A few weeks after I started at the Health Foundation, I was sat in a room surrounded by experts discussing the financial and societal challenges facing welfare systems in different European countries. It won’t be news to anyone reading this blog that it is not a simple subject. Although the theoretical models make sense, when faced with significant socio-economic changes, redesigning funding systems is not easy. The redesigned systems need to be efficient, publicly acceptable and generate the best value for money in terms of health and quality of life.
The meeting was part of an ongoing collaboration (between RAND Europe, the Personal Social Services Research Unit at the University of Kent and the European Observatory on Health Systems and Policies) to explore international health and social care funding trends, as well as funding model innovations. The project will collate and synthesise evidence, while assessing the public acceptability of various feasible health and social care funding options. The aim is to improve the quality of debate on the long-term funding of health and social care in the four countries of the UK.
It’s not a new debate, but an ever important one due to an ageing population, continued growth in chronic diseases, growing public expectations and technological developments. All of these continue to put strain on services at a time of constrained financial resources and efficiency pressures.
In the UK today, spending on health and adult social care now accounts for £1 in every £5 of government spending. According to the Health Foundation’s projection model for the NHS in England, the funding gap by 2020/21 will depend upon the level of efficiency growth achieved. The Five Year Forward View gave the NHS a target of 2-3% efficiency growth. If this is achieved, then the funding gap will almost close by 2019/20. However, based on long-term trends, efficiency growth in the NHS has been 1.2% since 1979/80. Therefore, 2-3% is an ambitious target. If this trend continues and the planned budget remains unchanged, then there will be an estimated funding gap of £14bn by 2019/20 – with a funding gap of £1.7bn for social care.
While it’s no secret that the system is struggling and that there is no clear solution to the funding gap, the quality of evidence underpinning the debate can be improved.
At the meeting, there was much interesting discussion surrounding innovative funding approaches and the potential for learning from international comparison. However, what I found particularly interesting was the role of historical and cultural baggage on health and social care funding reform.
An example of this is how the initial creation of the NHS and social care services as separate entities has constrained funding reform. So while spending on the NHS has been ring-fenced, two things have happened in social care:
- Reforms to social care proposed in 2011 have been postponed until 2020.
- Real term cuts have been made to local authority budgets due to continued austerity measures.
It is interesting that the two services, which should be interconnected to provide the best all round care possible, diverge so much when it comes to public funding.
In the 20th and 21st centuries, health care has typically been delivered by a professional – mostly by doctors and nurses in hospitals or GP surgeries. Adult social care is much more ambiguous. It involves caring for people who struggle to care for themselves (perhaps due to frailty, impairment or disability) – with family often playing a crucial role in providing this care. Of course, there are many situations where this is not feasible for the family. Changing levels of need and views about disability have, over time, also contributed to differences in funding. Factor in an ageing society and the changing burden of disease, and it’s clear that social care is under pressure to catch-up.
Ultimately what we all want is a high quality sustainable health and social care system for all people in all four countries of the UK. In a world where most people’s health and social care needs are intertwined, it is important to take steps to blur the boundaries between the two.
Hannah Jones is an Economics Intern at the Health Foundation.