ow many times have you read that the NHS is bust? No need for answers on a postcard: I can tell you.
Over 2015, the number of national newspaper headlines featuring “NHS” alongside the words bust, deficit, meltdown or financial crisis came to a grand total of 80. Call this the NHS panic index – a measure of public anxiety over the viability of our health service. Using a database of all national newspapers, our librarians added up the number of such headlines for each year. The index shows that panic over the sustainability of our healthcare isn’t just on the rise – it has begun to soar.
During the whole of 2009, just two pieces appeared warning of financial crisis in the NHS. By 2012 that had nudged up a bit, to 12. Then came liftoff: the bust headlines more than doubled to 30 in 2013, before nearly tripling to 82 in 2014. Newspapers such as this one now regularly carry warnings that our entire system of healthcare could go bankrupt – unless, that is, radical change are made. For David Prior, the then chair of the health watchdog the Care Quality Commission - and now health minister, that means giving more of the system to private companies.
This means that the press and political classes are now discussing a theoretical impossibility. Think about it for a moment, and you realise the NHS can’t go broke. It’s not an endowment with a set pot of cash, but a giant service with a yearly budget. Unlike a business, it doesn’t need to raise money from sales – as taxpayers and voters, we have the final say over how much funding it gets. This panic isn’t economic at all, but politically created.
The balance to be struck with the NHS, as with all public services, is between how much cash we sink into it and how much we expect in return. Give the NHS less money, get less healthcare. Give it more, and the opposite happens. As Rowena Crawford at the Institute for Fiscal Studies says: “Financial stability just requires that healthcare demand and expectations are constrained to match the available funding.”
And that right there is the rub. Because the NHS is enduring the sharpest and most prolonged spending squeeze in its history – even while the government pretends no such thing is happening and the public expect the same service. Our health service is where all the paradoxes of austerity come home to roost.
This may seem an odd thing to say. Isn’t the NHS one of the very few parts of the public realm to be sheltered from this decade’s cuts? Didn’t David Cameron promise before the last general election to “protect the NHS budget and continue to invest more”?
The figures suggest otherwise. True, the NHS is seeing a rise in its funding. Between 2010 and 2014, health spending went up 0.8% each year, adjusting for inflation. A plus sign in front, granted, but a teeny-tiny one – since its creation in 1948, the health service has never had it so bad. Over this decade as a whole, that allocation will amount to 1.2% a year, which is way down on the average 3.7% that health spending grew each year between 1949 and 1979. And, coming after the 6.7% extra that Gordon Brown was shovelling in annually by the time of the banking crash, it feels like a recession.
So on the one hand, you have a healthcare system that can cause even the most secular of Brits to get religion, that can drive Telegraph-reading colonels to channel their inner Nye Bevan – hell, that even beats Justin Bieber to a Christmas No 1. And on the other you have a Tory prime minister who wants to cut public spending but knows that harming the NHS will be electoral poison.
Put the two together and what do you get? A dangerous muddle of overspending, frontline service cuts and political self-denial.
Cameron pretends the NHS isn’t on austerity rations and expects it to do the same work to pretty much the same targets. The various parts of the NHS try to do just that with a budget smaller than they need, with the result that they begin missing targets and making cuts even while breaking their budgets.
Take the A&E waiting times. Under Labour, the old rule was that 98% of patients must be seen within four hours. Soon after Cameron moved into Downing Street in 2010, the target was watered down to 95% of patients – even so it is now routinely missed. The number of patients stuck on trolleys in A&E, while staff try to find them beds is now at levels that “no civilised society should tolerate”, according to the Royal College of Emergency Medicine .
Even while falling short, arm after arm of the NHS is now in the red: 95% of hospital and other acute care providers in England plunged into deficit in the first half of the financial year starting in April, joining 80% of ambulance providers and 46% of those in mental health.
You might treat all this as argument for NHS staff to be more productive. Except that, as John Appleby of the King’s Fund thinktank argues, they are. He calculates that, had NHS activity only gone up in line with government money, between 2010 and 2015 it would have treated 3.7 million fewer outpatients and 4.5 million fewer A&E patients than actually got seen.
This is productivity as doing more with less, which is almost always unsustainable. A real increase in productivity would come from doing things differently. There’s certainly scope to do that – by doing more phone consultations with GPs, perhaps, or upgrading technology. One joke among NHS professionals runs that, in all of China, there’s but one factory left still making fax machines, and that its only client is the NHS. But this sort of change is never going to come in an organisation now in a frenzy of cost-cutting.
One example of NHS austerity’s screwy logic is its sudden reliance on expensive agency staff. This, says Anita Charlesworth of the Health Foundation charity, is a direct result of staff pay freezes and overwork: “If you’re a permanent member of staff and you’ve had no pay rise and you’re demoralised and disengaged you can resign from the NHS, you can go on an agency book, you can pick your shifts, you can pick your wards and you earn more.”
The result is that agency staff costs are rising at over 25% a year.
Meanwhile, NHS England pretends it can cap hospital deficits for the year at £2.2bn – even though in the first six months alone that hadalready hit £1.6bn . Some of Britain’s biggest and most renowned hospitals are now actively planning on ending the year in the red. And Appleby points out that everything from patient time with doctors and nurses to repairs of your local hospital’s roof is being sacrificed in order to do the same work with less money.
“I can see another Jennifer’s ear coming,” Appleby says, referring to the five-year-old with glue ear who waited a year for a simple operation and ended up being used by Neil Kinnock to attack John Major on health spending. “Only this time it probably won’t be something as innocuous as glue ear. It might be a child who dies of cancer because their medical care has been so drastically cut.”
As societies get richer and older, they spend more on healthcare. Compared with nearly everyone else in western Europe, the UK spends much less of its national income on health. By the end of this decade, we will be even further behind. Meanwhile, pundits will continue to claim the entire system is unaffordably expensive, even while the public still want and need doctors and nurses, their medicines and operations.
This is the paradox of austerity: pretending that you can scrap and scrimp on the services and institutions that make you a civilised country, without making your country less civilised.
Monday 8 February 2016 12.15 GMTAditya Chakrabortty