I was pleased to see this briefing from the Chartered Institute of Public Finance & Accountancy examining NHS health finances.
The NHS’s own Five Year Forward View, despite its retro 60s communist sounding title, is honest enough to identify a £30billion funding gap from now until 2021, leaving £21bn in ‘efficiency savings’ to make. The official political establishment view during the election was that these new efficiencies can easily be found, and that only £8bn of extra funding is needed.
The reality however is that services are at the point where productivity does not need to increase – it actually needs to fall. Safety and quality of services are constantly under pressure due to permanently running at minimum staffing levels, without the capacity in the system for the expected pressures of epidemics, winter, staff illness and staff turnover. This leads to problems with retention of existing staff, subsequent spending on last minute locums, and a state of constant crisis. This is not just a failure of state providers in this free at the point of use system – Circle Holdings withdrew from their Hinchingbrooke Hospital contract and the rate of GP surgeries handing back their NHS contracts is rising rapidly.
Healthcare workers themselves realise this and many make the choice to withdraw their labour, not as a strike, but by reducing their NHS work, changing careers, working privately, locuming or leaving the country.
Thus in order in improve quality, and retain the skills of those who might otherwise not work at an unsafe intensity, productivity needs to fall, as more resources are put towards an individual’s episode of care.
The CIPFA report states: ‘It will be necessary, to underpin that agenda, either to add further to the NHS budget, charge users more, or reduce services. To choose none of those is not a realistic option.’
Given we are on the cusp of the next financial crisis the only acceptable option is to bring in user charges. This could easily be done in the part of the NHS where 90% of consultations occur, primary care. GPs already take money for various non NHS services, and most patients have a choice of GP practices such that competition could occur.
These charges however must be allowed to be set by the market for each individual practice. A blanket fee would only be taken back into central NHS coffers and would lead to a clamour for means tested exemptions such that the squeezed middle and working poor would take the brunt of the charges. This would damage further attempts to move away from sole government funding.
In contrast, freely floating charges would enable a mixture of providers to compete. Product differentiation, that magical process that fills in the left of the supply/demand curve, would occur, with patients choosing between options including: bespoke concierge medicine; a regular GP service with payments for convenience; services with better IT access, such as asynchronous secure messaging; a cheap system where all contacts are pre-triaged by a GP who decides which health professional will deal with your problem as per clinical need, not convenience. The NHS could continue to fund part of this according to illness burden – there are various risk profiling tools that accurately predict the health usage of cohorts of patients in various risk bands. These could be used to allocate supporting state funds for now.
Looking at the comments on social media sites such as Doctors.net and Pulse there is a real appetite for this amongst clinicians. Personally I would relish the chance to provide an excellent service with the extra funds this would draw in.
Governments nowadays don’t create policy, they adopt that of think tanks. If HMG wishes to follow the logic of the CIPFA report, they need to embrace NHS charging in the freest sense.
Image © Chris Yarzab