In Depth, NHS Funding

How Badly Is The NHS Underfunded?

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So the story of NHS underfunding has finally made it back into the mainstream media. It’s not like NHAspace haven’t done our bit since we were founded in 2014:

  • “Simon Stevens of NHS England will shortly be unveiling an NHS roadmap […] Looming large is the matter of the claimed £30bn funding gap, an artefact of the Tory policy to stagnate NHS funding rather than commit to real-terms growth.” – NHS England And The £30bn Funding Gap, October 2014.
  • “David Nicholson and Simon Stevens have both used their time as NHS England CEO to implement austerity measures, leading to a cumulative shortfall in funding of at least £35bn per year by 2020” – 5 Things You Should Know About STP, August 2016.

But how much money would be needed to resume normal service?

With the NHS being asked to save tens of billions each year, it’s a miracle that hospitals are only in approximately £3bn of debt right now. The ‘Nicholson challenge‘ from 2010 to 2015 demanded efficiency savings of £20bn. The ‘Stevens Challenge’ (the STPs and Five Year Forward View) is asking for another £22bn. Some of these savings come from cutting beds and staffing, resulting in the increased waiting times, rationing of care, and missed targets that we are increasingly seeing.

But some hospital execs aren’t happy making such swingeing cuts. There came a point where the cuts would go too far and lives would be at risk. This wasn’t palatable, so instead of making further cuts, those execs chose to run a deficit and put their trusts into debt. This graph shows just how common this practice has now become:

_88338474_nhs_deficit_624

Let’s assume from this graph that 2012/13 was the year that the NHS couldn’t take any more cuts. It’s also the year that the Health & Social Care Act was enacted. If we take the funding from 2012/13 (102bn for NHS England) and apply ‘NHS inflation’ of 4%, then this year’s funding should be £120bn just for the NHS to scrape by. For comparison, the 2016/17 budget is £105bn. So the NHS is currently about £15bn behind, increasing to a gap of around £35bn in 2020/21 if the government continue with their current plans.

The good news is that our NHS is truly a budget service right now, and we can afford to increase our spending.  If we were to catch up with the French, Germans, Canadians, Swiss, Japanese, etc, we’d spend about £35bn more on the NHS. The bad news is that the government, be it through ideology or deliberate maleficence, are refusing to spend that much. The great irony is that increased NHS spending would actually stimulate the economy, helping us get out of the austerity rut. We can only hope that the political choice to underfund the NHS will be overturned now that more and more professionals are speaking up.

NHS Funding

Newspeak and the NHS

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NHAspace is fed up with the various catchphrases used by the government and the media to spin stories about the NHS. Here are our top five, handily debunked and translated.

1 – Excessive demand / high bed usage

The NHS has seen a steady reduction in the number of inpatient beds, whereas the population has steadily risen and social care needs upon discharge have increased.

The overall number of ‘finished admission episodes‘ has increased by 2-3% each year, in a reasonably predictable manner. The same goes for emergency admissions, and the recently reported ‘unprecedented increase’ in emergencies is again only a 3% rise.

When the government say that hospitals are under strain from unprecedented demand, they actually mean unprecedented bed reductions and a lack of social care. If social care was properly funded then many patients could be discharged from hospital in a more timely fashion. And rather than year-on-year cuts, bed numbers need to at least increase in line with the population (around 1% each year).

2 – Overspending / hospitals in debt

The NHS budget has fallen in recent years, in real terms. We also spend less per head of population on healthcare than many other westernised countries. It should be clear that hospitals aren’t overspending, but are actually spending less than they should on their patients, all thanks to significant underfunding.

But the story goes further than that. To whom are the hospitals in debt? “The government had to lend cash-strapped hospitals a record £2.825bn in the last financial year” the Guardian reported in July this year. So state-funded hospitals are in debt to the state. Regardless of the fact that hospitals are being turned into independent businesses, they are still really underfunded rather than being in debt.

3 – No money left

The UK government cannot actually run out of money per se. If they spend too much and don’t apply enough taxation, then inflation will rise, but an increase in NHS funding doesn’t have to mean an immediate ‘NHS tax’. (Government spending is a matter of macroeconomics, and isn’t like a household budget.) The government could choose to provide an additional investment in our NHS in order to bring NHS funding in line with our European neighbours.

Every additional £1 spent on the NHS would boost the economy by £3 by supporting jobs and keeping people healthy. That means a £30bn injection of funding, which would represent a 3.8% increase in state spending, could increase the UK’s GDP by 4.4%. And this is nothing compared to what the King’s Fund think we could support. Their analysis suggests that, in the next few decades, the NHS could be funded to a much greater extent and still be affordable.

So far from there being no money left, the government could invest in the NHS and reap the economic rewards. Instead there is a political choice not to spend.

4 – 7 day NHS / weekend effect

The NHS is already open on weekends, and most specialties have consultants on-call and doctors on-site 24/7.

Hunt’s 7-day NHS is actually part of a top-down reform, pushed upon doctors at a time when government-enforced cuts mean that the NHS is already stretched too far. Forcing staff to work longer hours whilst using STP hospital closure plans to close departments isn’t safe, so Hunt needed a stick to beat them with.

This is where the weekend effect came in. A study commissioned by Hunt’s department, interpreted wrongly by Hunt, and quoted in press releases before it was even published, was used to attack doctors for working safe hours. How dare they only work one-in-four weekends when Hunt had proof that patients were coming to harm? But, as academics have revealed, Hunt’s weekend effect was based on flawed data and a downright flawed interpretation.

With his weekend effect rubbished, Hunt is now trying to make the conversation about doctors’ salaries, when in fact it’s about overstretching an understaffed service.

5 – Sustainability and Transformation

The Sustainability and Transformation Plans are supposedly about creating a modernised NHS. In reality, sustainability actually means financial restrictions and transformation means enforced closures and outsourcing. Any NHS organisation failing to follow the STPs will be denied what little new funding there is to be had, and will face a ‘failure regime’.

The end game here is for the government to whittle the NHS down into an basics-only service with a few large hospitals offering emergency and major illness care only. A two tier system will emerge, where a significant amount of routine care will be available privately and not funded by the NHS.

Open Letters

Doctors’ Strikes: Time For One Final Push

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An open letter from the NHAspace blog to all those doctors considering what action to take.

Dear doctors,

You’ve come a long way since the ballot on industrial action last year. You’ve forced the government to come back to the table at least twice, and got concessions out of them. You did this by maintaining a united front, and by being honest and measured whilst your opponents were being deceitful and excessive.

That’s why you still hold the cards. Hunt went all-in months ago with his ‘imposition’. He has no greater sanction left, and can only harm you in the court of public opinion. And so Hunt is trying to convince the public to turn against you.

“Hunt’s contract is far more damaging than any strike. He’s stretched the NHS so thin that people are already falling through the cracks.”

But he hasn’t succeeded yet. A new poll shows 57% of the public still support the strikes, and 51% believe Hunt should not have been reappointed. You can still win the public relations battle. Just do the following:

1 – Be team players. If the public think that doctors are divided over the contract and the strikes, they’ll lose faith in you.

2 – Be constructive. If you don’t like the strikes, focus your energy on talking about the issues you want fixed, rather than attacking your colleagues.

3 – Keep the message simple. The government are still pursuing the ‘7-day NHS’ line, which is easy for the public to follow. So remember: Hunt’s contract is far more damaging than any strike. He’s stretched the NHS so thin that people are already falling through the cracks.

4 – Expect to win, and soon. The government may have put on their poker face, but underneath the pressure is showing. If you can keep the public on your side, the government will have to cave in soon.

Regardless of what you think of the strikes, you must work together to win this fight. The very future of the NHS depends on your actions in these coming days and weeks.

Best wishes,

NHAspace

Open Letters

Open letter from NHA leader Dr Paul Hobday to the director of 38 Degrees

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Open letter to David Babbs, director 38 Degrees, from NHA leader Dr Paul Hobday

Dear David Babbs,

I would like to introduce myself, my name is Dr Paul Hobday, leader of the National Health Action Party. A political party that was formed by doctors and campaigners in 2012 to fight to protect the NHS.

Whilst we appreciate the value of the platform 38 Degrees offers to NHS campaigners, we are concerned about an issue arising from your article in The Guardian last Friday 26 August.

38 Degrees commissioned Incisive Health, who you describe in your article as health policy experts, to review all publicly available documents on the Sustainability and Transformation Plans. You crowdfunded to raise the money for this commission. Although, of course, we were extremely pleased to see this being raised to such high profile by your campaign, there was little in the report that had not already been appraised and critiqued in the public domain. In addition, you report that 38 Degrees received a detailed leaked plan for one area. That was a real scoop.

However, we feel you ought to be aware that the co-founder of Incisive Heath is Bill Morgan, who was a special health advisor to Andrew Lansley, the author of the Health and Social Care Act (2012). The company itself is a health lobby group, representing private sector interests to government.

The National Health Action Party wants to see an end to the ‘revolving door’ culture of Westminster and Whitehall. In respect of your article it must be clear that Incisive Health is part of that culture. Not only does Bill Morgan’s role in the destructive Health and Social Care Act (2012) make his company particularly unsuitable for NHS campaigns, their links don’t end there.

In February 2016, Richard Douglas, the Department of Health’s Director General of Finance, joined Incisive Health. Andrew Lansley said he had “hugely valued” Douglas for his “advice and guidance”. Jeremy Hunt was also full of praise. Douglas was in charge of NHS money and policy during both Lansley and Hunt’s reigns, and so had a strong connection to their cuts and privatisation agenda.

Incisive Health count Pfizer as one of their clients, so perhaps it is no surprise to find one of their ex-employees, Ben Nunn, in the health team of Owen Smith, given Smith’s own career with Pfizer. Nunn also had a stint as adviser to Heidi Alexander whilst she was Shadow Health Secretary.

We hope that now that you have been appraised of the nature of Incisive Health, 38 Degrees will consider ending its relationship with that company as soon as possible.

Thank you for all you are doing.

Best wishes

Dr Paul Hobday

Leader, National Health Action Party

Notes:
From the Incisive Health website “Bill is a former policy special adviser at the UK Department of Health. He was one of the leading architects of the reforms to health and social care and has a unique understanding of the pressures that influence or impede change in the NHS.”
Bill Morgan appointed as Special Adviser to Andrew Lansley – MHP
Health Mandate’s Bill Morgan has been appointed as Policy Special Adviser to Andrew Lansley.

NHS Funding, NHS Privatisation

Why Are Doctors Striking Again?

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The BMA are planning a further series of walkouts, this time stretching to five consecutive walkouts each month (8am-5pm). But why are doctors still unhappy? NHAspace looks at some if the reasons.

1 – The contract still isn’t fair

There are some serious problems with the contract that Hunt is imposing, including poor treatment of pregnant women and parents who work part-time. The latest version of the contract pretends to fix these, but the fix is time-limited so that future doctors will suffer. Hunt is treating the contract like a broadband contract, offering a good deal initially but a bad one in the long run. Doctors care about their future colleagues and aren’t about to sell them out.

2 – The government is slashing the NHS

Groups such as the NHA have been aware of the STP hospital closure plans for several months. Now that these ‘secret plans’ are finally being reported in the media, you can be certain that every doctor is aware of the latest hatchet job being performed on the NHS. The idea that Hunt could achieve a ‘truly 7 day NHS’ with no additional funds was nonsensical; expecting it to happen in the midst of massive service cuts is utterly ridiculous.

3 – Whistleblowers are still being punished

The Chris Day case highlighted the fact that doctors in training posts has no whistleblowing protection and could lose their careers just for speaking up. The BMA has made some headway by asking Health Education England to acknowledge their duty as a de facto employer, but you can expect doctors to push for a cast iron commitment to whistleblower protection.

4 – The government are privatising the NHS 

The STP hospital closure plans will create huge gaps in England’s healthcare system; gaps which the private health companies will be happy to fill, for a fee. Healthcare is already being rationed (ask anyone applying for routine surgery that requires ‘funding approval’), but the STPs will take us to the point where co-payments and top-up health insurance become the norm. This isn’t what today’s doctors signed up for.

Read more about privatisation: 5 Forms Of NHS Privatisation You Should Know About.

5 – Jeremy Hunt was reinstated

By inviting Jeremy Hunt to continue as Health Secretary, Theresa May has shown a lack of respect for medical professionals. But in all honesty, Hunt is just a figurehead. The gradual sell-off of the NHS and mistreatment of its workforce is a core Conservative policy, both due to the party’s ideology and their ties with corporate party donors, many of whom own shares in private healthcare. Doctors will express their anger at Hunt, but of course the problem goes much deeper.

In Depth, NHS Funding, NHS Privatisation

5 Things You Should Know About STP

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The Sustainability and Transformation Plans have divided the NHS in England into 44 local areas, and each has been told to cut services as part of a nationwide ‘financial reset’. But what’s actually going on, and how much of the government’s reasoning is just spin? NHAspace brings you a handy myth-busting guide.

1 – NHS Trusts aren’t overspending

The narrative of STPs is that our hospitals are in debt due to overspending. That would be true if the government had matched the NHS budget to the actual healthcare needs of our country, but they haven’t.

The cost of healthcare increases by 4% each year. In the UK, this is referred to as ‘NHS inflation’. If NHS funding doesn’t keep pace with this inflation, then services have to be cut or closed.

David Nicholson and Simon Stevens have both used their time as NHS England CEO to implement austerity measures, leading to a cumulative shortfall in funding of at least £35bn per year by 2020:

Year Increase Needed Actual Increase Shortfall
2010-2015  £20bn  £7bn  £13bn
2015-2020  £30bn  £8bn  £22bn
Total (2010-2020)  £50bn  £15bn  £35bn

The NHS is underfunded, and is actually spending less than it should on healthcare. That’s quite the opposite of an ‘overspend’!

2 – The NHS isn’t unaffordable

Pundits love to tell us about the new challenges facing the NHS, claiming that we now cannot afford universal healthcare. We are told that hospitals are overspending and that they are in debt.

In fact, the NHS is extremely affordable. Here’s a list of healthcare spending in several westernised countries in 2014:

Country Per person ($) % of GDP
Belgium 4,884 10.6
Canada 5,291 10.4
France 4,959 11.5
Germany 5,410 11.3
Holland 5,693 10.9
United Kingdom 3,935 9.1
USA 9,402 17.1

As the table shows, the UK could easily choose to dedicate an extra percent of its GDP to healthcare, providing the NHS with the funds needed to sustain a modern health service.

3 – Hospitals aren’t overstaffed

The ‘financial reset’ planned for the NHS includes a limit on staff recruitment, the implication being that hospitals need to cut back on excessive hiring of permanent staff. Considering the billions spent on hiring agency staff to fill rota gaps, this is certainly not true.

The underlying issue here is safety. Following the Francis Report into the Mid Staffs scandal, hospital managers decided that they would rather exceed their budgets and hire more staff, than be guilty of manslaughter. Fed up with being ignored, the DoH is now coming down on managers with an iron fist. Anyone caught protecting staffing levels by overspending will be subject to a ‘failure regime’.

4 – This Isn’t About Centralisation 

Centralisation of specialised services can improve outcomes for patients with specific illnesses. But trauma, cardiac and stroke services have already become centralised. For many other illnesses, and for maternity and step-down care, it’s important to have smaller District General Hospitals (DGHs) and Community Hospitals. These provide care closer to home and take the pressure off the big, specialised centres.

So don’t be fooled. Closing A&Es and taking services away from local hospitals isn’t centralisation. It’s un-evidenced vandalism in the name of cost savings.

5 – This Is About Creating A Two Tier System

The level of cuts and closures required by the STPs is such that the NHS will become unable to provide a universal service. Rationing will increase, so that most routine procedures will be refused funding. Once various DGHs have closed, the hospitals still standing will struggle with their increased catchment areas and will be forced to provide essentials only.

This was already envisaged by Simon Stevens, who is keen to separate emergency care from routine care. Emergencies will be handled in NHS hospitals, whilst the routine work will be handled by the private sector. Patients wishing to undergo non-essential procedures will find themselves needing to pay to have their cataracts and hernias treated or their tonsils removed.

In Depth

5 Reasons We Need A General Election

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NHAspace looks at the arguments for calling a snap general election this autumn.

1 – The Country Dislikes ‘Unelected’ Leaders

When Gordon Brown took over the premiership in 2007, there were moans from the press that he was ‘unelected’. This wasn’t strictly true. Brown had been elected by his constituency, inherited the role of Labour leader from Tony Blair, and had been invited by the Queen to form a government. However, he lacked the mandate that many leaders gain by leading their party through a general election. George Osborne later stated that such leaders lack democratic legitimacy, and William Hague claimed that such leaders are “unacceptable” to the majority of the public. Of course they were talking about Brown; they may not feel the same way when the boot is on the other foot.

2 – Cameron and Johnson Have Abdicated Control

Having lost the EU referendum, David Cameron found himself lacking the legitimacy to continue leading the country. But his Brexit counterpart Boris Johnson has pulled out of the Tory leadership race, apparently knifed in the back by the charmless Michael Gove. The favourite for the leadership is now Theresa May, who backed the Remain campaign. With the options for Tory leader now consisting of Remainers and second-tier Leave figures, the public is unlikely to be happy whatever the result.

3 – There Was No Brexit Manifesto

Despite making a range of promises regarding NHS funding, immigration and the single market, the Leave campaign did not have a formal manifesto. (Since the referendum, they have in fact gone back on several promises and deleted almost all the content from their campaign website.) The manifesto on which the Tories were elected last year also did not detail how they would manage a Brexit vote. Nobody in Westminster has a specific mandate from the public on how to deal with Brexit. The public should now be given a chance to elect MPs based upon their plans to deal with the referendum outcome.

4 – The Country Needs Certainty

The Brexit vote has plunged the country into uncertainty. The country is currently leaderless, nobody is certain if or when Article 50 will be triggered, and the markets have responded by plummeting to historic lows. Without a general election, there will continue to be a lack of strong government, and discontent will continue as the country remains divided by the referendum result.

5 – The Public Want An Election

While most are against the idea of a second EU referendum being called, polls indicate that the majority of the British public want a general election this year. This includes 4 out of 10 Leave voters, some of whom feel they were misled by the Brexit campaign claims.