3 January 2018

The NHS has an illness that money cannot cure


An ill-fated and short-lived New Year’s resolution to take up running resulted in a trip to my local A&E last January. In the waiting area I was surrounded by people who were in far worse shape than me with my twisted ankle and a bruised ego who also had to wait for hours to receive treatment.

My story will be familiar to many readers who have waited for hours in A&E or experienced the frustration of trying to get an appointment with their GP. Moreover, there is the inconvenience of operations being cancelled and the distress caused to patients and their families by the long wait to receive specialist treatment for mental health conditions.

Every January, the febrile reports of a healthcare system close to breaking point that we read year round grow more intense. Social media, news stations, and newspapers are filled with stories about NHS staff working in “third world conditions” with patients left waiting for hours.

It is happening again. Today we have learnt that tens of thousands of non-urgent NHS operations and procedures in England may be deferred until January 31, due to winter pressures.

According to the pundits on the news and social media, the reason why the NHS is in such a sorry state is due to cuts to funding. The solution is therefore simple: more money. Increased funding has been seen by politicians and commentators from all sides as a panacea to cure our ill and ailing health service.

The pundits are half right. The NHS is indeed in a sorry state. International league tables frequently rank the NHS near the bottom in terms of healthcare quality. Moreover, the UK ranks 19th out of 23 for mortality amenable to healthcare and 20th out of 24 developed countries for cancer survival. The failings of the NHS are perhaps best summed up by The Guardian‘s reporting of the Commonwealth Fund study: “The only serious black mark against the NHS was its poor record on keeping people alive”.

But the pundits are wrong when it comes to the money. Leaving to one side the not insignificant fact that the NHS budget is rigfenced, a lack of money is not the problem. For example, Scotland spends more money per capita on healthcare than England, but it also has longer waiting times for appointments and response times for ambulances.

Moreover, a report by the National Audit Office found that as funding for the NHS has increased, productivity has decreased. The head of the National Audit Office said: “Over the last ten years, there has been significant real growth in the resources going into the NHS, most of it funding higher staff pay and increases in headcount. The evidence shows that productivity in the same period has gone down, particularly in hospitals.”

Last August, the National Director of Clinical Quality and Efficiency of the NHS, Professor Tim Briggs, told  The Times: “I do not think at the moment we deserve more money until we put our house in order and we actually make the changes that will improve the quality of care.” He continued by saying: “If you could get the infection rate across the country down to 0.2 per cent just in hip and knee replacements, you’d save the NHS every year £250-350 million by improving the quality of care.”

Professor Briggs is not the only senior figure to publically state this fact. For example, Sir Mike Richards, the outgoing head of the Care Quality Commission, last week said that the NHS does not necessarily need extra funding to improve care and patient safety.

Both Professor Briggs and Sir Mike are right to point out that funding is not necessarily the issue; what matters is how the money is spent. As Sir Mike put it, “it is absolutely vital that when the NHS gets more money it uses it wisely”. Professor Briggs and Sir Mike have rightly diagnosed the main problem facing the NHS: inefficiency. The UK ranks 24th out of 30 high and upper/middle-income countries for the efficiency of their healthcare systems.

A common rejoinder to this is the claim that because the UK spends a lower proportion of GDP than other countries, it is actually very efficient. This response is wrong for at least two reasons. First, although the UK does spend a lower proportion of GDP than some other countries, the difference is, in many cases, negligible. Second, it is also the result of a poor handling of resources. As Dr Kristian Niemietz points out:

The UK spends less on healthcare than many other developed countries, but this must not be mistaken for a sign of superior efficiency. It is mostly the result of crude rationing: innovative medicines and therapies that are routinely available in other high-income countries are often hard to come by in the UK. Any country could keep healthcare spending in check by simply refusing to adopt medical innovation. In more sophisticated estimates of health system efficiency, the NHS ranks, once again, in the bottom third.

Moreover, not only would an increase in funding for the NHS be ineffective, there is also evidence to suggest that it would exacerbate the current inefficiencies. Instead of allocating the scarce resources to the most effective hospitals, the money is used to prop up failing trusts and hospitals. As Dame Julie Moore, the Chief Executive of the Queen Elizabeth Hospital in Birmingham has said, “The NHS at its best is amongst the best in the world. However, it is patchy… Putting more money in has sometimes actually led to some of the problems, in that you’ve artificially propped up some of the hospitals that really are not sustainable.”

The UK is rightly proud of providing free healthcare to its citizens, and it would be incredibly regressive to stop giving free healthcare to the poorest and most vulnerable people in society. But we must stop clinging to the myth that the NHS is the best healthcare system in the world and the mistaken view that it is the only way of providing universal free healthcare. If we want to continue providing free healthcare to everybody who needs it then we must pull the plug on our outdated and completely unsustainable system.

To achieve a truly world class health service, there needs to be sweeping long-term reforms. The UK should seriously consider adopting a healthcare system similar to that of European countries such as Germany which is based on a publically funded insurance system which provides free healthcare to its citizens in a way which is sustainable and consistently outperforms the NHS. Such reforms will take courage on the part of politicians as any attempt to move away from the current system will be met by fierce opposition. However, if we want a healthcare system that is sustainable then these reforms are essential.

In the short term the NHS needs to work on becoming far more efficient and productive. Simply throwing money at the NHS without addressing such deep rooted problems will do nothing to cure it of its malady.

The NHS is sick. And more money is the wrong treatment. 

Ben Ramanauskas is a Policy Analyst at the Taxpayers' Alliance