This NHS funding squeeze will kill the system

http://www.theguardian.com/commentisfree/2013/sep/20/nhs-funding-squeeze

Version 0 of 1.

The Royal College of Physicians' future hospital commission report calls for care of acutely ill patients to be given priority over elective or planned care, and for hospital doctors to provide this care to patients in the community as well as to inpatients. These proposals are in part a response to the fear that the current drive to close smaller hospitals will leave many patients without proper access to specialist care. But what is curious about the report is that it makes no effort to cost its proposals. It accepts that funding is likely to remain tight, and just recommends that more of what is available should be given to acute care.

Anyone looking for ways to improve NHS care who doesn't confront the truth about its funding is wasting their time. Funding is not just tight. Contrary to the government's claim that the NHS is being protected, the budgets of hospitals and community health services are being cut by 4% in every year from 2010 until 2014 as part of the so-called efficiency savings of the "Nicholson Challenge", to save £20bn by next year. The effects are being felt everywhere. A cardiologist told me only last week: "In my whole career I have never seen the NHS under so much pressure. Demand is increasing without increase in resources. Often work feels like one is in a war zone."

We have been there once before. In 1985 underfunding of the NHS produced a crisis very similar to the one it is facing now. Then, the gap between the funding the government was planning to give the NHS in 1990 (five years later), and what it would need just to sustain the services it was already providing, was estimated to be equivalent to 5% of the hospital and community health services budget. The government saw this as having potentially damaging electoral consequences, so more funding was provided, along with the introduction of the internal market to try to secure economies.

But today's funding gap is much bigger. By 2021-22 – in just eight years' time – it is estimated that given rising costs and growing demand, even if the government was to increase NHS funding in line with the expected growth of national income (that is, well above current spending plans), the NHS would still need some 15% more just to sustain its existing level of services. And this time no one is talking about closing the gap.

It is a cruel illusion to pretend that the NHS can continue to provide good services (not to mention improved services) on a flat budget, let alone one being cut by 4% a year.

This is partly a matter of taxation. The NHS rests on the principle that everyone pays for the healthcare of those who are unlucky enough to need it. It is not possible to uphold this principle while refusing to contemplate tax rises. .But there are also major savings to be made. They can't come from further freezes of NHS wages, or staffing cuts of the kind that were at the heart of the Mid-Staffs disaster (and were a factor in 12 out of the 14 troubled hospitals investigated by Sir Bruce Keogh). They must come from (a) ending the huge costs of trying to operate health care as a market – the costs of contracting, billing, auditing, marketing, dividends, and fraud; and (b) reducing the need for hospital care, for example by taking resolute steps to reduce alcohol and fast-food consumption.

Advocates of privatisation will be content to watch as the now fragmented NHS struggles and fails to maintain coverage and quality. Their answer will be to reduce NHS services to a limited low-cost package, impose charges and encourage all those who can afford it to take out private medical insurance. Those who are committed to the NHS as a high-quality service for all need to step forward and call for an honest approach to its funding – including raising taxes.

In 1987 the presidents of the Royal Colleges of Physicians and Surgeons called on the prime minister to save the NHS. Today they seem to be arguing about where to put the deckchairs on the Titanic. Jeremy Hunt looks on from the bridge, wearing his Bupa life-jacket. The steerage passengers remain in the dark.

Our editors' picks for the day's top news and commentary delivered to your inbox each morning.