The NHS often runs into trouble in winter, but things have never looked quite this bad. What's gone wrong? Simon Wilson reports.
Isn't there a crisis every year?
Indeed. This year, however, the turmoil is of a different order: 27 December was the busiest day in the service's history. Bed occupancy rates are the highest they have ever been at this stage of the year. Some 66 hospital trusts have issued emergency alerts over the winter.
The number of elderly patients waiting on trolleys has trebled, and waiting times in A&E have jumped dramatically. The Red Cross ramped up the political temperature by describing the situation as a "humanitarian disaster". And then the chief of NHS England, Simon Stevens, flatly contradicted Theresa May's assertion that the NHS had in fact received more money than it asked for.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
What's going on?
Much of the comment on the "winter crisis" in the NHS identifies the issue of "bed blocking" as a key challenge: deep cuts to social care mean that more people remain in hospital longer than they need to because there's nowhere for them to go. That causes a ripple effect through the system that ends up with ambulance crews queuing in corridors for hours to get their patients into A&E.
People making unnecessary trips to A&E aren't helping. The underlying cause of the health service's complex woes, though, is relatively straightforward. Demand is soaring (by up to 5% a year), and so are costs (inflation in the NHS is around 7%, in part due to costly new medical advances). But funding has not kept pace.
Why is demand soaring?
The UK population is growing unusually fast compared with other rich nations, and we are also crucially ageing remarkably quickly. In 2015 there were more than three times as many people aged over 85 than there were just 25 years earlier. This boosts demand for two very costly types of healthcare. The first is looking after the terminally ill: about 25% of all hospital inpatient spending is on a patient's last three months, according to data cited by The Economist.
The second is looking after people with more than one chronic condition about 70% of all NHS spending is on long-term illnesses. More than half of over-70s have at least two such conditions.
But isn't funding increasing?
The government rightly insists that NHS funding is still rising in real terms. But as a share of national income it is falling, and remains far lower than in comparable European countries (30% lower, per person, than Germany, for example). Spending has grown by an annual real average of 3.9% a year since the NHS was created in 1948. In the current decade (2010/2011-2020/2021), however, projected annual growth in spending will be just 0.9%. In the 2000s, when Labour began pumping money into healthcare the bulk of it into wage bills spending per patient soared by 70%.
In the present decade, it will scarcely budge. No other rich European country is going through a similarly rapid deceleration in funding, says the Health Foundation think tank. As a share of GDP, the UK's spending on health was 7.3% (£134bn) last year, lower than most similar countries. It is projected to fall to 6.6% by 2021. If demand grows in line with NHS forecasts (and ignoring any efficiency savings), the NHS faces a shortfall in annual funding of about £20bn by 2020-2021.
Does the NHS do a good job?
It's very good at some things. The NHS in England vaccinates more people against flu and screens more women for cancers than comparable countries, for example. But it compares badly on crucial international benchmarks such as survival rates from cancers, strokes and heart attacks.
There are several international studies suggesting that the NHS is relatively efficient compared with its European counterparts, but that overall its outcomes are worse. Even the one study often cited by defenders of its performance (a 2014 study by the Commonwealth Fund) found that its main relative weakness was "its poor record of keeping people alive" not a minor concern for a health service.
What will happen next?
Maybe nothing. If the government decides that the current situation is politically tolerable, then the NHS may well be set for a period of decline in which it's just about managing, with services deteriorating and the wealthiest patients bleeding off into the private sector. Alternatively, the government may opt for more funding, whether in the form of general taxation, a hypothecated health tax, or co-payments such as charging those who can afford to pay for GP visits (in the same way that NHS dentists have been charging for treatment since 1952).
A radical route would be to move to a social insurance model like those in Germany and the Netherlands. Private providers operate under strict government regulation, and everyone is obliged to buy health insurance, with the state covering those who can't afford it.
-
Barclays bank caps in-branch cash deposits for personal banking customersNews Barclays has placed a cap on how much you can pay into your bank with cash in a bid to fight financial crime - will you be affected?
-
State pension warning as families opting out of child benefit hits record highUp to one million parents could be losing out on £6,500 in retirement because they have opted out of receiving child benefit.
