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Monday 24th October 2016

How the credit crunch will hit the NHS

27th January 2009

Alan Maynard, professor of health economics at the University of York and Chair of York Hospitals NHS Foundation Trust, looks at how the credit crunch hits the NHS.

future of nhsQ

The debacle in the financial sector has produced an economic recession with large government funding deficits, banks reducing their lending, reduced consumer demand and job losses.

So how is the Department of Health and NHS responding to this?

The DoH is offering “jam today and dripping after an election by 2010” while the NHS faces disaster if there are no significant improvements in productivity.

Current cash settlements of 5% additional funding for PCTs are reasonable, however, hospitals are to be squeezed in their tariffs at a time they are being forced to invest more in infection control and introduce patient reported outcome measurements.

The outlook for future years is grim with public expenditure increases of less than 1.5% from 2010.

"After seven years of plenty the NHS faces seven years of want as the gross distortions in the economy are corrected."

This puts intense pressure on the NHS to squeeze more patient care out of available resources.

A dramatic sea change in the way clinicians and managers work together is required because the economic emergency is such that without radical and swift improvements in productivity, those who favour privatisation and insurance will erode the universal principles of the NHS.

Those, like myself, who favour a universal tax-based health care system based on meeting patient need, will see the NHS survive the recession only if clinical and managerial collaboration and cooperation is revolutionised.


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