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Health Care

Why Britain's Health Service Needs Urgent Care

Britain needs to either spend more on health care or cut services.

Britain’s National Health Service needs urgent treatment. Cuts to the social services budget mean hospital wards are clogged with people who could probably be cared for at lower cost elsewhere, especially the elderly in need of social care rather than medical treatment. Staff are stretched to the limits. The situation is already critical and the government’s published plans are for real health spending per person over the next three years to be cut.

Britain’s government needs either to fund the NHS properly or cut service provision. Muddling through will end in disaster.

If you visited a major accident and emergency (A&E) department in November, there was a 17.3 percent chance that you were not seen within four hours. That’s up from 4.1 percent in November 2010. When it’s busy, and it can be, there’s a chance you’ll spend the night on a trolley bed in a noisy corridor. There are seasonal ups and downs but the number of people waiting more than four hours to be admitted once that decision has been taken has risen significantly:

The Doctor Won't See You Now

Number of patients waiting more than four hours to be seen after hospital admission

Source: NHS England, Bloomberg Intelligence

As the spouse of an A&E doctor, I hear a lot about why things are getting worse. The list of problems that medical professionals routinely cite include the following big three:

Overcrowding.  There are too few unoccupied beds, leaving little room for a surge in demand, and when that happens, patients get no further than A&E. In part, beds are too full because there is nowhere for patients to go once they are discharged – underfunding of social care is likely to be a significant cause of this.

Too few staff. When a doctor is on holiday or sick, the gap in the roster used to be filled. Now, the gap often remains unplugged, meaning staff who are working are stretched to the limits.

Demand rising faster than resources. The population is expanding, it is getting older and patients are presenting with more complicated problems. Visits to A&E are also up because it is not always easy to see a general practitioner. 

When queried about these problems, government officials often say they are exaggerated or point to added resources. Health Secretary Jeremy Hunt argues that the NHS now has more doctors, nurses and funding than ever before. It’s true that real health spending per person has risen over the past couple of years. But it’s not the only expenditure relevant to the problem. Real spending per person on adult social care -- support for an elderly person with incapacity needs, for example -- has fallen by around 5 percent over the past two years and about 10 percent since 2010.

Mr. Hunt is not alone in calling for spending restraint. Sir Nick Macpherson, former head of the Treasury, has also chipped in, describing the NHS as a bottomless pit.

There is definitely scope for efficiency gains in British health care, but the evidence suggests productivity growth is always likely to lag behind that of other sectors of the economy. Major reforms also cost money, take time to implement and benefit from a more long-term perspective than is usually on offer. In the meantime, the "bottomless pit" Sir Nick describes is getting bigger because the population is growing and ageing and the government is not going to put in enough money to fill it.

In fact, the government plans to cut, not increase, U.K. health-care spending per person adjusted for inflation over the next three years -- by around 0.4 percent each year.

That's a time bomb because the NHS is likely to need more doctors, nurses and funding each year just to maintain the same level of care. Older people use more services -- the average annual spend on those aged between 65 and 79 is almost double what is spent on those aged between 50 and 64. Estimates produced by NHS England suggest that demographic trends are increasing demand for health services by about 1.3 percent a year on average.

That means total U.K. health spending  per person -- of which NHS England accounts for about 80 percent -- adjusted for inflation and ageing is going to be cut by 1.7 percent each year on average between the fiscal years 2017 -2018 and 2019-2020 -- as the chart below illustrates:

Falling Behind

U.K. spending on health care, per person

Source: Office for Budget Responsibility, Bloomberg Intelligence

Unless the NHS experiences a productivity miracle, the growth of spending on health care is likely to fall well short of what’s needed for provision to stand still over the next few years. And more so when other, non-demographic cost pressures such as trends towards diseases that cost more to treat and fast-rising drugs costs are taken into account. The government must confront these problems or the winter crisis in the NHS will become a crisis of all seasons.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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