A new report about the future of the NHS is issued today.
It tells us that the NHS will face a £30 billion shortfall by 2020 if it does not change. The report identifies savings of £22 billion that it says can be achieved by new ways of working, leaving a shortfall of £8 billion that will be needed in additional spending. The report does not make this clear, but I would assume that means a “real terms” increase of £8 billion, over and above inflation increases.
I don’t want to be too negative about the NHS. It has many good features, and of course many thousands of well trained and devoted front line staff.
But consider this: Labour, when they were in power, doubled spending on the NHS. When they first came to power, the NHS had been cash-strapped for years. Indeed, people came from other countries to see how we could provide our healthcare so cheaply. Labour therefore set about remedying that. They pumped money into the NHS in huge quantities, and over their time in office, spending on it doubled. I believe that most British people supported that.
What we saw though was the NHS becoming much less efficient. Even Labour themselves have acknowledged that much of the extra money was swallowed up by “the system”. Sure, services did improve. They certainly did not become twice as good though. The money shortage was removed, and the only remaining issues really were internal to the NHS.
Here we have this report, claiming that yet more extra money is needed. I am not convinced. NHS spending does need to be kept up. Demands on the service are rising due to the ageing population and higher expectations from patients, and those pressures will I am sure eat up any efficiency savings that can be achieved.
Any organisation though should be continuously finding ways to improve. Private businesses do that all the time, or they go out of business. The NHS needs to do that too – and that is the £22 billion the reports talks about I suppose.
But do they really need that extra £8 billion on top? Frankly, I do not believe it.
Just three months ago we had the Nuffield Trust warning that
another £2 billion a year may be needed to keep pace with demand.
£2 billion, £8 billion, £30 billion… name a figure. They just want more cash.
The BBC report unwittingly gives us a glimpse of what the problem is here:
The report – produced by NHS England, Public Health England, the regulator Monitor, the NHS Trust Development Authority, Care Quality Commission and Health Education England…
That is the NHS in a nutshell. Lots of overlapping bureaucratic bodies, with unclear remits, all trying to work together. I bet there had to be a large number of committee meetings between all those bodies to produce this report!
All those organisations have chief executives, personnel departments, finance people, office buildings, car fleets with maintenance budgets, glossy strategy documents and annual reports and the rest.
How have we ended up here?
The NHS started life in the 1940s as a monolithic hierarchical organisation. That did have disadvantages, notably the lack of incentive to improve over time. But it had one key advantage: it eliminated the waste that is inherent in competition, and it made responsibilities very clear. It also enabled the government to mandate a certain standard of healthcare, which was then delivered relatively uniformly around the country.
Over time, the disadvantages of this approach began to weigh heavily. NHS efficiency began to fall, at the same time as demands rose inexorably.
Margaret Thatcher’s Tories wanted to cut public spending. The NHS was a large component, and it was clear that there were efficiency savings to be had. But how to deliver them? They began the process of introducing the NHS Internal Market. That was an attempt to introduce the pressures to improve that come from a free market, without removing the “free” healthcare delivery.
Tony Blair’s Labour party hated that idea – the word “market” was anathema to them. I remember during the 1979 election campaign Tony Blair saying in a speech:
The NHS is not a supermarket! It is a public service.
On coming to power, Labour swept away the internal market. There would not be competition between hospitals to provide operations for example. But they kept what they called the “purchaser-provider split”. We ended up with “commissioning bodies” buying services from monopoly providers, and all within the same NHS organisation – overseen by regulators, strategy bodies and the Department of Health.
In other words, Labour made the deliberate decision to abolish the market and all its advantages, but to keep all the disadvantages of a market. I suspect that was because they never really understood what a free market was, or what the NHS internal market was designed to achieve.
Be that as it may, the result is the dog’s dinner that we now have. The NHS is completely fragmented in its organisation – and yet also still a monopoly without competition, internal or external.
Yes, it certainly does need “new ways of working”. There is a problem though: the NHS is run by the same bureaucrats half of whom need to be swept away.
I wrote a long time ago on this blog that Andrew Lansley’s NHS reorganisation was the last chance to save the NHS. That reorganisation was designed to put GPs clearly in the driving seat, and introduce competition between health providers for the GPs’ business. It was an amended version of that original Tory “NHS internal market”.
Unfortunately, Andrew Lansley did not have the sheer nastiness that was needed to drive the changes through in the way that was intended. The reorganisation was hijacked by the bureaucrats. Most of the people who used to run the old bureaucratic bodies invented new ones and put themselves in to run those new bodies.
The CCG’s (which were originally intended to be autonomous groups of GPs) have ended up looking remarkably like the old Primary Care Trusts that they replaced. Bodies like NHS England exist to “oversee” them. And NHS England acts a lot like the old Health Authorities. Far from GPs being in the driving seat, those centralised bodies commission GP services, and are in control.
In short, nothing has changed. The NHS is now beyond repair – and we are hearing ominous rumblings about private companies coming in to provide healthcare in Britain. Under the TTIP proposals being discussed by the EU with the United States, many of those private companies may be American.
There is one other way forward that is still open to us. We could localise the NHS, driving management responsibility down to local level. County Councils are steadily losing their responsibility for education, but they already exist as democratic bodies with considerable capability to deliver services. They are already taking on responsibilities for public health, and as that beds in, the need for national strategy bodies like Public Health England will be increasingly questioned.
Why not, over time, give County Councils responsibility for actual healthcare delivery too?
That is (roughly) what UKIP have proposed, with their elected local health boards. I think it is likely to become the new consensus on healthcare, as few in Britain have the apetite for moving to an American-style private healthcare system. There is now no alternative, in truth.
As in so many things, UKIP are blazing a trail that others will follow in coming years.
There is one caveat: we have to stop all the nonsense about “postcode lotteries”. Locally managed health services means health services that are different in different places. You might as well bemoan the “postcode lottery” in food distribution that means there is a larger range of food on sale in London than there is in a typical market town. A locally-managed health service means that the service available will differ from place to place. That is as it should be, after all, because the services that are needed differ from place to place.
The prize of this new type of NHS would be that the NHS would actually be accountable to the people whom it serves. And about time too.