Comment
The outlook for public spending on the National Health Service
www.thelancet.com Vol 385 March 28, 2015
Such an £8 billion annual funding increase by 2020–21 will not be as difficult to achieve as it might seem. First, this figure is in 2020–21 prices, and so adjusting for economy-wide inflation between now and then would reduce it to £7 billion in today’s prices. Second, the NHS budget is already around £2 billion higher in 2015–16 than it was in 2013–14.6 This leaves around £5 billion more to be found by 2020–21, which would be less than the increase in the Department of Health budget over the current Parliament. Why are politicians so unwilling to commit to providing this funding increase for the NHS in the next Parliament? The essential problem is that whoever forms the next UK Government still faces the challenge of reducing borrowing in the next few years. The spending plans of the Coalition Government that were published in the Chancellor of the Exchequer’s Budget, on March 18, 2015, indicate that overall departmental spending on public services will be cut by a further 7% between 2015–16 and 2019–20.7 Increased spending on the NHS in this context would imply that much greater cuts will have to be found from other public services: we estimate cuts of around 12% on average if the NHS gets the money Simon Stevens is looking for. Moreover, many of these other public services also face demand pressures from population growth and cost pressures from real wage growth. Of course, these plans for how to reduce public borrowing could change depending on the result of the election. For example, under the Conservative Party’s latest plans, departmental spending could be cut by just 4% over the next Parliament as a result of higher borrowing and cuts to welfare spending.7 The outlook for departmental spending under the Labour Party could be even better, since their greater willingness to borrow might allow departmental spending to increase by 3%.7 The greater the level of overall spending on public services, the more would be left for other departments were NHS spending to increase in line with the recommendations of the Five Year Forward View. This is perhaps why it has been easier for the Labour Party to commit to spending more on the NHS than it has been for the Conservative Party. Any difference between the main political parties’ stance on NHS spending will become clearer by the time the polls open in May. Either way, it is important not to lose sight of the bigger picture. Even if the NHS receives
Adrian Roots
During the current UK Parliament of 2010–15, although total spending by government departments on public services has been cut by an average of about 10%, the Department of Health has seen its budget increased by more than 6%.1 This favourable treatment has increased the severity of the financial squeeze on other departments, with many having seen their budgets cut by 20% or more in just 5 years. In 2009–10, the Department of Health accounted for just over a quarter of all departmental spending, but in 2015–16 it is expected to account for nearly a third.2 This remarkable increase in Department of Health funding has attracted relatively little political attention. What is occupying the political agenda in the run up to the general election in May is the need for further increases in funding for the UK’s National Health Service (NHS) in the next Parliament. Only last week, the leaders of six medical royal colleges called on politicians to “formally commit to investing £8 billion a year more in the delivery of health care by the end of the next Parliament”.3 Repeated calls for above-inflation increases in spending on the NHS over the next Parliament arise from concerns over the demand and cost pressures faced by the NHS. The growing and ageing population increases demand for NHS services, as does the rising prevalence of chronic non-communicable diseases and the ability of the NHS to treat more complex conditions. In addition, the NHS typically faces above-inflation pressures on its budget from rising staff wages and high-cost drugs. NHS England estimates that these factors could amount to pressure on the NHS budget of around 3·5% per year.4 To meet these demands and cost pressures without reducing health-care quality would require either increases in real (inflation-adjusted) funding, increases in productivity, or both. If these pressures were met entirely by funding increases, the NHS budget would need to be around £30 billion higher in 2020–21 than it was in 2013–14.5 However, in the Five Year Forward View, NHS Chief Executive Simon Stevens has argued that average annual productivity improvements of 2·4% are possible, and, therefore, that the NHS needs an £8 billion per year funding increase by 2020–21 to meet budget pressures without reducing quality.5
1155
Comment
an £8 billion per year funding increase by 2020–21, productivity improvements of around 2·4% per year will still be required for the NHS to meet the demand and cost pressures it faces. Given that annual growth in NHS productivity in recent decades is estimated to be about 0·4–1·3%, these improvements will be a challenge.8,9 To what degree the NHS will be able to meet such a challenge is unclear, but doing so will be crucial if the NHS is to meet demand and maintain health-care quality over the coming years, irrespective of who wins the election.
2 3
4 5
6
7 8
*Rowena Crawford, George Stoye Institute for Fiscal Studies, London WC1E 7AE, UK [email protected]
9
HM Treasury. Public expenditure statistical analyses 2014. London: Stationery Office, 2014. Baker M, Dacre J, Richmond D, et al. The NHS needs an extra £8bn a year to survive and meet its challenges. The Guardian March 15, 2015. http://www. theguardian.com/society/2015/mar/15/nhs-needs-extra-8bn-to-survive (accessed March 20, 2015). NHS England. The NHS belongs to the people: a call to action—the technical annex. London: NHS England, 2013. NHS England, Care Quality Commission, Public Health England, Monitor, NHS Trust Development Authority, and Health Education England. NHS five year forward view. London: NHS England, 2014. Crawford R, Stoye G. Challenges for health spending. In: Emmerson C, Johnson P, Joyce R, eds. The IFS green budget 2015. London: Institute for Fiscal Studies, 2015: 176–96. Keynes S. Public services spending, IFS Budget 2015 analysis. London: Institute for Fiscal Studies, 2015. Massey F, Office for National Statistics. Public service productivity estimates: healthcare 2010. London: Office for National Statistics, 2012. Bojke C, Castelli A, Grasic K, Street A, Ward P. NHS productivity from 2004/05 to 2010/11. Centre for Health Economics, research paper 87. York: Centre for Health Economics, 2013.
We declare no competing interests. 1
Crawford R, Keynes S. Options for further departmental spending cuts. In: Emmerson C, Johnson P, Joyce R, eds. The IFS green budget 2015. London: Institute for Fiscal Studies, 2015: 151–75.
Viviane Moos/Corbis
Universal health coverage: not why, what, or when—but how?
Published Online October 16, 2014 http://dx.doi.org/10.1016/ S0140-6736(14)61742-6 See Series pages 1230 and 1248 See Online/Series http://dx.doi.org/10.1016/ S0140-6736(14)61494-X and http://dx.doi.org/10.1016/ S0140-6736(14)61467-7 See Online/Health Policy http://dx.doi.org/10.1016/ S0140-6736(14)61780-3
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The argument about universal health coverage (UHC) has been won, and won remarkably quickly. It was only in 2010 that WHO advanced the case for UHC in its World Health Report on health systems financing.1 That report triggered unprecedented demand from countries for advice and assistance about how to deliver UHC. As the end of the Millennium Development Goal era approached, advocates for UHC saw an opportunity to embed their vision for stronger and more equitable health systems into the post-2015 development framework. So far, they have succeeded. The Open Working Group’s proposal for the Sustainable Development Goals (SDGs) includes UHC within its draft health SDG—”Goal 3: Ensure healthy lives and promote well-being for all at all ages”.2 A sub-goal promises to “achieve universal health coverage, including financial risk protection, access to quality essential health care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all”. Although some donor nations and influential foundations have expressed doubt about the wisdom, let alone the feasibility, of UHC as an SDG, it seems almost certain that UHC will make it into international development objectives after 2015. But saying and doing are two very different things. The task of delivering UHC for countries most in need of resilient health systems has barely started. And it is in this realm
of complex policy making that little progress has been made. It is no longer a case of “why, what, or when” UHC. It is now about “how”. In setting out their vision for ending preventable mortality within a generation, Dean Jamison and colleagues3 offered the most rigorous framework yet for thinking about how to deliver UHC. They emphasised the value of “progressive universalism”, an efficient and fair means to achieve financial protection and coverage with essential health services.3 Progressive universalism signals a commitment to include the least well off from the very beginning of the journey towards UHC. Jamison and his team tried to answer the question about how to navigate one’s way across the famous cube of UHC—satisfying the three coordinates of proportion of population covered, proportion of population financially protected, and proportion of interventions provided. Their theoretical discussion offered a helpful thought experiment about the necessary trade-offs that are needed in designing policies to reach UHC. What this discussion lacked was a set of real world case studies of countries in the midst of their difficult quest to achieve UHC. The Lancet Series on UHC in Latin America begins to fill this gap. The Series,4–7 and an accompanying Health Policy paper,8 chart the complex political, economic, and social forces that shape health policy making in any society. www.thelancet.com Vol 385 March 28, 2015
The outlook for public spending on the National Health Service
www.thelancet.com Vol 385 March 28, 2015
Such an £8 billion annual funding increase by 2020–21 will not be as difficult to achieve as it might seem. First, this figure is in 2020–21 prices, and so adjusting for economy-wide inflation between now and then would reduce it to £7 billion in today’s prices. Second, the NHS budget is already around £2 billion higher in 2015–16 than it was in 2013–14.6 This leaves around £5 billion more to be found by 2020–21, which would be less than the increase in the Department of Health budget over the current Parliament. Why are politicians so unwilling to commit to providing this funding increase for the NHS in the next Parliament? The essential problem is that whoever forms the next UK Government still faces the challenge of reducing borrowing in the next few years. The spending plans of the Coalition Government that were published in the Chancellor of the Exchequer’s Budget, on March 18, 2015, indicate that overall departmental spending on public services will be cut by a further 7% between 2015–16 and 2019–20.7 Increased spending on the NHS in this context would imply that much greater cuts will have to be found from other public services: we estimate cuts of around 12% on average if the NHS gets the money Simon Stevens is looking for. Moreover, many of these other public services also face demand pressures from population growth and cost pressures from real wage growth. Of course, these plans for how to reduce public borrowing could change depending on the result of the election. For example, under the Conservative Party’s latest plans, departmental spending could be cut by just 4% over the next Parliament as a result of higher borrowing and cuts to welfare spending.7 The outlook for departmental spending under the Labour Party could be even better, since their greater willingness to borrow might allow departmental spending to increase by 3%.7 The greater the level of overall spending on public services, the more would be left for other departments were NHS spending to increase in line with the recommendations of the Five Year Forward View. This is perhaps why it has been easier for the Labour Party to commit to spending more on the NHS than it has been for the Conservative Party. Any difference between the main political parties’ stance on NHS spending will become clearer by the time the polls open in May. Either way, it is important not to lose sight of the bigger picture. Even if the NHS receives
Adrian Roots
During the current UK Parliament of 2010–15, although total spending by government departments on public services has been cut by an average of about 10%, the Department of Health has seen its budget increased by more than 6%.1 This favourable treatment has increased the severity of the financial squeeze on other departments, with many having seen their budgets cut by 20% or more in just 5 years. In 2009–10, the Department of Health accounted for just over a quarter of all departmental spending, but in 2015–16 it is expected to account for nearly a third.2 This remarkable increase in Department of Health funding has attracted relatively little political attention. What is occupying the political agenda in the run up to the general election in May is the need for further increases in funding for the UK’s National Health Service (NHS) in the next Parliament. Only last week, the leaders of six medical royal colleges called on politicians to “formally commit to investing £8 billion a year more in the delivery of health care by the end of the next Parliament”.3 Repeated calls for above-inflation increases in spending on the NHS over the next Parliament arise from concerns over the demand and cost pressures faced by the NHS. The growing and ageing population increases demand for NHS services, as does the rising prevalence of chronic non-communicable diseases and the ability of the NHS to treat more complex conditions. In addition, the NHS typically faces above-inflation pressures on its budget from rising staff wages and high-cost drugs. NHS England estimates that these factors could amount to pressure on the NHS budget of around 3·5% per year.4 To meet these demands and cost pressures without reducing health-care quality would require either increases in real (inflation-adjusted) funding, increases in productivity, or both. If these pressures were met entirely by funding increases, the NHS budget would need to be around £30 billion higher in 2020–21 than it was in 2013–14.5 However, in the Five Year Forward View, NHS Chief Executive Simon Stevens has argued that average annual productivity improvements of 2·4% are possible, and, therefore, that the NHS needs an £8 billion per year funding increase by 2020–21 to meet budget pressures without reducing quality.5
1155
Comment
an £8 billion per year funding increase by 2020–21, productivity improvements of around 2·4% per year will still be required for the NHS to meet the demand and cost pressures it faces. Given that annual growth in NHS productivity in recent decades is estimated to be about 0·4–1·3%, these improvements will be a challenge.8,9 To what degree the NHS will be able to meet such a challenge is unclear, but doing so will be crucial if the NHS is to meet demand and maintain health-care quality over the coming years, irrespective of who wins the election.
2 3
4 5
6
7 8
*Rowena Crawford, George Stoye Institute for Fiscal Studies, London WC1E 7AE, UK [email protected]
9
HM Treasury. Public expenditure statistical analyses 2014. London: Stationery Office, 2014. Baker M, Dacre J, Richmond D, et al. The NHS needs an extra £8bn a year to survive and meet its challenges. The Guardian March 15, 2015. http://www. theguardian.com/society/2015/mar/15/nhs-needs-extra-8bn-to-survive (accessed March 20, 2015). NHS England. The NHS belongs to the people: a call to action—the technical annex. London: NHS England, 2013. NHS England, Care Quality Commission, Public Health England, Monitor, NHS Trust Development Authority, and Health Education England. NHS five year forward view. London: NHS England, 2014. Crawford R, Stoye G. Challenges for health spending. In: Emmerson C, Johnson P, Joyce R, eds. The IFS green budget 2015. London: Institute for Fiscal Studies, 2015: 176–96. Keynes S. Public services spending, IFS Budget 2015 analysis. London: Institute for Fiscal Studies, 2015. Massey F, Office for National Statistics. Public service productivity estimates: healthcare 2010. London: Office for National Statistics, 2012. Bojke C, Castelli A, Grasic K, Street A, Ward P. NHS productivity from 2004/05 to 2010/11. Centre for Health Economics, research paper 87. York: Centre for Health Economics, 2013.
We declare no competing interests. 1
Crawford R, Keynes S. Options for further departmental spending cuts. In: Emmerson C, Johnson P, Joyce R, eds. The IFS green budget 2015. London: Institute for Fiscal Studies, 2015: 151–75.
Viviane Moos/Corbis
Universal health coverage: not why, what, or when—but how?
Published Online October 16, 2014 http://dx.doi.org/10.1016/ S0140-6736(14)61742-6 See Series pages 1230 and 1248 See Online/Series http://dx.doi.org/10.1016/ S0140-6736(14)61494-X and http://dx.doi.org/10.1016/ S0140-6736(14)61467-7 See Online/Health Policy http://dx.doi.org/10.1016/ S0140-6736(14)61780-3
1156
The argument about universal health coverage (UHC) has been won, and won remarkably quickly. It was only in 2010 that WHO advanced the case for UHC in its World Health Report on health systems financing.1 That report triggered unprecedented demand from countries for advice and assistance about how to deliver UHC. As the end of the Millennium Development Goal era approached, advocates for UHC saw an opportunity to embed their vision for stronger and more equitable health systems into the post-2015 development framework. So far, they have succeeded. The Open Working Group’s proposal for the Sustainable Development Goals (SDGs) includes UHC within its draft health SDG—”Goal 3: Ensure healthy lives and promote well-being for all at all ages”.2 A sub-goal promises to “achieve universal health coverage, including financial risk protection, access to quality essential health care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all”. Although some donor nations and influential foundations have expressed doubt about the wisdom, let alone the feasibility, of UHC as an SDG, it seems almost certain that UHC will make it into international development objectives after 2015. But saying and doing are two very different things. The task of delivering UHC for countries most in need of resilient health systems has barely started. And it is in this realm
of complex policy making that little progress has been made. It is no longer a case of “why, what, or when” UHC. It is now about “how”. In setting out their vision for ending preventable mortality within a generation, Dean Jamison and colleagues3 offered the most rigorous framework yet for thinking about how to deliver UHC. They emphasised the value of “progressive universalism”, an efficient and fair means to achieve financial protection and coverage with essential health services.3 Progressive universalism signals a commitment to include the least well off from the very beginning of the journey towards UHC. Jamison and his team tried to answer the question about how to navigate one’s way across the famous cube of UHC—satisfying the three coordinates of proportion of population covered, proportion of population financially protected, and proportion of interventions provided. Their theoretical discussion offered a helpful thought experiment about the necessary trade-offs that are needed in designing policies to reach UHC. What this discussion lacked was a set of real world case studies of countries in the midst of their difficult quest to achieve UHC. The Lancet Series on UHC in Latin America begins to fill this gap. The Series,4–7 and an accompanying Health Policy paper,8 chart the complex political, economic, and social forces that shape health policy making in any society. www.thelancet.com Vol 385 March 28, 2015
