Why the NHS must manage demand

17 Feb 00
The more motorways you build, the bigger the traffic jams you end up with. The NHS, according to a new and detailed analysis, is in the same bind.

18 February 2000

The service will not be able to meet public expectations even if health spending is increased to the European Union average, the King's Fund has warned in a wide-ranging report on the future of the NHS. The independent, privately-funded health policy analysts buck popular wisdom by insisting that extra money is not the silver bullet that will cure all the health service's ills.

While the billions of pounds promised to the NHS by the prime minister last month would be an important fillip for the service, it would not bridge the gap between supply and demand. Though better resourced, the health service will always have to catch up with public demands.

The report's authors, respected NHS experts Jennifer Dixon and Anthony Harrison, issued a further challenge to conventional notions by asserting that the service needs more managers.

In The NHS: Facing the Future, they say no health care system can provide every beneficial service, nor should it try to because it would only result in another area of public spending, such as education, being starved of cash.

Dixon says: 'No matter how health services are funded, or how much money they get, there will always be a gap between supply and demand. That is true for every country in the world from the US to Poland. Funding the NHS to the EU average is urgently needed and will be a big help but it won't solve all our problems.'

Harrison says demand will continue to spiral upwards, regardless of the adequacy of funding. Even well-financed health care systems, such as those in Canada and France, were overwhelmed when the flu outbreak hit in January. Expectations rise as more and more treatments become available, he adds.

'If there are lots more resources and this is spent on more services then people will want even more. In the US [which puts more than 14% of its GDP into health care, as opposed to 8% in the UK], surveys show that people still think it needs more investment.

'More money will not get us away from the perception of shortage. There will always be things we can't do or shouldn't do because they are of low value relative to cost. Expectations feed expectations, not just in the individual but among professionals.'

The report was published as the British Medical Association called for greater clarity in the way NHS funding announcements were made. As part of its continuing inquiry into the adequacy of health service spending, the doctors' body said top-slicing and repeat announcements over funding have made it difficult for those delivering services to understand what money is available and to plan accordingly.

Health spending has grown by about 3% in real terms over the past 20 years. If this continues over the next 15 years there should be more than enough cash to cope with demographic changes such as the projected increase in the elderly population, according to the King's Fund report. But rising demand, stoked up by factors such as new technology and greater public consumerism, means the health service will not be able to keep up.

The NHS must learn to manage demand, the authors say. Since 1948, it has not been managing the use of the service but crudely limiting access. Over the past 20 years, governments have encouraged activity to rise because treating more patients has been seen as a sign of success. This, in turn, has encouraged the public and medical professionals to expect more and led to the service's current malaise – long waiting lists, rationing, demoralised staff and annual winter crises.

Harrison says there is no easy answer to demand management, though the NHS could look at ways of directing patients to more appropriate forms of care. The government is attempting to do this with NHS Direct. He adds that the service must carry out a 'demand audit' on every new initiative to ensure that the full effects, including costs and staffing requirements, are known before implementation.

Facing the Future says the health service must address the need to get more out of every pound it spends. Though it has gone through years of efficiency drives, the removal of whole tiers of bureaucracy and specific measures such as anti-fraud campaigns, the Fund believes it can still increase its productivity.

'We are not saying it is going to be easy, but the NHS has never really taken cost control seriously,' Harrison says. 'Managers are not trained to reduce costs and they have no real power over clinicians. They are always fiddling around the edges and this amounts to cost-cutting, which is not the same as reducing the costs of what you do.' The NHS should establish a costs inquiry that would identify gaps in information and understanding, he adds.

Cost-cutting exercises usually focused on reducing the number of managers, which has stripped out the expertise needed to analyse and solve problems.

'We are saying the service is under-managed in many cases, but there should be more clinical managers, not just more general managers,' Harrison says.


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