Austerity in public services is going to last a decade, according to new analysis by the Nuffield Trust and Institute for Fiscal Studies.
New data shared in advance of publication at the Nuffield Trust’s excellent Health Policy Summit last week shows that even when the economy returns to growth, the NHS will have to find productivity gains of two per cent a year for the whole of the 2015-20 parliament.
That’s better than the four per cent gains demanded each year at present but is still a massive challenge for a sector which is used to above-inflation rates of growth.
The extra demand on services from our ageing population is likely to absorb all of the extra cash an incoming government will be able to spend on the NHS. And even then public finances will be under so much pressure that many of the coalition’s cuts to public services will be permanent.
It’s not a doomsday scenario but it does mean that austerity is here to stay. Which means that government will have to be a lot smarter to compensate for being smaller.
Politically, the Nuffield analysis will pose major challenges. Labour made long waiting times unacceptable and there will be pressure to save elsewhere, for example on labour costs. These are likely to come through an end to national pay deals and a ‘de-professionalisation’ of services, so that healthcare assistants do more and doctors less.
In order to improve outcomes, we will need to go further and faster in moving care out of hospitals into the community. In places this will mean hospital or ward closures. Fight against those during an election campaign and Labour will need to make even bigger productivity gains in government. Standing up to argue for change will make it easier for the NHS to develop more preventative services that suit 21st century needs.
It’s obvious that quality and value will play a central role in Labour’s public spending ambitions. Fortunately there is real scope for delivering better outcomes with the money we already have in the system.
I have argued that people want to see Labour’s vision for change in the NHS. I think it must do three things.
First, it must describe what health services of the future will look like and why they are needed. Instead of patching us up every time we are ill, services will allow those who can to look after ourselves and support those who can’t to stay well. Labour will need to facilitate the emergence of new health professionals and economies, based on the principles of self-care and risk management. Rather than restructure commissioning, as the coalition have done, Labour should encourage provider development and champion services of the future.
Second, it must set out how it will deliver transformational change at scale across the whole country. The transformation of stroke services are an excellent example. Strong leadership led to a specialisation of care that reduced cost and improved outcomes. The NHS is better than many people think at innovation but the average time it takes for an innovation to become standard practice is about 19 years. There is no silver bullet but there are levers, including competition, which will be challenged by vested interests. Labour will need the kind of reforming zeal and sheer persistence it displayed in delivering the 18-week referral-to-treatment target.
Third, the party will need to rethink traditional boundaries, certainly between health and social care but also between professionals and patients. The incentives in NHS and social care are too different to promote the joined-up care patients want and many people think the health and social care bill has reinforced dividing lines between primary and secondary care. Labour should champion radical new single budgets which allow services to be planned for populations, rather than organisations. And it should ramp up the reality of patient choice, extending transparency to primary care as well as hospital performance and allowing people to organise their health online in the same way many of us now organise our banking.
Public satisfaction with the NHS is at its highest-ever level yet patients know the NHS needs radical change. The private sector achieved huge improvements in productivity through the privatisation of effort. Today I have gone online to pay some bills, book a hotel room and an MOT for my car. Now that most ill health is for chronic conditions patients live with every day for years, rather than acute illnesses that might kill us, there is no reason why we can’t enjoy a similar revolution in health. We have been talking about this for years. But as one of the participants said at the Nuffield Summit, a decade of austerity might just be the incentive for change we all need.
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Neil Churchill is the chief executive of Asthma UK. This article is written in a personal capacity
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