We cannot expect a former health Secretary to admit we need to ration health care, but this is the nearest we will get. NHSreality does not think the penny has dropped with a majority of the politicians as yet. ….. One of the signs of inefficiency is readmission rates, which are rising fast. There may well not be a bed for YOU when you need one… Rationing is happening but we are all denying it, and as it is covert, Commissioners get away with it where they can.
The penny has dropped. The Prime Minister has come to realise that the NHS — indeed the wider care system — needs more money. An announcement, perhaps to coincide with the 70th birthday of the NHS in July, is apparently imminent.
It has become obvious to government that demand and supply are out of kilter. Hospital admissions have risen by one third in a decade but resources have failed to keep pace with NHS funding rising at less than half the rate of the 4 per cent historic average.
The arguments are now raging in Whitehall about how much the NHS needs to be sustainable. History seems like a good guide — 4 per cent is surely the minimum needed.
But here I have a health warning for the government. Increasing the volume of cash is only one leg of the three-legged stool on which a stable NHS needs to sit. The second leg is visibility over-resourcing.
The NHS needs long-term line of sight — 5 to 10 years — over resources so that it can plan with certainty to transform local services so they meet future demographic and disease challenges.
It will take time to change services so that they are less fragmented and more integrated, less dependent on hospital care and more more community-based, less focussed purely on treatment and more on prevention. The government can gift it time as well as money.
Thirdly, reforms must accompany resources. People working in the health service know that the current structures are no longer fit for purpose. Structural reforms since 2010 have led to unprecedented confusion and uncertainty.
The reforms were intended to introduce more competition but the thrust of The Five Year Forward View — the NHS’s reform plan — is about encouraging greater collaboration, not least between health and social care.
Today the NHS is in an organisational no-man’s land. In particular there is a misalignment between the ambition of creating integrated, place-based and outcome-led care and the operation of the current financial system. Money talks in the NHS. Not just the volume of money but how it is used, deployed and how it moves around the system. I know that from my experience as Health Secretary in the Blair government.
When we put record resources into the NHS, at first hospital activity levels stalled and waiting times continued to rise. One of the key things that changed that was the introduction of incentives on hospitals to increase activity and reduce waiting.
The more they did, the more resources they got. That change led to unprecedented reductions in the times patients had to wait for an operation. But today, although reducing wait times remains important, the biggest priority for the NHS is to tackle chronic diseases like diabetes and improve population health outcomes. That needs a different set of financial incentives.
The current financial system is caught in a time warp and needs to catch up. Without reform there is a risk that that the government simply won’t get the most bang for the buck out of the new resources it intends to invest in the NHS. That would mean too many of the extra resources would be wasted.
What is more, if left unreformed, the financial system will be a stumbling block to the service transformation that is so desperately needed. According to a new report drawn up by PwC with the help of the Healthcare Finance Management Association, 76 per cent of NHS finance professionals feel the current funding structures in the NHS are not fit for purpose.
I agree. To make sure that the extra resources are put to the best use, reforms are needed. Health and social care budgets need to be brought together at a local level. How providers get paid should be changed to reward improvements in health outcomes rather than increases in the number of people treated — so helping the drive towards prevention rather than activity.
Channeling NHS resources through local systems rather than single institutions would speed care integration. And banning capital to revenue transfers — which have robbed the NHS of billions of desperately needed infrastructure spending in recent years — would provide more investment in out-of-hospital care. These changes would put extra resources to work for the benefit of patients.
Today the NHS has reached an inflection point. Without change, it will not be sustainable as a universal service providing care according to need regardless of the ability to pay. The promise of more government investment is welcome. but it must be accompanied by reforms.
There is a huge opportunity to better optimise resources, better empower patients and better improve health outcomes. Change is always hard in the NHS but there is a big prize on offer — not just to sustain the system, but to transform it.
Alan Milburn is chairman of the PwC Health Industries Oversight Board and a former health secretary