According to recent statistics, the NHS in England faces a
funding gap within the next two years and this will continue to grow by 2%
unless spending doesn’t increase to a suitable level. In this post, I analyse what
this could mean for the NHS and whether the NHS could save money.
As the government proposes spending cuts to lower the
deficit, the NHS has often been criticised for not meeting targets yet a much
graver issue is its growing cost compared to a slowed rise in spending. Indeed,
provisional figures for 2013-14 show 66 out of 249 trusts finished the year
having overspent, that’s 26.5% of all trusts. As this increases, it places and increasing
burden on the government to increase spending or reduce costs. These are two
strategies that I will address in this post. However, in order to assess where
savings could be made, a detailed look into the structure of the NHS is
required.
Structure of the NHS
Every year, the department of health allocate a budget to
the NHS, this is a limit with which commissioners can commission hospitals and
various healthcare items. The commissioners in the NHS consist of the Clinical
Commissioning Groups (CCGs). These are groups which are made up of health care
professionals, mainly GPs and nurses, but also some members of the public.
Their role is to purchase services in their region and so decide which areas
gain the most investment in the NHS. This is the product of the initial idea of
the government to give money directly to GPs. The advantage that this has is
that it places primary health care in an influential position, with GPs able to
coordinate a portion of NHS investment. This is useful because primary health
care professionals have a much broader view of the issues faced in society e.g.
on average how many people require treatment due to obesity. This means that
they can more easily and efficiently allocate resources to services
specifically tackling obesity for example. This is more beneficial as it
ensures that the amount of spending matches the levels of people diagnosed with
an illness. Thus this creates a utilitarian benefit by allowing the majority of
people to benefit. Adding to this, because spending also determines space and employment
needed, this spending, in effect, has a chain effect as more investment is then
needed elsewhere, thus by investing efficiently, it also allows labour to be
divided up more efficiently which is advantageous considering that this is the
NHS’s biggest cost.
However the issue doesn’t lie within individual parts of the
NHS, but in the relation between them. This is evident when we consider other
bodies such as the clinical senate. This is a group of specialist advisors
which can advise members of the CCG about specific services i.e. how much to
invest in a cardiology unit. Even so, the CCG doesn’t have to listen to this.
This is the first issue that I have found: the clinical senate doesn’t have any
solid influence. Why is this important? It is important because it renders the clinical
senate only partly useful whilst the cons of having it (i.e. the drain on clinician’s
time, the documents required, reports) are still large considering that they
may not even be listened to. Therefore, the first area of change I would
propose is to reduce the size of the senate and develop the same function
higher up in the structure of the NHS. Although it is still required in part to
offer more specific and direct guidance and to increase the efficiency of
decisions, it is not so much needed on a local level.
Instead the clinical senate could be similar to NHS England.
NHS England, oversees CCGs and is responsible for specialist commissioning so
that services on which small numbers of patients rely are widely available and
are not thus ignored by CCGs. This creates a greater unity in the NHS and is
one of the most essential parts in my view. I believe this because it links CCG’s
together and so creates a coordinated healthcare system which is important as
it allows for the centralisation of NHS hospitals and specialist services which
allow them to develop at a greater rate, increasing efficiency by cutting
research costs. This is where the clinical senate ought to be more powerful. Although
I don’t know all the details of NHS England, it would be useful to have a
system of ‘checks’; an example of this would be if NHS England wanted to
commission a cardiology unit in Birmingham specifically for certain patients,
then this should be ‘checked’ by the senate and agreed. There are both advantages
and disadvantages to this. The benefits would be: more effective allocation of
resources in the NHS by ensuring that each area is equally considered and so
this avoids long-term costs such as under developed oncology for example;
greater interaction between specialisms to create a greater unity in
healthcare; a stronger and clearer overseeing body as opposed to the current
structure which uses many different bodies which can make it difficult for the
public to understand. The disadvantage is mainly that this could lead to slower
decision making which could prevent immediate development and action and so
would prevent against a sensitive response to an issue. Also it could cost more
when disagreements occur and a 3rd party has to intervene. In light
of these issues, it may be better to compromise and give the clinical senate
smaller influence yet on a national level. This would mean that this body can
still be ignored yet would far less likely to be ignored as nationally they
have more influence.
On another note, CCGs could be made equal in power to NHS
England, this way NHS England would have to effectively “fight” for resources
towards specialist services. This contrasts with the current system where NHS
England can spend on these services and then give the remainder of money to
CCGs. Even so, this is probably not practical in that it would lead to one
large body deciding where money is spent and so this would inevitably reduce
efficiency because it would prevent the division of labour.
The final area of the NHS that I would like to mention is
the public health section which is mainly comprised of Public Health England
(PHE). This takes a broader look at healthcare issues e.g. tackling antibiotic
resistance. Local governments can now also establish health and wellbeing
boards which combine social and health care. These bodies are more
interconnected than the NHS England – CCG relationship and also consists of a
Health watch which aims to represent the views of patients. The NHS website
says that this is important for the following reasons:
- It increases democratic input
- It strengthens relationships between health and social care
- It encourages integrated commissioning
However, with no direct involvement with CCGs or NHS England,
this branch of the NHS is often criticised for not representing the views of
patients successfully. Therefore, I believe that it cannot viably occupy this
intermediate ground. Instead, this branch of the NHS should be built up or be confined.
This would reduce the waste for example of collecting the views of patients
which are then ignored. Instead, perhaps the public view could be linked to NHS
England which would be more useful as this is the central area of the NHS.
However, people generally do not care as much about regional developments and
generally favour local developments. Hence, we should focus more on linking
CCGs with the public if the public were to become more involved in the NHS.
This could be achieved through a cluster structure around CCGs with more boards
offering advice to CCGs.
Privatisation
Now we move onto whether the NHS should be privatised. Here
I will look at the advantages and then at the disadvantages. The main advantage
of privatisation would be the incentive for profit. This would lead to a
greater focus on cost-cutting and so this would maximise profit. This would
mean that any private investor would focus on increasing efficiency and so this
would therefore lower the cost for governments whilst also offering a
potentially profitable opportunity to investors. Furthermore, competition would
be increased which should lead to the NHS wanting to push its costs down regardless
in order to maintain profitability. Even so, this I don’t believe is significant
because it may lead to monopolisation which could lead to the owner of the NHS
gaining significant barriers of entry to other healthcare providers. This would
allow the NHS to charge significantly higher which may distort the value of the
service and so this would lead to market failure in which people cannot achieve
value for money and so this could lead to exploitation of NHS users.
Alternatively, the monopolisation of the NHS could increase the rate of
research in some areas because the NHS could focus on a specific area of healthcare
and thus allow other firms to develop expertise in other areas. This would lead
to specialisation of healthcare and so this would increase the productivity of
workers because they would have access to higher quality equipment due to the
lack of need for investment in areas which are not profitable. Although this
creates the issue of under providence of healthcare, other private firms could
then explore these gaps and so this would mean that resources can more
efficiently be used.
In contrast, the privatisation of the NHS is not, in my
view, a solution as hospitals in remote regions would be at risk of closing
down due to the high cost associated with running hospitals in these areas, for
little revenue. Hence this would probably lead to the greater centralisation of
healthcare which, in my first post, I discussed was not necessarily a suitable
policy for healthcare anymore due to our ageing demographic. Also, some
healthcare professionals have suggested that it would lead to “dangerous
fragmentation of health services”. This is because hospitals may no longer be
unified under the goal of providing patient care. This would mean that patient
records and other patient specific documents for patients requiring longer term
care, or care in different regions, may not be easily transferred and so this
means that it could slow the process and create a more disjointed health
service which would not offer increases in quality of care. Thus the advantage
of greater research would probably be balanced and so is not important. This
fragmentation is also significant as it would create wider divisions between
primary health care and secondary health care which would reduce our
understanding of illness and so lead to conflicts within the medical
profession.
Furthermore, the short-term costs associated with
privatisation would be immense. Particularly with healthcare as extensive regulatory
bodies would be required, health and social boards will be most likely scrapped
because they offer no profit importance, hence the overall health of the
population may decline in this changeover period. This is important to consider
as due to the elaborate structure of the NHS (as previously discussed) any
changeover may also create transparency issues and so this would further
increase the costs to the government. Nevertheless, these costs would be
unlikely to exceed current costs. However the whole reason of privatisation
would be to reduce costs and achieve economic growth, therefore any monetary
cost associated with the changeover should be scrutinised. Finally, any
privatisation or charging for treatment would lead to a system based on wealth,
increasing divisions and preventing poorer workers from accessing healthcare.
Hence this could have a long-term impact as these are generally the workers who
need it the most and so if access is reduced then poorer members of society may
suffer disease, resulting in more days off work. It is clear that this would
have long-term implications. Thus I don’t believe that privatisation would
benefit the NHS and I would recommend against it.
Saving the NHS
If then the NHS should remain at the will of the taxpayer,
it is clear changes will need to be made. I have dealt with structural changes
yet I haven’t focused yet on what general changes could be made to save money.
The graph to the left shows the key areas that could be tackled, despite it being dated. Waiting time targets are among the areas which could be changed. A&E
targets could be reduced to pressure doctors and clinicians to treat patients
faster and more efficiently which would free up more time and so reduce labour
costs which are, as shown by the graph, a specific concern. However this is not
practical in that we are already struggling with waiting times and any further
pressure may not have any effect on reality but instead may only lower the
quality of healthcare and also portray the NHS as even further away from its ‘targets’
which would create a negative public view.
Alternatively, the NHS could reduce its recruiting costs by
minimising the number of organisations and integrating some organisations so
that separate premises are not required. This could similarly be achieved by
merging some jobs together e.g. allowing data analysts to perform another job
as well. This would be beneficial as due to the large size of the NHS
workforce, if each worker did more hours, then this would account for masses of
gained productivity time for a relatively little sacrifice by individuals. In
addition, cutting management staff would help to minimise labour costs by
reducing the need for unnecessary directors. Hence this would allow the NHS to
continue to function whilst avoiding an opportunity cost. However, this is very
much an older policy and in the new NHS structure there are fewer managerial positions
and so any cutting would be unlikely to have a significant effect. Instead the
quality of mangers should be raised. This could be achieved by employing
economists within the NHS which would allow a more efficiency based approach to
health care and may offer another perspective. Whilst this is not likely to
solve the ever growing costs (mainly because these are caused by longer
lifespans and health needs), it may slow the rate at which they rise, allowing
spending to “keep up”.
Another area of concern is NICE which is responsible for
introducing clinical guidelines and now has developed a role in social care as
well. One way of limiting the growth, and hence costs, of this area of the NHS
is to cut guidelines. This would save money yet would likely cause malpractice to
rise hence compensating for any saving and also putting patients at risk: a
worse situation. Instead guidelines should be simplified and made more
encompassing to reflect the needs of patients, whilst also allowing clinicians
to understand, act on and be held accountable to these guidelines even though
there may be fewer. This simplification is the most viable way of controlling
the growing cost of NICE and would offer long-term benefits by allowing clinicians
to use judgement as well hence helping to give clinicians flexibility.
Reduction in the cost of medication could also be
implemented by increasing medical reviews to ensure that the amount of prescriptions,
which are not necessarily needed, are reduced. This would increase the
efficiency with which the NHS uses medicines. This is of specific importance as
recently in the news, there was a conflict when a drugs company, which wanted
to sell a cancer treatment, chose to sell at a high price. This means that by
conserving these expensive medicines, important savings could be made.
Finally preventative medicine is probably the most important
area where savings could be made. For example, an increase in the power of the
PHE would allow more aggressive health promotion which could be combined with
taxes and laws. This would increase the awareness of health issues such as
diabetes and so would reduce the amount of people diagnosed with these
illnesses because people take early prevention methods. Hence this would have a
significant benefit and would not be so controversial. This would offer a clear
and secure benefit to the NHS and hence limit the amount spent treating these
illnesses.
My Verdict
Overall health service productivity has fallen by up to 8%
since 1995 and something needs to change. Yet whilst changes are needed, it is
vitally important that spending on the NHS increase. Where this money should
come from is a mystery yet I would consider cutting areas such as foreign aid.
This should suffice until taxes rise in the future as the economy recovers
offering more time for change which should firstly be on increasing efficiency
as opposed to structural change because any change in structure may undermine
confidence in the new NHS.
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