the biggest sustained fall in NHS spending in any period since 1951. Once adjusted for inflation, spending on the NHS in England has been increasing by only 0.9% a year (on average) – well below the 3.7% growth rate that the UK health service has been used to in the past. But even worse, once inflation that is specific to the NHS is taken into account, the real increase in funding is just 0.2% per year (https://www.rcplondon.ac.uk/guidelines-policy/underfunded-underdoctored-overstretched-nhs-2016). Although the UK is the 5th largest economy in the world, we spend much less on healthcare than other countries like France or Germany.
At the same time that funding is getting tighter, the NHS has to cope with:
- An increased need for services – for example, as a result of increased incidence of obesity and diabetes. A Kings Fund report finds that the main cause of theNHS deficit is the fact that funding has not kept pace with the increased need for services. https://www.kingsfund.org.uk/sites/files/kf/field/field_publication_file/Deficits_in_the_NHS_Kings_Fund_July_2016_1.pdf ;
- A 4% increase in the costs of new medical treatments (as well as the scurrilous practice of some drug companies: for example, in 2016 the pharmaceutical company Actavis UK was found to have raised its prices for hydrocortisone tablets by more than 12,00% when it upped the price paid by the NHS from 77p a pack in 2008 to £88 by March 2016 (see http://www.newsjs.com/url.php?p=http://uk.reuters.com/article/uk-allergan-prices-idUKKBN1450US).
- A £4.6 billion reduction in local authority social care budgets since 2011 (a net budget cut of 31%), which has knock-on effects for the NHS – such as increased use of A&E and hospital services (https://www.theguardian.com/society/2016/jul/13/vulnerable-adult-social-care-risk-england-councils-face-1bn-shortfall).
- The annual transfer of NHS funds to the Better Care Fund (£3.8 billion from 2015). This Fund was set up to support the integration of health and social care, largely by cutting hospital care for those who are chronically ill and the frail elderly and replacing it with supposedly cheaper care in the community;
- The claw back of money from the Department of Health by the Treasury (for example, nearly £3 billion for the two-year period 2010-12) (https://www.hsj.co.uk/topics/finance-and-efficiency/exclusive-nearly-3bn-returned-to-treasury/5051242.article);
- The annually recurring costs of running the NHS as a market (at least £4.5 billion p.a.) following the Health and Social Care Act of 2012 (https://chpi.org.uk/wp-content/uploads/2014/02/At-what-cost-paying-the-price-for-the-market-in-the-English-NHS-by-Calum-Paton.pdf)
- The huge cost of Private Finance Initiative repayments on debt owed by NHS trusts and Foundation trusts following the end of government lending for capital projects such as new hospital buildings. It’s been estimated that the NHS is spending more than £3,700 every minute to pay for privately financed hospitals (http://www.telegraph.co.uk/news/nhs/11748960/The-PFI-hospitals-costing-NHS-2bn-every-year.html);
- A cut of £200 million in Local Authority public health budgets which fund many services such as school nursing, screening programmes, and smoking cessation programmes – despite recognition by the boss of NHS England of the need for “a radical upgrade in prevention and public health”. This cut will not only affect preventative and public health services but will also have a serious knock on effect on NHS healthcare services.( http://www.hsj.co.uk/news/osborne-announces-200m-cut-to-public-health-budgets/5086553.article);
- A cut in the money paid by the government to NHS providers for their work under the Payment by Results system from 2010/11. Over three-quarters of each hospital’s funding has come from this system through which hospitals are paid per treatment, according to prices set by a tariff. In recent years, payments have been cut by over 40% for a quarter of the treatments that hospitals provide (https://www.opendemocracy.net/ournhs/matt-dykes/death-by-thousand-tariff-cuts). So, for example, a hospital providing routine knee surgery would have been paid £3,077 for each procedure in 2009/10, but by 2013/14, the hospital would have received £1,673 for the same procedure.
Cuts to tariff payments made up nearly half of the £20 billion ‘efficacy savings’ that the NHS was told to achieve by 2015 under the ‘Nicholson Challenge’, dreamed up by the last Labour government and included in the NHS funding settlement agreed by the Coalition Government when it came to power.
- An unpublicised cut to the NHS repairs budget. This capital budget, used to fund maintenance and replace out-of-date or broken equipment, was slashed by £1.1bn in George Osborne’s 2016 Budget. http://www.independent.co.uk/news/uk/politics/budget-2016-george-osborne-cuts-11bn-from-nhs-repairs-fund-a6942301.html