Category Archives: NHS Funding

How Badly Is The NHS Underfunded?

So the story of NHS underfunding has finally made it back into the mainstream media. It’s not like NHSpace haven’t done our bit since we were founded in 2014:

  • “Simon Stevens of NHS England will shortly be unveiling an NHS roadmap […] Looming large is the matter of the claimed £30bn funding gap, an artefact of the Tory policy to stagnate NHS funding rather than commit to real-terms growth.” – NHS England And The £30bn Funding Gap, October 2014.
  • “David Nicholson and Simon Stevens have both used their time as NHS England CEO to implement austerity measures, leading to a cumulative shortfall in funding of at least £35bn per year by 2020” – 5 Things You Should Know About STP, August 2016.

But how much money would be needed to resume normal service?

With the NHS being asked to save tens of billions each year, it’s a miracle that hospitals are only in approximately £3bn of debt right now. The ‘Nicholson challenge‘ from 2010 to 2015 demanded efficiency savings of £20bn. The ‘Stevens Challenge’ (the STPs and Five Year Forward View) is asking for another £22bn. Some of these savings come from cutting beds and staffing, resulting in the increased waiting times, rationing of care, and missed targets that we are increasingly seeing.

But some hospital execs aren’t happy making such swingeing cuts. There came a point where the cuts would go too far and lives would be at risk. This wasn’t palatable, so instead of making further cuts, those execs chose to run a deficit and put their trusts into debt. This graph shows just how common this practice has now become:

_88338474_nhs_deficit_624

Let’s assume from this graph that 2012/13 was the year that the NHS couldn’t take any more cuts. It’s also the year that the Health & Social Care Act was enacted. If we take the funding from 2012/13 (102bn for NHS England) and apply ‘NHS inflation’ of 4%, then this year’s funding should be £120bn just for the NHS to scrape by. For comparison, the 2016/17 budget is £105bn. So the NHS is currently about £15bn behind, increasing to a gap of around £35bn in 2020/21 if the government continue with their current plans.

The good news is that our NHS is truly a budget service right now, and we can afford to increase our spending.  If we were to catch up with the French, Germans, Canadians, Swiss, Japanese, etc, we’d spend about £35bn more on the NHS. The bad news is that the government, be it through ideology or deliberate maleficence, are refusing to spend that much. The great irony is that increased NHS spending would actually stimulate the economy, helping us get out of the austerity rut. We can only hope that the political choice to underfund the NHS will be overturned now that more and more professionals are speaking up.

Newspeak and the NHS

NHSpace is fed up with the various catchphrases used by the government and the media to spin stories about the NHS. Here are our top five, handily debunked and translated.

1 – Excessive demand / high bed usage

The NHS has seen a steady reduction in the number of inpatient beds, whereas the population has steadily risen and social care needs upon discharge have increased.

The overall number of ‘finished admission episodes‘ has increased by 2-3% each year, in a reasonably predictable manner. The same goes for emergency admissions, and the recently reported ‘unprecedented increase’ in emergencies is again only a 3% rise.

When the government say that hospitals are under strain from unprecedented demand, they actually mean unprecedented bed reductions and a lack of social care. If social care was properly funded then many patients could be discharged from hospital in a more timely fashion. And rather than year-on-year cuts, bed numbers need to at least increase in line with the population (around 1% each year).

2 – Overspending / hospitals in debt

The NHS budget has fallen in recent years, in real terms. We also spend less per head of population on healthcare than many other westernised countries. It should be clear that hospitals aren’t overspending, but are actually spending less than they should on their patients, all thanks to significant underfunding.

But the story goes further than that. To whom are the hospitals in debt? “The government had to lend cash-strapped hospitals a record £2.825bn in the last financial year” the Guardian reported in July this year. So state-funded hospitals are in debt to the state. Regardless of the fact that hospitals are being turned into independent businesses, they are still really underfunded rather than being in debt.

3 – No money left

The UK government cannot actually run out of money per se. If they spend too much and don’t apply enough taxation, then inflation will rise, but an increase in NHS funding doesn’t have to mean an immediate ‘NHS tax’. (Government spending is a matter of macroeconomics, and isn’t like a household budget.) The government could choose to provide an additional investment in our NHS in order to bring NHS funding in line with our European neighbours.

Every additional £1 spent on the NHS would boost the economy by £3 by supporting jobs and keeping people healthy. That means a £30bn injection of funding, which would represent a 3.8% of GDP increase in state spending, could increase the UK’s GDP by 4.4%. And this is nothing compared to what the King’s Fund think we could support. Their analysis suggests that, in the next few decades, the NHS could be funded to a much greater extent and still be affordable.

So far from there being no money left, the government could invest in the NHS and reap the economic rewards. Instead there is a political choice not to spend.

4 – 7 day NHS / weekend effect

The NHS is already open on weekends, and most specialties have consultants on-call and doctors on-site 24/7.

Hunt’s 7-day NHS is actually part of a top-down reform, pushed upon doctors at a time when government-enforced cuts mean that the NHS is already stretched too far. Forcing staff to work longer hours whilst using STP hospital closure plans to close departments isn’t safe, so Hunt needed a stick to beat them with.

This is where the weekend effect came in. A study commissioned by Hunt’s department, interpreted wrongly by Hunt, and quoted in press releases before it was even published, was used to attack doctors for working safe hours. How dare they only work one-in-four weekends when Hunt had proof that patients were coming to harm? But, as academics have revealed, Hunt’s weekend effect was based on flawed data and a downright flawed interpretation.

With his weekend effect rubbished, Hunt is now trying to make the conversation about doctors’ salaries, when in fact it’s about overstretching an understaffed service.

5 – Sustainability and Transformation

The Sustainability and Transformation Plans are supposedly about creating a modernised NHS. In reality, sustainability actually means financial restrictions and transformation means enforced closures and outsourcing. Any NHS organisation failing to follow the STPs will be denied what little new funding there is to be had, and will face a ‘failure regime’.

The end game here is for the government to whittle the NHS down into an basics-only service with a few large hospitals offering emergency and major illness care only. A two tier system will emerge, where a significant amount of routine care will be available privately and not funded by the NHS.

Why Are Doctors Striking Again?

The BMA are planning a further series of walkouts, this time stretching to five consecutive walkouts each month (8am-5pm). But why are doctors still unhappy? NHSpace looks at some if the reasons.

1 – The contract still isn’t fair

There are some serious problems with the contract that Hunt is imposing, including poor treatment of pregnant women and parents who work part-time. The latest version of the contract pretends to fix these, but the fix is time-limited so that future doctors will suffer. Hunt is treating the contract like a broadband contract, offering a good deal initially but a bad one in the long run. Doctors care about their future colleagues and aren’t about to sell them out.

2 – The government is slashing the NHS

Groups such as the NHA have been aware of the STP hospital closure plans for several months. Now that these ‘secret plans’ are finally being reported in the media, you can be certain that every doctor is aware of the latest hatchet job being performed on the NHS. The idea that Hunt could achieve a ‘truly 7 day NHS’ with no additional funds was nonsensical; expecting it to happen in the midst of massive service cuts is utterly ridiculous.

3 – Whistleblowers are still being punished

The Chris Day case highlighted the fact that doctors in training posts has no whistleblowing protection and could lose their careers just for speaking up. The BMA has made some headway by asking Health Education England to acknowledge their duty as a de facto employer, but you can expect doctors to push for a cast iron commitment to whistleblower protection.

4 – The government are privatising the NHS 

The STP hospital closure plans will create huge gaps in England’s healthcare system; gaps which the private health companies will be happy to fill, for a fee. Healthcare is already being rationed (ask anyone applying for routine surgery that requires ‘funding approval’), but the STPs will take us to the point where co-payments and top-up health insurance become the norm. This isn’t what today’s doctors signed up for.

Read more about privatisation: 5 Forms Of NHS Privatisation You Should Know About.

5 – Jeremy Hunt was reinstated

By inviting Jeremy Hunt to continue as Health Secretary, Theresa May has shown a lack of respect for medical professionals. But in all honesty, Hunt is just a figurehead. The gradual sell-off of the NHS and mistreatment of its workforce is a core Conservative policy, both due to the party’s ideology and their ties with corporate party donors, many of whom own shares in private healthcare. Doctors will express their anger at Hunt, but of course the problem goes much deeper.

5 Things You Should Know About STP

The Sustainability and Transformation Plans have divided the NHS in England into 44 local areas, and each has been told to cut services as part of a nationwide ‘financial reset’. But what’s actually going on, and how much of the government’s reasoning is just spin? NHSpace brings you a handy myth-busting guide.

1 – NHS Trusts aren’t overspending

The narrative of STPs is that our hospitals are in debt due to overspending. That would be true if the government had matched the NHS budget to the actual healthcare needs of our country, but they haven’t.

The cost of healthcare increases by 4% each year. In the UK, this is referred to as ‘NHS inflation’. If NHS funding doesn’t keep pace with this inflation, then services have to be cut or closed.

David Nicholson and Simon Stevens have both used their time as NHS England CEO to implement austerity measures, leading to a cumulative shortfall in funding of at least £35bn per year by 2020:

Year Increase Needed Actual Increase Shortfall
2010-2015  £20bn  £7bn  £13bn
2015-2020  £30bn  £8bn  £22bn
Total (2010-2020)  £50bn  £15bn  £35bn

The NHS is underfunded, and is actually spending less than it should on healthcare. That’s quite the opposite of an ‘overspend’!

2 – The NHS isn’t unaffordable

Pundits love to tell us about the new challenges facing the NHS, claiming that we now cannot afford universal healthcare. We are told that hospitals are overspending and that they are in debt.

In fact, the NHS is extremely affordable. Here’s a list of healthcare spending in several westernised countries in 2014:

Country Per person ($) % of GDP
Belgium 4,884 10.6
Canada 5,291 10.4
France 4,959 11.5
Germany 5,410 11.3
Holland 5,693 10.9
United Kingdom 3,935 9.1
USA 9,402 17.1

As the table shows, the UK could easily choose to dedicate an extra percent of its GDP to healthcare, providing the NHS with the funds needed to sustain a modern health service.

3 – Hospitals aren’t overstaffed

The ‘financial reset’ planned for the NHS includes a limit on staff recruitment, the implication being that hospitals need to cut back on excessive hiring of permanent staff. Considering the billions spent on hiring agency staff to fill rota gaps, this is certainly not true.

The underlying issue here is safety. Following the Francis Report into the Mid Staffs scandal, hospital managers decided that they would rather exceed their budgets and hire more staff, than be guilty of manslaughter. Fed up with being ignored, the DoH is now coming down on managers with an iron fist. Anyone caught protecting staffing levels by overspending will be subject to a ‘failure regime’.

4 – This Isn’t About Centralisation 

Centralisation of specialised services can improve outcomes for patients with specific illnesses. But trauma, cardiac and stroke services have already become centralised. For many other illnesses, and for maternity and step-down care, it’s important to have smaller District General Hospitals (DGHs) and Community Hospitals. These provide care closer to home and take the pressure off the big, specialised centres.

So don’t be fooled. Closing A&Es and taking services away from local hospitals isn’t centralisation. It’s un-evidenced vandalism in the name of cost savings.

5 – This Is About Creating A Two Tier System

The level of cuts and closures required by the STPs is such that the NHS will become unable to provide a universal service. Rationing will increase, so that most routine procedures will be refused funding. Once various DGHs have closed, the hospitals still standing will struggle with their increased catchment areas and will be forced to provide essentials only.

This was already envisaged by Simon Stevens, who is keen to separate emergency care from routine care. Emergencies will be handled in NHS hospitals, whilst the routine work will be handled by the private sector. Patients wishing to undergo non-essential procedures will find themselves needing to pay to have their cataracts and hernias treated or their tonsils removed.

NHS Funding: The Price Isn’t Right

Here’s an excerpt from an excellent piece on NHS funding by Jonathan Allsopp:

In the midst of the most important election ever for the future of our NHS, the poverty of the debate about the funding of the health service is, at times, astonishing. Too often the NHS is described as “unaffordable” when it was perfectly affordable amidst the ruins of the second world war. Not for the first time there are calls for charging for some NHS services such as GP visits or A&E attendances yet there is barely a mention of the billions spent on propping up the “internal market”.

A 2014 report by the Centre for Health and the Public Interest (CHPI) estimated that the costs of the internal market (with its need for contracts, billing, costing, activity data, computer systems, legal advice etc) at a conservative £5 billion per year. A more likely figure of £10 billion has been suggested by the National Health Action Party.

And this ignores the one-off costs associated with repeated reorganisation and restructuring. The bill for implementing the Health and Social Care Act of 2012 is estimated at more than £3 billion. These are staggering sums of money (as much as 10% of the total NHS budget) that are barely mentioned in any debate around the affordability of the NHS.

You can read the full article on the SHA blog.

5 Reasons We Can’t Trust The Tories’ Latest NHS Pledge

Dr Louise Irvine, candidate for South West Surrey standing against Health Secretary Jeremy Hunt, tells us why we cannot trust the Conservative Party’s latest NHS pledge:

1 – It’s too woolly

The Tory chancellor George Osborne has pledged “a minimum real-terms increase in NHS funding of £8bn in the next five years”. NHS England CEO Simon Stevens has asked for an increase in funding of £8bn per year by 2020. Given that the National Audit Office had to call out the Tories on claims of ‘real terms growth’ previously, it’s not unfair to suspect the Tories of being deliberately woolly with their wording.

2 – It’s unfunded

This morning ​Jeremy Hunt told the Today Programme the NHS will be funded by “economic confidence”. ​This would be laughable if it weren’t so serious. The Tories want us to look at their record and trust them. This from the party that promised no more top-down reorganisations – and then launched a top-down reorganisation so big it could be seen from ‘outer space’ (words of ex NHS boss David Nicholson). They are unable to tell us where the £12bn welfare spending axe will fall, and now they can’t tell us where the £8bn NHS money will come from either.

3 – It’s unpredictable

The Tories have thus resorted to their mantra: “a strong NHS relies on a strong economy”. So if they fail to deliver a strong economy, where does that leave the NHS? If continuing Tory cuts and austerity measures lead us into so-called “stagflation”, will we just have to cope with a weak economy and a weak NHS?

4 – It’s not enough

Even if the Tories manage to provide £8bn per year by 2020, it won’t be enough. To meet a predicted NHS funding gap of £30bn, the Simon Stevens plan relies on a further £22bn of efficiency savings. That’s 2-3% of the NHS budget saved each year, and is just not feasible.

Firstly, the NHS has already been cut to the bone with the previous £20bn round of savings. Emergency services, general practice and mental health are at breaking point, targets are being missed for routine operations and cancer treatment, thousands of hospital beds axes and scores of A&E departments, maternity units, walk-in centres and ambulance stations have been closed down.

Secondly ability of the NHS to make efficiency savings is “substantially below” previous estimates, averaging at just 0.4% a year over this parliament. This means the scale of efficiency savings needed is genuinely not possible.

5 – It’s spin

First there was that pledge of “no top-down reorganisation of the NHS”. Later, the Tories made claims of protecting and increasing NHS funding. This is pure spin. In real terms, once you take into account inflation, our increasing and ageing population, the cost of new drugs, and lifestyle factors, the Tories have actually cut NHS funding. Plus there are massive knock-on effects on the NHS from savage social care cuts due to the Tory axing of local authority funding.​ The Tories tell us they’ve increased doctors and nurses but there’s actually been a fall in real terms when you take into account the population increase.

#HuntMustGo

Jeremy Hunt: ‘I took my children to A&E because I didn’t want to wait for GP appointment’

That just about says it all, doesn’t it. The Health Secretary himself has no confidence in the health system that he is supposed to be ‘promoting’. Thanks to the Health & Social Care Act 2012, Hunt is no longer required to actually ‘provide’ an NHS, but he could at least avoid doing what Ben Goldacre has called “without question the most stupid, insight-less and irresponsible thing I have ever seen from a health minister“.

The wonderful author of Bad Science and Bad Pharma, Goldacre continues “In saying this, Jeremy Hunt is encouraging overload to pretty much the most expensive place to deliver primary care. If this is part of a strategy I’d like to know what that is. It truly reads like an uninformed dinner party outburst.

Not only has the hypocritical Hunt previously told the public that they must avoid A&Es in all but the most urgent cases; he is also dragging his feet on the publication of the latest A&E figures – figures that may well be truly damning for his party. Perhaps Hunt is hoping to drag attention away from his government’s record of cuts and closures in the name of ‘efficiency’ and instead try to shift the blame to underfunded primary care services.

We’ve seen #CameronMustGo trending on Twitter. It’s starting to become pretty clear that #HuntMustGo, too.