The NHS presents an economic dilemma. On the one hand we boast one of the best performing and most highly efficient health care systems in the world, yet on the other we see services and the staff that deliver them stretched to their absolute limits.
When it comes to productivity, the NHS is currently outperforming the wider UK economy, so investing in the health service makes financial sense. Historically, growing economies have increased their spend on health as a share of GDP yet, in the UK, current plans will see health spending fall as a proportion of GDP, which could risk us slipping below the standards and outcomes of the developed world
Good health and wellbeing are foundations of a successful society, so it seems odd to have a strategy to spend less on it, particularly with an ageing population. A healthy population and workforce is also vital for a strong economy. Sometimes I wonder whether the continuing success of the NHS, despite all of these challenges, has contributed to the ongoing hard line on funding. Unfortunately though, even the most elastic of substances has its breaking point, a position I feel the NHS is reaching.
Not even the scary financial headlines present the full picture. I am now the CEO of two trusts. For eleven years I have run what has become a successful foundation trust, South Warwickshire FT (SWFT). Since last year I have also taken on the extremely challenged Wye Valley NHS Trust (WVT). They both have great people working in them and have much in common but their finances are very different. Last year SWFT generated a small surplus, yet WVT had a deficit of just over £37m on an income of £180m. As a consequence, we have to borrow cash regularly to continue to deliver vital health care to the communities surrounding WVT. This tricky combination of a private finance initiative and sprawling geography requires local delivery of complex acute work to a small population base. Current funding formulas do not recognise this, but in addition to these local issues the trust shares some core challenges with the rest of the NHS.
Many other health care providers are building mountains of debt, and many more are optimistically forecasting improvement. In the short term, any increase in funding right now is not likely to result in the kind of productivity gain that the Treasury like to measure. However, it will be vital in the long run.
A firm funding commitment in the Autumn Budget is needed if we want to continue delivering high-quality care in the future – but what we also need now is to stabilise, plan and tackle the biggest problem of all: the chronic staffing shortage. Money alone will now not solve this problem.
Between SWFT and WVT, we spent over £20m last year on locum and agency staff, an expensive and unsustainable scenario. We need careers in the NHS to be attractive to younger generations, as well as retaining the staff that we have. The media’s negative portrayal of the NHS as an organisation in turmoil, where pay is capped and staff are under increasing pressure, is not going to solve the problem. We need to ease the pressure and develop a long-term strategy, longer than our traditional political cycle. It will need a cross-party commitment to see it through, and to make the necessary investments in technology and workforce. This will help our staff to once again promote the NHS as a great place to work, which will support the delivery of first class care.
The NHS generally always delivers, but in the past few weeks many senior figures have spoken out to make it clear that its elasticity is not infinite. They are not crying wolf. They are making it clear that there is a simple question at hand – increase the funding or reduce the offer? The NHS is simply too good for us to get the answer wrong.
The opinions expressed by bloggers and by those commenting on blogs are theirs alone, and do not necessarily reflect the opinions of the Health Foundation.
Joint statement on health and social care with Nuffield Trust and the King's Fund.
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