Time for a grown-up discussion about our ageing societyby George Magnus / June 18, 2018 / Leave a comment
It would be churlish not to welcome the government’s plan for the NHS to receive an additional £20bn by 2023. Yet there is something about the announcement that smacks of both deceit and desperation.
Much has been made already as to Theresa May’s preposterous repetition that the extra money would derive from the “Brexit dividend” as well as from unspecified new taxes. I won’t dwell on this here as the notion of a Brexit dividend has already been widely panned. The “Brexit dividend” would be better branded a “Brexit cash call,” since companies pay dividends out of profits and issue cash calls when they need to raise money. Brexit will yield only net costs, not net savings, and because all of us as taxpayers will effectively finance any extra NHS spending, this seemingly innocuous branding is important to get right.
A proper discussion about the challenges the NHS and care systems face and how they can be properly funded cannot be held often enough. It is probably one of the most important non-Brexit issues of our time. Given this, the government’s announcement deserves scrutiny. National demand for adequately funded healthcare and social care needs to be considered not only over a five-year time horizon, but over a much longer period. The respected Institute for Fiscal Studies has spelled out the realitiesof future healthcare spending. In this sense, time, the government still seems rudderless when it comes to a sensible strategy.
The key issue for our health and social care systems is the scale of the ageing society problem, which, as I have highlighted before, is unprecedented. We have no templates as to how to prepare for or manage the consequences, and know only that the status quo arrangements we have are not up to the task.
Between now and 2050, it is predicted that the UK population will grow by about 15 per cent, or a compound rate of 0.4 per cent per year. Funding the NHS if the economy is growing at 1.5 per cent a year isn’t rocket science, though that would still entail significant political questions about new sources of tax revenues and how to prioritise public spending.
Yet ageing makes it all more complicated. The age group over 65 will grow three times as quickly as the total population, and the age group over 80, six times as quickly. By 2050, the over 65 share of the population will have risen from 17 to over 25 per cent, and the share of the over 80s from less than 5 to 10 per cent. Put another way, between now and 2050 there will 7.3m more people aged over 65, and over 4m more people aged over 80. And remember, the number of working people to support each older citizen is on an inexorable path of decline.
The ageing of the population, in other words, is the defining issue when it comes to the demand for and affordability of health and social care. Empirical evidence tells us, moreover, that the cost of tending to non-communicable diseases is significantly higher when caring for older citizens than it is when looking after the health needs of children and younger adults. Preventative and social care follow the same pattern.
If we already had a fully functional and well-funded healthcare system, we would still have reason for concern. Yet our starting point is not great, according to the OECD’s 2017 Healthcare Statistics report. Using OECD data, the King’s Fund issued a reportrecently looking at the UK compared to 20 other advanced economies. Even though total health spending in the UK as a share of GDP is just under 10 per cent, more or less in line with the median estimate for the countries under review, it is less than the 11 per cent of GDP or more prevailing in Germany, France and Sweden.
It is not just that we spend less than some of our rich peers do in relation to GDP, but that these aggregate measures mask serious shortcomings when it comes to the way that resources are supplied and financed in the UK.
For example, the data show that the UK has 2.8 doctors per 1,000 of population, which is below the average level of 3.6 and third from the bottom of the list of countries compared. We have fewer nurses per head of population (7.9) than the majority of European Union countries and Australia and Canada. The UK is also close to the bottom when it comes to beds per 1,000 and to beds in long-term residential care facilities per 1,000. The Fund also drew attention to the UK’s bottom position on CT and MRI scanners per head of population, and only marginally better status on expenditure on pharmaceuticals and preventative drugs. In all these areas, we can and must do a lot better to alleviate the stress under which too many professionals work nowadays.
The question about NHS and social care under-funding is now getting a better airing, finally, but this government and its successors are going to have to try and de-politicise it and plan for it through—and not between—electoral cycles if we want to put healthcare back on a stable path. Healthcare needs to be better resourced not for the next five years but with a view to the next 25 years. We need to have a grown-up discussion about hitherto taboo topics, such as entitlement rights, the costs of healthcare provision, ways in which private and philanthropic capital could be accommodated within the NHS system without compromising its nature, and ultimately, who pays and how?