The future for NHS funding and services

The latest Care Conversation event saw Nicholas Bosanquet, Professor of Health Policy at Imperial College and Special Advisor on Public Expenditure to the House of Commons Health Committee, discuss the future shape of NHS funding.

Health funding in real terms was likely to rise by 1 per cent a year at most, whoever won the next election, Nicholas Bosanquet warned delegates. This represented a significant deceleration and highlighted the growing gap between future service commitments and the money available.

‘We’re hearing quite a lot about the funding gap,’ he said. ‘We’re not hearing so much about the demand pressures.’ Many of these came from ‘problems of success’, he explained. In the late 1950s, for example, there were around 100 people alive with end-stage renal failure – now there were 90,000. ‘That’s positive – they have a good quality of life,’ he said. ‘But they cost £25,000 a year each. When you start adding that up across various disease areas you start to get a very considerable bill.’

The effects of lifestyle factors such as rising rates of obesity and alcohol intake and falling rates of physical exercise would add further pressures, he said. Communications were also a significant factor for change. At the moment healthcare was a series of ‘fragmented, technically-driven activities with little sharing of information’, but the internet, peer groups and mentoring represented a major shift, particularly in terms of patient expectations.

‘Health has had its time in the sun’ he told delegates, as the coming years would inevitably see intense pressure to spend money in areas more directly linked to economic gain than health. ‘The overall decision for the next ten years is whether we go for choice and pluralism and allow a whole range of new entrants to deliver better services, or whether we continue with a huge, centrally-planned public sector monopoly.’

The vision existed for a new kind of service with much more emphasis on prevention, he stressed – alongside screening, early detection, care programmes and risk management. For the immediate present, however, a pattern of ramping up costs and patient expectations followed by budget constraints was being repeated, which led inevitably to ‘a search for a productivity miracle’ or a rise in waiting times. ‘The system then has to work out – if rationing is not by waiting – who is going to get priority for services,’ he said. This already happened in transplants and other areas, but in the future it could happen in many more.

A centrally-planned system also saw large-scale production of obsolete services – the ‘trabant cars’ of the health world. An example was outpatient letters – although often ‘incomprehensible’, 15m a year were produced at a cost of around £20 each. The health service had produced ‘a whole raft’ of obsolete services and unwieldy bureaucracies, he said, and there were also serious issues around agency staff and team stability.

There was, however, a significant opportunity to develop a better and more flexible service in which partnership with the private sector would be an essential element. A key way of going forward was to demonstrate far more strongly the evidence for competitive tendering, he said. Among the main levers for change were management systems, programme budgeting, costing of care pathways and better human resources, and there was no reason why there couldn’t be a publicly-funded system but with a much more competitive supply side.

The NHS was on a ‘one way escalator’ both in terms of costs and quality standards, he warned delegates, but ‘NHS post central planning’ would begin in about two years. ‘There are going to be two to three years of transition, where people wake up to the fact that the funding is inadequate to support the current pattern of services. About two years into the next government there will be a very big sea change. We will have to recognise that development of new services will depend on cooperation and partnership with the private sector to drive improvements.’