Rearranging the deckchairs in the NHS

Today, we find out what changes are likely to be made to the Health and Social Care Bill that is currently making its way through Parliament.

Much of the Bill as currently written, particularly the proposal to give GPs greater commissioning powers, including powers to commission from the private sector, has been controversial. It is therefore not surprising that a certain amount of negotiation is going to happen before the Bill becomes law.

However, it strikes me that none of the proposed reforms, or indeed any likely variation on them, is going to come even close to solving the underlying problem that the NHS faces. The problem is really quite simple to describe. Are you ready? Here goes:

In the NHS, demand exceeds supply.

That is the real problem. Making changes in who gets to commission what may or may not be helpful (and as I've argued elsewhere, I have my doubts that increased GP commissioning will be helpful), but no matter how well it works, it will not solve the fundamental problem that demand exceeds supply.

The traditional solution to the problem that demand exceeds supply, as per economics 101, is that providers increase their prices. That means that either demand decreases, as consumers don't want to pay higher prices, or supply increases, as more providers move into the market attracted by the high prices, or maybe a combination of both. That traditional solution isn't an option in the NHS, as it's widely accepted the that NHS needs to be free (well, mostly, ignoring little details like prescription charges) to end users.

So, given that the traditional economic solution won't work, we are left with 2 alternatives. We can increase supply until it matches demand, or we can reduce demand.

If we let demand remain unlimited, I don't believe it will ever be possible for the NHS to meet it. The population is aging, many diseases that used to be untreatable are now treatable, and there is therefore a huge upward pressure on demand. It's hard to see how demand can be met without giving the NHS a budget that's simply not going to be realistic.

No, the only solution (perhaps in tandem with increasing supply at certain points) is to reduce demand. This is otherwise known as rationing. And here is the problem: for some reason that I don't fully understand, as I've pointed out before, politicians are forbidden to use the word rationing. If they do, they are instantly vaporised in a puff of smoke (or something like that, I'm a little bit hazy on the fine details).

But here's the thing: while demand exceeds supply, rationing is inevitable. It can either be explicit or implicit. Explicit rationing is when you have an open and honest debate about what the NHS will fund and what it won't fund. An example is when you have a hugely expensive cancer drug that gives marginal survival benefits, and a decision can be made not to fund it on the back of rigorous and transparent cost-effectiveness analysis. This has happened in the past, thanks to NICE, but the process has never really been sufficiently widely applied to be truly useful.

If you don't have explicit rationing, you end up with implicit rationing. Here's a little example of implicit rationing, as implemented by my GP surgery. What happens is if you want to make an appointment at my GP surgery, for a start you probably won't get through on the phone without considerable effort. If you do finally get through, you are then met usually by an unhelpful receptionist who will probably tell you you can't have an appointment. If you do get an appointment, it's not unheard of to turn up at the surgery and for them to deny all knowledge that the appointment had been made.

That is a form of rationing. It takes a certain amount of persistence to get an appointment. Many people who wanted an appointment won't get one. Perhaps in some ways, that's helpful. People with minor viral infections who really shouldn't be wasting a GP's time anyway will probably give up, and that's a good outcome. However, other people who might benefit from preventive treatment may not bother either, and that's not a good outcome. Neither is it a good outcome if people who really need to see a GP end up in the emergency department of the local hospital because they were unable to get a GP appointment.

Waiting lists for treatment are another way in which treatment is implicitly rationed.

So, there are really only 4 ways in which we solve the problem of supply exceeding demand in the NHS:

1. We abandon the idea that the NHS should be free to users. I don't think anyone is suggesting that.
2. We increase the NHS budget until it meets demand. Realistically, that's never going to happen.
3. We limit demand by implicit rationing, of the kind practised by my GP surgery, waiting lists, or individual decisions by local commissioners (otherwise known as the "postcode lottery").
4. We limit demand by explicit rationing, which is never going to happen, because then all our politicians would be vaporised in a puff of smoke.

Call me a pessimist, but I really don't see how this can end well.