Finding the sweet spot

The last month or so has seen some significant strides forward in terms of addressing the sustained NHS funding shortfall. The government has previously met demands for more funding– from lobby groups, commentators and the public – with claims that funds have already been increased (both in the spending review settlement and additionally in last November’s Budget). So it was a major breakthrough to see the prime minister personally promise to bring forward a long-term funding plan for the NHS.

Theresa May’s actual comments, at the very end of March, were made to the Commons Liaison Committee. She said that a long-term plan that built on the Five-year forward view would be supported by a multi-year funding settlement. She added that the NHS could not afford to wait until next Easter and the next spending review, and suggested that an answer was needed in this the service’s 70th anniversary year, with any solution ‘also ‘properly joined’ with social care.

The service has breathed a collective sigh of relief. Demand has continued to rise in general, as a result of a growing and ageing population. But the impact has been particularly noticeable over this past winter. In the face of this demand, access targets have been slipping. And while the service has delivered significant levels of efficiency – with productivity outperforming the wider economy – finances have continued to deteriorate.

Subsequently, a cross-party group of MPs has called for a ‘second Beveridge moment’ by using national insurance contributions to fund the NHS. There have also been reports of health secretary Jeremy Hunt writing to Conservative MPs for their views on how to fund the NHS.

But the source of funds is really of secondary importance. Clearly, it is a practical issue that needs to be resolved, but whether funds come from taxation or national insurance is a matter of presentation not substance for most members of the public. The recent British Social Attitudes survey suggested that more than six in 10 voters are willing to pay more tax to increase funding for the health service – which tax pot was not an issue.

The real question is how much funding the service needs. The government has been more tight-lipped about this, other than to dismiss newspaper suggestions of a £4bn-a-year funding boost as premature speculation.

Ms May told the Liaison Committee that the new plan should allow the NHS to realise greater productivity and efficiency gains.

This is the crux of the issue. No-one would disagree that there are inefficiencies within the NHS, relating both to support services and clinical variation. Programmes such as Getting it right first time and tools such as the Model Hospital and patient-level costing give the service a fighting chance of addressing some of these.

And new models of care and integrated care systems are starting to show that they can bend the demand curve and meet patient’s needs more proactively and cost-effectively. But these improvements won’t be turned on overnight.

In fact, if funding is insufficient to meet current demand, it will simply postpone some of the improvements that the NHS could realistically make.

Unrealistic control totals would restrict clinicians’, support staff’s and managers’ vision to the here and now. It would be a case of getting through to the next milestone, not planning for a sustainable future. There would be no headroom to enable clinicians and finance managers, for example, to work together to understand variation and find ways to address it.

There is clearly a sweet spot of NHS funding that the government needs to find. On the one side, this needs to put legitimate pressure on the service to reduce costs and improve productivity. But this must be balanced with realistic funding that enables the service to both meet current demand and develop services that will be sustainable into the future.