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Spend to save the NHS, or watch it die?

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Ross Ferguson
Ross Ferguson


NHS expenditure in England is expected to be £116.5 billion in 2016/17 [1], over £13 billion in Scotland [2], around £6 billion for health and social care in Wales [3] and £3.8 billion for HSC in Northern Ireland [4].

Huge sums of money, but this still isn’t enough.

If we value the NHS and want to keep it, things have to change. We need to bite the bullet, face reality, spend more on it and use it more wisely, or this ailing 65 year old will fail to exceed its threescore years and ten.

Australian alternative
I spent two years living in Perth, Western Australia, where they have a complex mixed private and public healthcare system. Medicare is the Australian public healthcare system and if you can afford it you need to supplement it with personal private health insurance [5]. If the cost of the service you receive exceeds the Medicare rebate (the amount the government will pay for your treatment or service), then you (or your private health insurance) need to pay that difference.

Healthcare in Australia is expensive. In fact one night we had to call the ambulance for my son and an invoice for $800 duly arrived a few days later – fortunately, we had private health insurance with ambulance cover (and my son made a speedy recovery). In the UK we are shielded from these direct costs.

We also had to pay for trips to the GP, the dentist (seriously expensive for routine appointments) and medicines weren’t cheap either.

This meant we were ever conscious of the costs of health services and whether certain services were covered by Medicare or the private health insurance. The private health insurance had limits on what it would pay out for each service and within each year.

There are of course perverse incentives within the system – the more services a healthcare professional provides (or refers you to) the more income they receive. So, if you’re ill you get sent for all sorts of tests and scans and hope that the costs are covered by Medicare or your private insurance.

Needless to say, doctor and dentists in Australia seem to be paid very well indeed, so little wonder that in the current NHS fiscal climate it seems an appealing option for beleaguered medics.

Australian spend on health is around $172 billion (that’s Aussie dollars – £84 billion) with two-thirds of this total coming from public sources [6]. Australia has a population of 23 million compared to UK’s 64 million and approximately £140 billion healthcare spend.

Medicare is partly paid for by the Medicare levy – currently 2% of taxable income. In the UK: National Insurance (NI) costs are paid on gross earnings at a rate of 12% for employees with a 13.8% employer contribution. Total revenue from NI contributions was £113 billion in 2014-2015 [7].

US system
The United states holds the unenviable record for healthcare spend at a massive $3 trillion – 17 percent of gross domestic product (GDP). This compares to 9.1% of GDP in the UK and 9.4% of GDP in Australia [8].

Around 85% of Americans have private health insurance mainly paid for by their employers [9], yet despite this, studies have shown that of 17 high-income countries the United States has the highest or near-highest prevalence of obesity, infant mortality, heart and lung disease, sexually transmitted infections, and adolescent pregnancies [10]. Draw your own conclusions.

The US Patient Protection and Affordable Care Act, otherwise known as Obamacare, aimed to improve access to quality, affordable healthcare and reduce the growth in healthcare spend [11]. The net costs of Obamacare is projected to be $1.2 trillion over 2016-2025, however, the number of uninsured Americans has reduced markedly, and in 2014 healthcare spending grew at the slowest rate since 1960 [12].

Back to the UK
According to a report from the King’s fund the NHS deficit is now £2.3 billion [13] and NHS England is expecting an annual deficit of £30 billion a year due to mismatch of needs of patients and resources by 2020 [14]. It’s clear that steps are being taken to address this very serious issue, but are they the right ones?

We really need a radical rethink about funding. Quite simply, we must start spending more on the NHS, otherwise we won’t be able to afford it and the system will collapse. The problem, of course, is that it’s not a vote-winning move –potentially it’s political suicide for whomever makes that decision. But it needs to happen.

However, rather than take pre-emptive action, it looks like we’ll have to endure a period of decay, with elements of the NHS grossly underfunded, and staff and services being put under intolerable strain. If the decay becomes too severe, recovery will be impossible and by default we may end up with an illegitimate chimera conceived in desperation and feckless leadership, and wish we’d taken the required precautions.

We need investment, we must improve efficiency, and we need to spend money more wisely. This means taking a sensible approach, investing heavily in primary care and protecting the excellent systems we already have in place.

Talking about a sensible approach, if the government fails to support the community pharmacy network, then it’s a sign that it completely misunderstands what a valuable resource community pharmacy is and the further contributions we could make to improve healthcare and reduce the burden on GP practices. This is a strategic mistake.

Fortunately in Scotland our government has a more realistic approach, and our representatives are doing a great job at getting the community pharmacy messages across. Let’s hope common sense prevails in the rest of the UK too.

At its heart the NHS is a fantastic service, especially when compared to the alternatives. But, the challenges the NHS faces mean that if we want it we have to pay for it.

So, who’s prepared to contribute more to ensure the survival of the NHS?

[1] NHS Confederation
[2] The Scottish Government
[3] Welsh Government
4] Health and Social Care Board

[5] Australian Government
[6] Deloitte
[7] HM Government
[8] The World Bank
[9] US census bureau
[10] US Health in international perspective
[11] Obamacare facts
12] US Department of Health and Human Services
[13] King’s Fund
[14] NHS England: Five year Forward View



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