How come the NHS always needs more money?

One of the recurring themes of politics for the last thirteen years has been key figures in the NHS crying out for more money, the Government then saying they’ve committed a record-breaking figure and then things continuing to get worse.

Without any other information it would be easy to assume that the NHS was poorly run or that no amount of money will ever be enough. Fortunately, with one small piece of information, I believe it’s possible for almost everyone to understand what is going on and for most people to agree upon what needs to happen next.

Firstly, it is true to say that the NHS is receiving more money under the Conservatives, not just in cash terms but even when we take inflation into account there are above inflation increases in the NHS budget. Of course, Governments can pretty much always boast this, for the simple reason that the NHS budget has increased by around 3.7% above inflation every year since it was created.

The issue here isn’t that the NHS is seeing its budget cut, even in real-terms, but that the annual increase under the Conservatives is only 1.2%, meaning that the Government is under-investing compared to its predecessors. Now, that isn’t necessarily a problem if 1.2% is all that is needed, unfortunately the models show that the NHS requires a real-terms increase of 4% per annum in order to address growing demands.

Of course, if the NHS always required an extra 4% above inflation until the end of time then that would be a problem, as sooner or later the NHS would require greater overall revenue than it was possible to provide. Fortunately, that isn’t the case.

Why are the demands on the NHS increasing? Simple, we have an ageing population. Since the formation of the NHS we have seen an increasing number of people living to old age and an increasing overall percentage of the population in old age, inevitably older people require more healthcare and so an aging population puts more pressure on the NHS. The Baby Boomers are the largest generation in history–the clue is in the name–and they are reaching the point of maximum pressure on the NHS. So long as those demands are growing the NHS will continue to need extra resources.

However, this is clearly going to be for a finite period and as time inevitably reduces the size of that generation, with subsequent generations declining in size and consequently having fewer old people and therefore lower healthcare requirements . So, in time we should start to see demands upon the NHS first stabilise and then start to fall.

So, no, the NHS doesn’t require infinite funding, just more than it’s currently getting. Unfortunately, even the 4% real-terms increase in itself might not be sufficient and the reason for that rests in silo thinking.

While the NHS has the emotional clout to get the Government to cough up funding, there are lots of areas which don’t have so much sway despite having an enormous impact upon the NHS. The trick to cheap health services is dealing with things at an early stage or even through preventing them from starting at all, thereby saving the NHS from costly interventions. Yet, politically, it’s much easier to remove these interventions than it is to cut acute services.

The end result is that Austerity has resulted in a massive cut in public health funding, meaning that anti-STD services, smoking cessation services, weight management services, not to mention pandemic preparedness all went out the window. As a result, the small savings of yesterday are on course to becoming the big costs of tomorrow. The reality is you can’t produce an efficient service on the cheap, the need to cobble things together to cope creates inefficiencies and higher costs, you must first put in the investment before the costs start to drop. The NHS being rated the world’s most efficient health system in 2010, wasn’t a coincidence, it was a direct result of massive investment in the NHS under the last Labour Government.

Alongside this, the Government’s failure to honour the commitment they have repeatedly made in their manifestos and actually provide a solution to social care funding has left the NHS dealing with an increasingly large group of residents for whom hospitals are effectively acting as a nursing home of last resort, further impacting upon the resources available to meet actual medical needs.

Only with a change in approach from that followed by the Conservatives since 2010 can we unpick these issues directly caused by Austerity and deliver the healthcare system the country deserves. Without it, the lifespans of our our largest generation may well be cut prematurely short.