Within days of the new coalition government taking power the Chancellor outlined his initial plans to reduce the UK’s colossal budget deficit. Although the £6bn of proposed savings is a mere drop in the ocean (the deficit is running at over £160bn, or in other words more than 10% of our national gross domestic product) it was a sure sign of things to come.
Very few doubt that the coming years are going to see marked reductions in the amount and scope of public spending, but the big uncertainty is what impact this will have upon the provision of healthcare services.
During the election build-up all three parties went to great lengths to affirm their commitment to maintaining current levels of NHS funding. The harsh reality, however, may be rather different. The UK spends approximately £118bn a year on healthcare. Compare this number with that of the budgetary deficit and its not too difficult to see where a significant chunk of savings could potentially come from.
As well as this it is clear that the new government has its own ideas as to how healthcare provision in the UK should be managed; witness the immediate halting of NHS London’s planned service reconfiguration by the new Health Secretary Andrew Lansley.
Undoubtedly there are “backroom” efficiency savings that can be made within Europe’s largest employer, but are they going to be enough to stave off the hunger of the deficit beast?
Jonathon Brazier, a GP in Hertfordshire thinks not. He says that efficiency savings are “all that anyone has been talking about for years” and certainly in general practice it is hard to see where any further cost savings can be made. He has already been told to cut referrals by 40%, which is unlikely to improve our quality of care. He’s not sure how much frontline services will be affected, but the waits for operations and outpatient appointments are sure to increase.
If we do find that frontline services are affected by public spending cuts history tells us it is unlikely to have an appreciable impact on demand for private medical insurance (PMI). Penetration of PMI in the population as a whole has stayed relatively constant over a number of years and doesn’t appear to be significantly affected by the prevailing economy. This doesn’t mean that that it’s a no-win situation for providers of private medical services, but if the private sector does want to attract new customers they will have to be more creative in tailoring their existing products, as well as introducing new “niche” products into the marketplace. These may take the form of specific “top up” insurance policies, such as the cancer drug top-ups that some are already offering, or disease specific policies, that cover an individual for treatment if they develop a specific condition. Providers of private healthcare services may find an increasing consumer desire for them to shoulder some of the potential financial risk and provide more flat fee “all inclusive” packages for operations like coronary artery grafting, hip replacement and cataract surgery.
Although very few people talk about it, some difficult decisions need to be made by the NHS in the months and years to come. It is clear that everyone cannot have everything, unless of course we all agree to spend a greater proportion of our GDP on delivering healthcare. One thing most agree is that this is not on the cards. So, what of expensive new cancer drugs, cosmetic procedures and infertility treatments, to name but a few areas?
Rajiv Grover, a consultant surgeon who now practices exclusively in the private sector, says there is a “fair amount” of non-essential surgery which is carried out by the NHS. He believes that there are a lot of procedures which are not related to ill health and unless major psychological issues can be attributed to them should not be treated on the NHS.
Here also lies an opportunity for the private sector. If private healthcare providers can demonstrate not only consistently high quality services in these areas, but also value for money, there should be no reason why the NHS could not contract out such services. Decisions could then be taken as to whether they include an individual “top-up” component that is either self-funded or covered by an insurance policy.
Grover believes that if the government was to bring back tax relief on private health insurance it would encourage greater uptake, which would alleviate some burden from the NHS. Although in the longer term this makes perfect sense, with the economic austerity measures being put in place it is difficult to see the government offering up tax breaks at the current time.
Other longer term initiatives may also suffer. The fear is that the deficit reducing imperative will mean that investment in the still relatively nascent area of population health management and disease prevention will suffer. And although this will save money in the short term it is a strategy that is unlikely to ultimately deliver sustained population health improvements.
It is clear that we have difficult times ahead. The state of the public finances is such that there are no alternatives other than to drastically reduce expenditure and along with this come tough decisions on how we spend our reduced pool of money. There needs to be robust public dialogue around this whole area, and what I have found somewhat surprising is that this does not appear to be occurring.
Clearly there are no right or wrong answers and all that can be proffered is informed guess work, but I have been struck by how few of my colleagues are willing to speak out and give their opinion. There appears to be a tangible fear in the health service of “saying the wrong thing”. The delivery of healthcare in the UK has become heavily politicised and this has translated into an Orwellian fear in front line staff. The practice of medicine is all about questioning and probing for answers; stifling debate cannot be a good thing for the delivery of cost effective and high quality services.
Dr Peter Mills runs Glasslyn Health Solutions and is a leading authority on population health management. He is also a specialist in respiratory medicine and is on the General Medical Council’s specialist register. He still practices medicine part-time at the Whittington Hospital in northLondon.