Awaiting treatment: An element of privatisation has always been a feature of the NHS

We must be open-minded about the future funding of the National Health Service

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The debate about the National Health Service – about which we have heard a good deal this week and will experience still more as the election nears – is usually framed in binary, almost Manichean and certainly simplistic terms. Is the problem money or efficiency?

Politicians in each party cherry-pick the evidence that supports them. For the Government, and its allies in the press, comes the claim, for example, that the Labour-run Welsh NHS is such a basket case that dying patients are dragging themselves across the Marches to find sanctuary in England. A caricature, obviously, and contemptuous of hard-working professionals in the principality. More broadly, almost every failing in an NHS unit – negligence, superbugs, even the Jimmy Savile scandal – is presented to suggest that the NHS is broke, according to those who never declare their true, malign motivation to relegate the NHS to a charity-style “safety net” for the poor.

That said, the structural reforms enacted by the Welsh executive, rowing back from competition and the private sector, have not served the Welsh people well. Structures do matter; they can enhance patient choice and deliver greater productivity and efficiency. There has never been a completely pure “publicly owned, publicly funded NHS” as the leftist rhetoric has it: patients are taken to hospital in ambulances built by the private sector, given drugs from the private sector and examined by MRI scanners provided by the private sector. Private companies have always been intimately involved with the NHS.

From Labour comes the emphasis, and some exaggerations, on cash. A fact (understandably) too seldom acknowledged by the shadow Health Secretary Andy Burnham and his allies in the unions is that Tory governments do not “cut” the NHS, at least not in the crude terms often portrayed. Even the Thatcher government, supposedly hell-bent on the destruction of this socialist totem, increased spending on the NHS in real terms, as has the Coalition, though marginally.

Still, the service is underfunded. Most of the trusts in England and Wales are already in deficit. If they were companies, they would have had to cease trading. They are not, of course, because it would be unthinkable to allow a hospital or clinic to go bust. That, by the way, is why the disciplines of market forces cannot be readily applied to the NHS, something that prophets of marketisation usually find it convenient to ignore.

Funding evidently does matter, and it is worth rehearsing why. Our ageing population means more and more older people requiring more and more treatments for longer and longer. Second, medical treatments – drugs and technologies – tend to rise in cost much faster than inflation more generally. The traditional remedy for this has been rationing. This is often done informally by medics restricting treatments where it is simply not sensible; at the macro level, as a matter of policy, it has fallen to the National Institute for Health and Care Excellence to determine whether, for example, expensive fertility treatment is appropriate in certain cases.

These choices are likely to become more acute, to the point of unsustainability over time, simply because as taxpayers and patients we demand that the best treatment is made available to us. What we do not demand, of course, is that we are taxed more to pay for them.

The basic idea of the NHS is conducive to a world of financial restraint. In many ways, the NHS is economically efficient. As the Wanless report found a decade ago, the NHS is a relatively low-cost operation by international standards precisely because it tends towards a standardised provision of service – a Model T Ford concept, with not much choice but low costs. Thus, we devote a surprisingly small proportion of GDP to the NHS as a result.

Unfashionable as it may be to point out, the only politician to have argued that both funding and reform matter in public services was Tony Blair. Echoing him, faintly, the most sensible, balanced contribution to the past week came from the new CEO of NHS England, Simon Stevens. He was clear about the financial realities facing the NHS and the reforms that need to take place to make sure the extra funding, if it ever materialises, is spent most usefully. Refreshingly, this was not about yet another grand reorganisation, which has never yielded the results promised, but many smaller initiatives, such as increasing the services GP practices offer and integrating social and healthcare. If only we could vote for Mr Stevens.

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