How much money the NHS gets is a political decision. There is no real formula and usually a row.
Sadly, it looks to me; most MPs are either too preoccupied with Westminster briefings or too lazy to dig into the numbers to find out what is really happening to NHS finances and the future viability of their local hospitals.
Here's a primer...
- The NHS isn't overspending. The NHS is carrying out more treatments and providing more care than it is funded for.
- The funding gap between the money the NHS has and the amount of care it is obliged to provide will be about �30bn by 2020-21.
In the 2015 Spending Review, Chancellor Osborne announced; to cover the five financial years 2015-16 to 2020-21, the NHS would have �8bn, over inflation, the so-called 'extra' money, which, by 2020-21, reduces the funding gap to about �22bn.
The remaining �22bn is to be met by NHS efficiencies, reductions in demand and slowing growth. Really?
The PM seems to think the NHS has had �10bn 'extra', or is the real figure �8bn? What is correct?
The 'extra' eight billion relates to the amount the government says NHS spending will grow in the five year spending cycle, between the financial years 2015-16 and 2020-21.
The mysterious �2bn came from the previous, 2015-16, spending year, before the new spending cycle began. It's a fiddle with the numbers.
The �8bn is not quite right, either. The �8bn is actually �7.6bn but hey-ho.
Moreover, the basis of funding has changed; NHS finances used to be calculated as the entire DH budget. Now it only counts as part of DH expenditure, in fact, just NHSE (commissioning).
The DH have cut their remaining budgets; capital expenditure, pay, drugs, training and PHE initiatives by a total of �3bn and that amount now counts towards NHSE and contributes to the �8bnb 'extra'. A transfer of funds. Remember; one way or another DH cuts to the remaining budgets all hit the front-line of care.
The transfer makes the real figure for 'extra' NHS funding above inflation between 2015-16 and 2020-21 �4.5bn. However, even this figure is smoke and mirrors. It measures inflation across the whole economy. NHS inflation is higher than the economy average, reducing �4.5bn 'extra' to just �800m.
The 'overspend' across the NHS, in the last spending cycle, after a huge amount of fiddle-faddle was reported as �2.45bn. The real, before-the-accountant's-massage' figure was �3.7bn. Trusts were leaned on.
Why are the Trusts in such a financial state? Is it their fault? Bad management? No...
Between 2010-11 and 2015-16 the tariff was cut each and every year. The tariff is the amount hospitals and others are paid to carry out treatments. The price list. For example; in real money, a 'per-patient' payment has dropped from �1,000 per patient, to �820.
How have Trusts reacted? They have cut their costs by an heroic 13% but the amount they are being paid has been cut by 18%. There is a 5% gap.
The forecast for the total provider deficit is �580m in 2016-17. This is a miracle, reduced from the �2bn+ in 2015-16. It will, mostly, be achieved by Trusts being slipped a bung from the Sustainability and Transformation Fund; disguising the real deficit of probably close-on �2.4bn.
Trusts are aiming for a �3bn cost improvement programme; twice what the Carter Review thinks is possible.
NHS activity grows at about 4% a year but the funding is not available to match it.
NHSE wants to 'slow demand' by 2%, using public health measures and transforming services, shifting them to cheaper parts of the system.
The transformation element of the Sustainability and Transformation Fund has been reduced to �2.5bn by the bungs, so the money left for 'transformation' amounts to about four million for each of the CCGs.
Is it enough and can the CCGs invest in new services that are oven-ready and give an immediate payback or at least by 2020? In about 250 weeks?
The percentage of GDP being spent on healthcare in 2015-16 was 6.6%; in the year 2000 it was 6.2%... we are now spending about the same as Slovenia and Iceland and behind Greece and Belgium.
The solutions; rationing, waiting lists, co-payments or more money.
Your call.
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For more detail on these numbers have a look here at the
Nuff's very clear analysis by Sally Gainsbury and Mark Dayan.
