NHS: Cheap and expensive, brilliant and disappointing
Surveys suggest the public is happier than ever with the health service but a spending squeeze could reduce satisfaction.
Tuesday 3 July 2018 09:17, UK
The NHS: a relentless drain on the public finances that simply doesn't deliver the results it should? Or an efficient, well-run machine that outperforms most other public health providers?
You might have thought that a deep dive through the statistics on Britain's health service might help you choose between these two dramatically different portraits.
But the reality is that the deeper one delves into the numbers, the more apparent it becomes that the NHS is in fact all of the above.
It is by turns cheap and expensive. Its performance is brilliant in some metrics, disappointing in others. And it defies most efforts at reform and restructuring.
For all the fears about privatisation by the backdoor, the NHS we have today is not all that different, in broad-brush terms, as the one we had decades ago not long after its creation.
Indeed, it is not widely realised that Britons currently pay less in direct charges for the NHS (as a proportion of total funding) than they did in the 1960s. Of course, the corollary of that is that they pay more in taxes and national insurance - a lot more.
Consider how things have changed over the past few decades. Back in the 1960s the government spent more of its money - about 14% of total managed spending - on defence, and about 10% on education. Health spending was a comparatively small part of government spending, at around 8% of the total.
Since then, the amount spent on defence has fallen further and further, education spending has remained more or less constant, but health spending has risen rapidly, with little let-up. Today the health budget accounts for a whopping 19% of total spending.
That being said, spending has certainly been curtailed in recent years. Back in the 1950s and '60s we, the taxpayer, spent an average of £350 each (in today's money) for the service every year.
By 1997 that had risen to around £1,000 per head. Then came the biggest funding increase in NHS history, Gordon Brown's National Insurance-funded splurge. During the Labour government, between 1997 and 2010, the amount we each spend on health doubled from £1,000 to £2,000.
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And had spending increases carried on at the same rate, we would soon be due to break through the £3,000 a head mark.
But then came austerity, and spending has increased at a far slower rate. Even after Theresa May's "70th birthday present" spending increases of £20bn over five years, the average spending per head will still be "only" £2,500 by 2022/23.
That is still an awful lot of money. So why is it that the NHS is so hungry for money? A glance at the pressures facing the service provides at least some of the answer. It comes down to a few conjoined factors: an ageing population, ever more expensive healthcare and the need for more investment.
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To understand how this stuff mounts up, remember that we currently spend £128bn a year on health. Over the next 15 years, the cost of providing for an ageing population, who tend to need more healthcare, will add an extra £59bn to that total.
The rising costs of providing the latest medicines and treatments will add a further £49bn. Against those extra running costs the £3bn or so extra the service might need each year in extra capital spending, for new hospitals, wards and beds, actually looks rather tiny.
And while the NHS certainly has room to cut costs and improve its productivity, this will only nibble a relatively small hole out of that extra lump of spending - perhaps about £29bn, according to estimates from the Institute for Fiscal Studies and Health Foundation.
The upshot is that to fund an NHS which is providing more or less the same service as the one we have today we may have to spend as much as £210bn by 2033.
All the same, when you take a step back and compare countries, the UK's healthcare system is hardly the most expensive.
Britain spends about 10% of gross domestic product on health - 8 percentage points on the NHS and other public provision, and about 2 percentage points in private healthcare. A bit more than Australia and a bit less than Austria. Certainly far less than France or Germany, and barely half of what the US spends.
That raises a question: what do we actually get for our money? The answer is a service which is, in places, a world beater and in other places well behind the curve.
For an illustration, consider survival rates for a couple of illnesses. The UK's five-year survival rate for leukaemia is in the top five in the world, having risen sharply in recent years. But the five-year survival rate for breast cancer is (despite a big rise in the past decade or so from 80% to 86%) among the lowest in the developed world.
We have a service which has fewer MRI units and CT scanners than almost every other developed country. The only other nations which consistently have fewer are Mexico and Hungary. There are fewer hospital beds to go around than in most advanced economies, fewer doctors and nurses than most other countries.
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In some respects, outcomes are improving. Waiting times are certainly down sharply compared with previous years. The mean waiting time dropped from about 40 weeks in the late '80s to around five weeks in recent years.
But in others, there are some worrying signs. Consider NHS mortality rates. The number of deaths in hospital per 100,000 people has fallen more or less steadily since the 1980s. And back in 2010 the expectation was that that trend would continue.
But around then, something changed. Hospital mortality rates stopped falling. Does this have anything to do with the fact that 2010 was when fiscal austerity kicked in? That's what some campaigners suggest. But it's still too way too early to know whether this trend is going to continue - and quite what's behind it.
One thing is clear though. For all the moaning, the spending, the taxes and charges we pay for the NHS, we love the health service - more, perhaps, than ever before.
The British Social Attitudes Survey has been asking about Britons' happiness with the NHS since the early 1980s, and for most of that period the proportion of people describing themselves as satisfied with the system has been more or less in line with those dissatisfied with it.
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But in the early 2000s that started to change, and for most of the past decade and a half, the percentage of people satisfied with the NHS has been considerably higher than those unhappy with it - about 60% satisfied vs between 20% and 30% unhappy.
We have rarely been happier with the health service. But will that continue? History suggests these outcomes are correlated (with a five or ten year lag) with overall spending on healthcare.
Will the recent period of austerity mean the NHS's popularity is about to take a dive too? Can Mrs May's infusion of cash make a difference?
The next few years really are critical for the NHS.