By Kailash Chand
Tribune Magazine
Monday, November 1st, 2010
The Institute for Fiscal Studies has exposed how the cuts proposed under the Comprehensive Spending Review will harm the economy as well as the most vulnerable in society. David Cameron and Nick Clegg continue to insist their proposals will create a fairer society. They intend to increase VAT, which is regressive, and say that they are doing this in the interest of fairness. They cut benefits to the poor and say this is in the interest of fairness. They cut child benefits and insist this is fair. They announce nearly 500,000 job losses, condemning many to life on the breadline, and claim this will lead to a better future.
The president of the British Medical Association, Sir Michael Marmot, in his address to World Medical Association’s general assembly in Vancouver, described this is a ”grotesque parody of the word fairness”. It is likely that this aspiration for fairness, however laudable, will come to haunt the coalition.
Another false impression perpetuated by the Government is that the National Health Service has been spared the scalpel wielded by George Osborne. Although the NHS budget has been relatively protected, the health service still has to find cost savings of ÂŁ20 billion by 2014. This is already resulting in cuts to services, staff and rationing of elective treatments such as cataract surgery and hip replacement operations.
The assertion that NHS spending will grow in real terms is baseless: a commitment to a 0.1 per cent real-terms rise in annual spending — just about the lowest level that could still claim to honour the Government’s pledge – is neither here nor there. With inflation in healthcare currently running at more than 4 per cent, the health service’s purchasing power for drugs and equipment will suffer significantly. Considerable money from the NHS budget will have to be siphoned off to help to pay off debts accrued from the Private Finance Initiative. The annual charge that the NHS pays for acute PFI facilities is about 11-18.5 per cent of hospital turnover, compared with 5-8 per cent for non-PFI facilities. This produces an affordability gap that is filled only by diverting money from patient care and creating new pressures for hospital, community and primary care service closures in the medium and the long term.
There is also the wide-scale pay decrease that staff have to contend with at a time of rising family expenditure and a potential threat to pensions. Further, the free prescriptions for the long-term ill, one-to-one cancer nursing care and one-week waits for cancer diagnostics promised by the last Labour Government are being scrapped.
The £2 billion announced for social care is another economic deception, since £1 billion of it will actually be drawn from the current NHS budget – and an additional £1 billion a year will be added to the personal social services grant to local government. However, the reality is that this money is not ring-fenced and hence there is no guarantee that it will be spent on social care. Research to be published by the Nuffield Trust next month reveals how social care can substitute for hospital care and vice versa by helping to reduce admissions or earlier discharge from hospital. It is vital that social care is funded adequately – otherwise there will be even greater pressure on health budgets. Cuts of billions of pounds to local government budgets could have a knock-on impact on NHS services.
The overall effect of all these measures on healthcare is set to be a declining share of gross domestic product, which is unlikely to be enough to keep pace with the demand for services, fuelled by the spiralling costs of managing diseases such as obesity, depression and diabetes. Cuts in expenditure in other areas, such as welfare benefits, will also have a knock-on effect on demands on the NHS.
Vulnerable groups often have complex health needs and it is essential that help remains available to them.
The white paper reforms will use much of the financial resource to stimulate the private sector and transfer or outsource large numbers of healthcare initiatives and jobs to the private sector.
Competition will become an ideological end in itself. Monitor will become a quango with a remit to ensure there is competition in the NHS and to intervene if there are signs of anti-competitive behaviour. In addition, the Government’s policies will generate demand for the healthcare insurance industry, as rationing will increase due to the financial pressure. The Nuffield Trust research suggests that GP commissioning may add £1.2 billion to NHS expenditure, which is not factored into the Government’s aspiration for change.
The NHS has not faced this level of challenge in its history. The universal healthcare provided by the NHS is in serious danger of becoming unsustainable. Even at this stage, David Cameron, who pledged his loyalty to the NHS before the general election, needs to halt this futile and expensive reorganisation that threatens to bring in privatisation through the back door.
The electorate wants modernisation of the NHS, not its destruction. If the coalition truly wants to reduce waste and inefficiency, it should abandon the mantra of competition, market forces and choice of provider and instead work towards developing a co-operative and integrated healthcare system, with collaborative commissioning at the heart of how precious resources are utilised.
Kailash Chand is chairman of Tameside and Glossop primary care trust
http://www.tribunemagazine.co.uk/2010/11/the-nhs-is-in-the-danger-zone/