The NHS could start charging for some services and treatments within the next 10 years after new research suggests a further decade of austerity will leave the status-quo unsustainable.
Public funding for health, social care and welfare is set to be tight for at least 10 years, according to the Institute for Fiscal Studies (IFS), which means radical changes are needed to keep up with the growing demand from our aging population and rise in chronic conditions.
The research, funded by the Nuffield Trust, concludes that “serious thought” must be given to NHS spending which must include reconsidering which services should be free and increases in taxation to finance the service.
This opens up the prospect that the NHS would no longer be free at the point of use for some patients, some of the time. It could mean, for example, some patients being charged for GP appointments or IVF or treatments for non-urgent conditions.
NHS spending in the UK reached £137.4 billion in 2010/11, with the spending in England accounting for a quarter of all public spending. Nevertheless, the report by the IFS mapping the long-term financial challenges facing health and social care service claims NHS spending between 2011 and 2015 is the tightest four-year period of the past 50 years. This is despite being protected from actual budget cuts suffered by other public services.
This research comes after a senior Department of Health official was reported to suggest that the efficiency drive in the NHS will continue after 2015, with the total savings needed rising from £20bn to a possible £50bn by 2019/20. His comments are a startling admission of the impact on public services of the global financial crisis and ensuing recession, according to Professor John Appleby from the think-tank the King’s Fund, who said such a challenge would be setting the NHS up to fail.
Anita Charlesworth, chief economist at the Nuffield Trust, said: “Asking the NHS to take a more equal share of the pain amounts to an unprecedented productivity challenge.
“If the Government can increase taxation or borrowing, cut the welfare bill further or generate greater efficiencies in other parts of the public sector then the NHS might be in line for a real-terms increase, albeit at a rate that does not keep pace with demographic pressures.
“However if any of those options are judged to be too difficult politically or too damaging to vulnerable groups and other key public services, health spending will have to fall in real terms.”
IFS deputy director Carl Emmerson, who co-wrote the report, said: “The last decade saw the NHS receive large increases in its funding, but the outlook for the 2010s is in sharp contrast to this.. Serious consideration should be given to the options for the NHS, which include reviewing the range of services available free at the point of use and reconsidering the level of taxation needed to finance them.”
The study considers several possible scenarios over the next decade, all of which are politically tricky and rather bleak for the public. The authors said continuing to protect the English NHS from actual cuts between 2015 and 2017 would mean slashing spending on other public services by an average 2.3 per cent a year.
While increasing health spending in line with national income between 2015 and 2022, would still leave the NHS budget growing less quickly than what is needed to care for an aging population.
This seven-year increase, along with increases to other public service spending by 1 per cent a year in real terms, would need an increase of taxation, borrowing or further welfare cuts - over and above the £10 billion hinted at by Chancellor George Osborne in this Budget speech. This is equivalent to an increase in the main rate of VAT from 20 per cent to just over 22 per cent.
Mike Farrar, NHS Confederation chief executive, said there was an urgent need for honesty. “We need to forensically examine what services and treatments provide the best outcomes for patients and local communities, and what the NHS can and cannot afford to provide in the future. This will be far from pain-free, but decisive action is necessary if we are to maintain high-quality services and stay in the black.”
Jacqueline Davis, from the campaign group Keep Our NHS Public, said: “The Government should stop wasting money on creating an unwanted market in the English NHS, otherwise there will be a continued reduction in core services and the NHS risks becoming a poor service for poor people.”
A DH spokesman said the NHS could do better. “We are already seeing results - the NHS made £5.8 billion in savings in 2011/12 while keeping waiting times low, performing more diagnostic tests and planned operations, and reducing infections even further. The NHS is showing that it can meet the financial challenge set.”