A bitter pill to swallow - Funding the UK’s health system now and into the future

A recent report tells us that the NHS needs a significant increase in funding to deliver both today’s Health and Social Care requirements and to meet the expectations of the future. However, more money alone will not solve the problems.

The National Health Service will be 70 early next month (5th July 2018), and the Conservative Government will use this milestone to both celebrate its success and to deliver a new funding formula that will claim to sustain the healthcare system into the future ("May to unveil £20bn a year boost to NHS spending"). However, it is likely to fall short of the recommendations from the joint report by Institute for Fiscal Studies and the Health Foundation, “Securing the future: funding health and social care to the 2030s” and will continue the uncertainty of how we resource the health system (there are questions about how it is to be funded). Whilst all political parties know that funding for the NHS is a vote winner, the scale of the problem and the sums involved to cover both what is required now and what will be required looking forward are gigantic (4% real term increase to cover both today’s shortfall and the needs of the future); and this is already on top of significant increases to health budgets over the past 15 years. While opinion polls have suggested that people would be prepared to pay more tax to fund the NHS, the reality is not that clear cut.

First and foremost, for politicians to even raise the discussion of changes to the current way of running the NHS is viewed with suspicion and quickly becomes a toxic, vote losing initiative. Hence, we have all major political parties promising ‘a fully funded’ Healthcare System, with little talk of change. There is just one problem with this approach: It is not going to work and will only continue to disappoint and deceive the electorate, those who work in the healthcare sector and the patients themselves. What is needed, alongside further funding, is a radical look at what is truly sustainable and achievable, because the requirements of an NHS created 70 years ago are radically different from now. In the military, this would be called ‘A Question 4 Moment’, which asks military leaders, “since receiving your orders, has the situation changed?” In the case of the NHS, we can clearly state that it has.

The healthcare needs of a developed, 21st Century society pose huge problems for a state funded healthcare system like the NHS. As many younger and middle aged people either choose to live unhealthy lifestyles, (or who have little choice given their circumstances), as the percentage of the elder population grows (with an increase in chronic conditions associated with old age), as medical advancements offer more (but at an additional financial cost) and as the Service remains ‘free at the point of delivery’, the demand becomes effectively limitless. Further problems, such as medical staff shortages, the increasing pressure for doctors and nurses, the disproportionate increasing cost of training, equipment and drugs, and the fraud committed by health tourists, make the situation even worse. It is clear that under this current construct, it is unaffordable now and will be in the future. To counter just today’s problems, health and social care managers and health leaders and bodies such as NICE, have to make tough daily decisions on how healthcare is effectively rationed, something that is known in Government as ‘the priority of neglect’.

Last by not least is the claim of the willingness of public to pay for the recommended resources that the health system needs. Whilst there is a growing consensus that the public might be happy paying more tax in return for better healthcare, there are problems with his assumption. Clearly, more tax means less disposable income for tax payers, with all the effects this would have for the wider economy; but this is not the major issue. The greater conundrum is that any future tax rises are going to be largely met by the younger, working population, with much of the additional tax raised going to help the elderly in their health and social care needs. The perception created by such a construct will be that this ageing population, that benefitted in their own younger days of a lower tax economy, with the benefits of free healthcare, will be then supported by the younger generation, who are already worse off than the previous generation in terms of comparative salaries and who have also to contend with higher house and rent prices and the near criminal student loans policy (graduate tax). Clearly, over a projected period, raising more taxes to help fund the needs of the ageing population will not deliver a contented electorate. Thus, some new, fresh thinking is required, however toxic this subject might be; and it is going to require strong leadership and moral courage from across the political spectrum. If you want a little fun, try using this tool to see how you would raise the extra funds that the NHS needs. There are no easy answers.

So what are some of the ideas that ned to be discussed? Let us start by admitting that more funding will be required, whatever choices are made - so there is no denial here. However, on top of an increase in funding, the following factors must be addressed:

The ageing population. The ethical question How we both look after the elderly, and pay for care in later life has already scarred the Conservative Party, after the Prime Minister’s funding proposals (dubbed the 'Dementia Tax') were met with hostility from her own party. However, the subject will not go away. The role of the family in looking after the elderly should be debated (when is it right to move elderly relatives to care homes etc?) The sensitive subject of legalising assisted dying in the UK, where 82% of the population support a change in the law, needs to be debated and action taken by Parliament. In addition, the care home system is on its knees and the sustainability to recruit staff into the care sector is getting harder. Tighter restrictions on immigration post Brexit will also be a factor in finding workers. 

Balance of Primary, Secondary and Tertiary Care (Health Care) and Social Care. Closely connected to the issue of an ageing population is the relationship and funding separation between Health Care and Social Care. Currently the funding is separate, yet funding one without funding the other makes no sense and a holistic NHS of the future needs to work as one and hence funding must be linked, so that hospital spaces are not occupied by the elderly awaiting transfer to 'the community', or Accident & Emergency (part of Secondary Care) is overwhelmed by patients who no longer want to wait to get an appointment with a GP (Primary Care). 

Unhealthy lifestyle choices. On the one hand we have medical breakthroughs help us to survive once fatal diseases and conditions (and thus allow us to live longer and better lives), and on the other, we have a ‘time bomb’ situation, where many people have self-induced health problems, that are well known about by government, yet little is done to reverse the trends and habits and prevent further damage (the exception here may be the reduction in tobacco smoking). Thus we have a healthcare system demanding more money, when part of the problem is being caused by unhealthy lifestyles. Up until recently, governments have been reluctant to intervene on such subjects as junk food, alcohol consumption and high sugar intake, but the penny is now starting to drop.

Role of Health Technology. Medical breakthroughs, new surgical techniques, predictive analysis, disease prevention, robotics and a host of other innovations continue to arrive and give people the ability to live longer and healthier lives and in many cases, reduce the cost of procedures (or even prevent the need for surgery). It is this area that may hold many of the answers to funding shortfalls. However, it will need investment up front (spend to save) and it will need further investment in technology and a deliberate drive to promote innovation in the NHS.

Principle of the NHS’s ‘free at the point of delivery’. Possibly the most toxic subject that can be raised on the NHS is the principle that it should be free to all, regardless of wealth or background. However, the point remains that any service that is free will be treated with less respect than a service that does incur some sort of cost, such as a fee to go to Primary Care, (e.g. a GP). Whilst this might not have to apply to all people or to all situations, a realisation by those entitled, that any Health Care is not 'free' and has to be ultimately paid for by taxpayers is an essential part of a new principle to set the NHS on a sound footing.

Role of the Private Sector. 'Privatisation of the NHS', so often an allegation thrown between political parties, is really far from the news on the NHS. Whilst there have been some huge blunders over the handling of contracts with private service providers, there are plenty of services being delivered right now by the private sector for the NHS. Closing down this option, so often seen as a vote winner, is not helpful and may push up the cost and reduce levels of Health Care service. Private healthcare needs to be part of the mix, but needs to be properly governed.  


None of any of the factors and suggestions listed above will be easy to discuss and find resolution to, as the current and longest serving Health minister, Jeremy Hunt, will attest to. If the UK wishes to both protect the NHS and solve the looming Health and Social Care crisis, then funding alone will not suffice. Leaders from both Parliament and from the Health Care sector need to bury their own political opinion and work together for the long term good of the country and the NHS. 

SixFigureGrid - Navigation through the 21st Century

Know where you are; understand what is going on

Perception | Scale | Tempo | Ethics | Security | Innovation | Uncertainty

Contact us