How to save the UK’s National Health Service

The Royal Family, Houses of Parliament, Oxford and Cambridge Universities… When it comes to iconic institutions, the UK is still a world leader. Yet for a vast number of British people, the most iconic and treasured of all of the country’s institutions is its National Health Service (NHS).

Launched in 1948 by health secretary Anuerin Bevan, it was soon widely upheld as the ‘envy of the world’, providing hospitals, doctors, nurses, pharmacists, opticians and dentists in a service that would be free for all at the point of delivery.

While some things have changed slightly – the introduction of charges for prescriptions, dental care and eyecare for some – the core principles of the NHS have remained the same from its inception: to provide a free healthcare service to all in the UK, (almost) completely financed via taxation and National Insurance contributions paid by UK residents.

However, it ranked just 15th out of 35 in the Euro Health Consumer Index (EHCI) 2016, published by the Health Consumer Index. The EHCI assesses European health systems on 48 criteria, including patient rights and information, access to care, treatment outcomes, range and reach of services, prevention, and use of pharmaceuticals. This was even behind the Czech Republic and Portgual, which have much smaller GDPs per capita.

So what has gone so wrong? And more, importantly, what is needed to put it right?

The NHS today: diagnosis, causes and concerns

The EHCI report cites that the NHS has ‘an autocratic top-down management culture’, while it has received criticism for long waiting times, mediocre outcomes and access to certain types of treatment and drugs from various sources. While the 2014 NHS Five Year Forward Review acknowledged that there have been improvements in certain areas of the NHS over the past 15 years – including cardiac and cancer outcomes and reduced waiting times – it’s widely acknowledged that getting a GP appointment is difficult, accident and emergency departments are struggling under pressure, access to treatment varies according to where you live, and non-urgent operations and procedures are often cancelled.

Financially, the NHS is under stress, having ended the 2015/16 financial year with a deficit of ￡1.85 billion – the largest aggregate deficit in NHS history, according to leading UK health and care charity, the King’s Fund. This coming year promises to be even more challenging, as demand for care continues to increase.

Financially, the NHS is under stress, having ended the 2015/16 financial year with a deficit of ￡1.85 billion – the largest aggregate deficit in NHS history, according to leading UK health and care charity, the King’s Fund.

Ageing population

One of the main challenges is the ageing population – helped, of course, by advances in medicine. Vaccination programmes for children and antibiotics have seen off previous child killers over the past few decades. Improved diagnostic techniques and better general health education mean that serious conditions are likely to be diagnosed earlier than ever, when they are more treatable. A reduction in the number of people smoking has also made a difference to risks for certain serious conditions such as circulatory disease and some cancers, while better treatments have improved survival rates.

All this means that people are living longer than ever. According to the UK’s Office of National Statistics, the average life expectancy at birth in 2013 to 2015 was 79 for a man and 83 for a woman – compared with 65 and 70 respectively in 1948. The longer people live, the more healthcare they will need over a longer period of time – and the gradual increase in life expectancy looks set to continue.

Growing demands

However, increased demands on the NHS are not solely down to rising numbers of elderly residents. Lifestyle changes such as physical inactivity, unhealthy diets and increased alcohol consumption have resulted in a rise in obesity and associated diseases such as type 2 diabetes, liver disease and certain types of cancer. Many people are living with chronic conditions requiring ongoing treatment and support. There are now more than seven million people living with cardiovascular disease and four million with diabetes in the UK – out of a population of 65 million.

In 1948, the purpose of the NHS was to treat disease. Now, its remit includes vaccination programmes for children, the elderly and vulnerable people; contraception, antenatal and maternity services; national screening programmes for conditions such as cervical, breast and bowel cancers, mental health and social care.

Added to that, medical advances have meant that the cost of diagnostic tests, medical procedures and drugs, such as the latest cancer medication, have risen sharply.

However, these challenges are no different from those faced by other European countries.

Cost pressures

Basically, it’s down to investment – or lack of it – and also the way the money has been used.

In real terms, NHS investment is lagging behind that of many European countries. In 2000, when UK healthcare spending was 6.3% of GDP, the then Prime Minister Tony Blair committed his government to raising it to 8.5%, which was the average spend as a percentage of GDP in the rest of the European Union (EU). While this was achieved by 2009, the EU average investment had by then increased to 10%. And the gap will continue to widen according to the King’s Fund, which predicts that at the current planned spend, investment will drop back to 6.6% by 2020/21.

With limited resources, NHS trusts and management face difficult decisions on a daily basis on where to best point those resources, and who can and who cannot receive the treatment that they need.

In 2016, cuts and proposed changes to working practices saw junior doctors involve themselves in industrial action – similar disgruntlement has also led to a number of skilled doctors and nurses leaving the NHS completely to work in the private sector, or take their talent overseas. A shortfall in qualified staff has been partially blamed for rising costs as hospitals have been forced to hire expensive temporary staff. In 2013/14 the number of permanent staff rose by 2.3% compared with 16% for temporary staff, according to data from UK charity, the Health Foundation.

In 2013/14 the number of permanent staff rose by 2.3% compared with 16% for temporary staff, according to data from UK charity, the Health Foundation.

The 1.2m employees working for the NHS benefit from one of the few remaining final salary pension schemes, paid out of current taxation instead of savings. With roughly one 40th of the NHS retiring each year and living longer, the retirement burden goes up by 30,000 people a year or an extra ￡300 million in pension demand.

Just as there’s not one sole element causing all of the issues within the NHS, there’s not one ‘silver bullet’ remedy either. But there are certainly areas of the NHS that could be improved, and maybe the private sector can play its part in that recovery.

Saving the NHS

Anyone suggesting that the NHS should become fully privatised is likely to be hounded out of the UK – the ethos of the service is that it remains free and funded mostly by taxation. But that model is slowly becoming outdated and unworkable.

It’s time to look to alternative solutions that have proven successful in other territories. The Netherlands, which was ranked number one by the EHCI in 2016, has consistently been among the top three in the total ranking of any of the European Indexes published by the Health Consumer Powerhouse since 2005. It combines elements from both private and public healthcare systems.

Interestingly, the EHCI claims that the so-called ‘Bismarck’ health systems – like that followed in the Netherlands – which are based on insurance from a range of private providers that don’t provide healthcare, delivers much better results than systems such as the NHS, where one body funds and provides all the care. This is also a view reflected by UK think tank, the Institute for Economic Affairs (IEA).

However, it’s important to note that this insurance system is not like that of the US. It’s a social health insurance, regulated by the government, and doesn’t make a profit. In the Netherlands, it’s compulsory for everyone and all insurers offer the same standard package. By law, they must accept anyone who applies for the package and must charge all policyholders the same premium, regardless of age or health, plus an add-on income-related contribution. The insurance is usually financed jointly by employers and employees through payroll deduction, and there’s a government allowance to help people on low incomes. If you have extra money to spare, you can choose to take out additional health insurance, covering things such as dental care and physiotherapy. While doctors and hospitals tend to be private, tight regulation gives the government much of the cost-control power that the NHS provides.

In the Netherlands, health insurance is compulsory for everyone and all insurers offer the same standard package.

Similarly, national health insurance models followed in Canada, South Korea and Taiwan, use private sector providers, but payment comes from a government-run insurance programme that every citizen pays into. This means there’s no need for marketing, no profit and no financial motive to deny claims. Canada has been so successful in negotiating low prices from pharmaceutical companies that Americans often buy pills from their nextdoor neighbour.

What this demonstrates is that the private sector can work successfully alongside a national programme. The NHS in the UK faces some tough decisions, and simply doing nothing is no longer an option. Private providers, in partnership with NHS trusts could take some of the burden off the hands of the UK’s creaking health system. The Netherlands has proved that this is more than viable – it’s actually successful. Germany and Belgium, which rank higher than the UK in the EHCI, are also following a similar system.

Future health

Without doubt, the world is very different than it was in 1948. Today we face different pressures, diseases, population dynamics and lifestyles. We can also reasonably look forward to longer, healthier lives than our recent ancestors.

But that all brings a different set of problems. Today’s NHS is struggling to fulfil its basic core principles of free health care for all in a timely fashion and is sadly lagging behind its neighbours in areas such as cancer survival and avoidable deaths, according to data from the IEA. Even the Commonwealth Fund, which in 2014 named the UK’s health system as the best performer out of 11 nations, ranked the country as second to last for health outcomes.

To put it simply, the model no longer serves the needs. The NHS is held very dearly in the UK – and rightly so. But maybe it’s time that other options were explored.

It’s nearly 70 years since the NHS’s inception. Times have changed. It’s now important that the NHS changes too.