Although the last Labour government turned around the NHS, this plan looks set to fail
In July, the government published Fit for the Future, its 10-year health plan for England. In a few days’ time, the Chancellor will unveil her Budget. Between them, the 10-year plan and the Budget will determine the future of the NHS.
The omens are bad: although the last Labour government turned around the NHS, this plan looks set to fail – and it needs more than tweaks to fix it.
How to turn around the NHS
By 1997, patient satisfaction with the NHS had reached all-time lows. Between 1997 and 2010, satisfaction rose to all-time highs.
Independent international benchmark providers recognised that performance. By the end of the turnaround, the US-based Commonwealth Fund rated the NHS the best system in any of the countries they covered.
So, how did the government do it?
Their plan was strategically sound: they understood that the success of the NHS is inextricably intertwined with the success of the UK as a whole.
Without a healthy population, you cannot have a strong economy; and without a strong economy, you cannot tackle the causes of ill-health or fund healthcare properly. Getting it wrong creates a vicious circle; getting it right creates a virtuous circle. They got it right: they funded the NHS in line with need; tackled the causes of ill-health; and ensured effective prevention.
Funding first: Conservative governments from 2010 onwards claimed “we are putting record amounts of money into the NHS.” This was true only if you’re prepared to ignore the combined impact of inflation, a growing population, an ageing population and an increase in the rate of ill-health within age cohorts.
Adjusting for those factors, you see that funding vs need rose from 1997 until the Global Financial Crisis and then fell. When funding vs need rises, NHS performance improves; and when it falls, NHS performance declines. So, funding was the first thing the last government got right.
The second thing was that they tackled the causes of ill-health. Sir Michael Marmot showed that if you are living in poverty, you’re more likely to have substandard housing, to be unable to heat it properly or to eat healthily or take regular exercise, and more likely to be living with mental stress. So, you are much more likely to fall ill. Poverty fell significantly under the last Labour government.
The third thing they got right was prevention as shown by the 2010 Inquiry Our Health and Well-being Today.
So the 1997-2010 government succeeded because it had a sound strategy; but they didn’t get everything right. There are three areas where there is evidence that the impact of their initiatives was significantly negative:
- The private finance initiative (PFI), which added capacity but at great cost which is contributing to the financial pressures we face today;
- Blunt use of performance indicators: which produce perverse behaviours in order to ‘game’ this system. Over-focus on financial indicators was a key contributor to the scandal in the mid-Staffordshire hospital which caused serious harm to patients;
- Using public money to build private sector capacity is often more expensive, draws resources away from the NHS, distorts medical priorities and delivers worse outcomes for patients.
The last Labour government succeeded because its strategy was sound – despite flawed tactics.
Will this plan also succeed?
The 10-year plan has three shifts: from hospital to community; from analogue to digital; and from treatment to prevention.
If done well, all three could be positive. Early intervention in the community to catch medical issues before they become serious would be helpful. Automating paperwork and sharing data more effectively within the NHS must be good. And encouraging people to avoid harmful substances like tobacco, ultra-processed foods, etc is sensible.
The plan, however, raises concerns about each of these shifts. Most fundamentally, however, even if the three shifts were executed perfectly, they do not substitute for sound strategy.
How does this plan stack up against what the last Labour government did strategically? In summary, the plan stacks up poorly against what the last Labour government did. It will not fund in line with need; it will do some good on prevention but has important gaps; and wider government plans that we have seen so far suggest nothing that will produce the necessary impact on poverty.
Strategically, the plan is gravely flawed … and it hopes to make up for this with tactical reforms.
Unfortunately, it is planning to repeat the mistakes of the last Labour government.
So, what should the government do now?
What would it take to fix this plan?
The key lesson from last time was to get the strategy right. We need to fund in line with need, tackle poverty and make prevention effective.
We must also avoid the mistakes of the past; and the first step is to acknowledge them: we need a rapid but rigorous analysis of the tactics highlighted above.
These points should be obvious, but they sound almost impossible because the government has created red lines for itself which it is now afraid to cross.
I have sympathy: this government had a difficult inheritance. But it is nothing like as difficult as what Clement Attlee’s government faced in 1946.
What would have happened if Attlee had followed this government’s approach? After the war, debt:GDP stood at over 250%; more than half of national income had been diverted to the war effort and over 5 million people mobilised into the Armed Forces; 5% of national wealth had been destroyed, and 1% of the population lost.
Had Attlee been constrained by today’s fiscal rules, he would have had to shelve the Beveridge plan and the NHS would never have been born. Generations of Britons’ lives would have been blighted – and shorter.
Fortunately, Attlee’s government rose to the challenge, listened to Keynes and Beveridge, and created the NHS and the Welfare State, when it had been told that it would be economically irresponsible to try. And what was the economic cost? The UK enjoyed the most successful economic period in our history.
We must learn from Keynes, Beveridge and Attlee.
Mark is an economist and Visiting Professor at IE Business School.
Image credit: Lauren Hurley / Number 10 – Creative Commons
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