November 6, 2014 by Paul Goldsmith
Simon Stevens, the Chief Executive of NHS England, published a report last week into the future of the health service, and announced that it would need £30bn more cash by 2020. In an outstanding article in the Observer this Sunday (click here to read the whole article), Andrew Rawnsley runs through the different ways in which this figure can can be raised by 2020 without bringing the rest of the country to a standstill. Rawnsley comes to a rather controversial conclusion, which is that the best answer is to encourage immigration into the country. It’s worth looking at how he gets there, because it is a very useful insight into the difficulties of running an ageing country.
Rawnsley starts by pointing out that during their recent party conferences, the Conservatives promised to “ringfence” the NHS budget (i.e. no promise of extra cash), the Lib Dems committed £1 billion more than the Conservatives and then Labour pledged an extra £2.5 billion. All of this is chicken feed next to what Stevens suggests will be needed.
Rawnsley also points out that, regardless of the misleading cover on his report – of a mother and a nurse and a newborn – spening on the NHS is mainly about trying to extend or improve the lives of the elderly. The average spend on retired households is nearly double the amount spent on non-retired households. The average cost of providing health and community services for a person aged 85 or over is around three times greater than for a person aged 65 to 74. Three-quarters of the NHS budget is spent dealing with long-term conditions.
Stevens’s suggestions of how to address this problem include the integration of health and social care (the NHS treats you for a broken hip but not for alzheimers – which doesn’t make sense), empowering patients and orientating resources more towards prevention and early diagnosis.
Stevens argues that if the NHS can be made more efficient, more innovative, more localised, more integrated, less hidebound by professional demarcations and more patient-centred then £22bn of the £30bn needed could be saved. This would be heroic and unlikely, still leave £8bn and STILL need to be done again in 2020.
There is no easy and no single answer to where this extra money is going to come from. Basic economics reminds us that spending more on health means we have to spend less on other things (called ‘opportunity cost’). We have been doing that already under the coalition government’s austerity policies.
The Labour politician Frank Field suggests we set up a “mutual fund” to pay for health and social care financed by national insurance contributions. Other Labour politicians have also pointed out how popular Gordon Brown’s extra penny on national insurance to boost NHS spending was in 2002. That may be so, but it was because it was a one-off and politicians from all sides would be wary of trying it again.
Labour’s extra spending pledge on the NHS is part funded by windfall taxes on tobacco companies. Further cash could come from other “sin taxes” such as a new tax on foods loaded with sugar and salt – because the most costly and growing burden on the NHS is obesity. These may work for a while, but eventually, people may give up cigarettes and fatty foods completely – great for health campaigners, not good for the Treasury.
Then there is the idea of rationing healthcare. I feel myself sucking air through my teeth as I type it. Yet we in the UK already do it through the fact that we are near the bottom of a healthcare table of 11 prosperous countries when it comes to timeliness of care (yes, queuing and waiting lists IS rationing). Another way of rationing would be charging for GP visits and payments for an overnight stay in hospital with the state helping out those with lower incomes pay for it. But “free at the point of delivery” is far too embedded in Britain’s conception of the NHS for a mainstream politician to go there. (Which is why only UKIP have mentioned it).
So Rawnsley is left with one place to go. We should welcome more migrants into our ageing country. Here are some facts. Migrants into this country are typically younger than the indigenous population. Migrants make less demands on the health service. Migrants contribute a good deal more in tax than they take out in benefits. The extra funds that migrants bring in can be spent on the NHS.
Having written that. I’m just going to sit back now and think of the name of a political leader who is going to suggest in the current political climate that the most palatable way to meet the NHS’s funding needs is to have more immigration……….