With the NHS effectively withdrawing its level of support, are we veering towards a hybrid US model of healthcare? How will this shape employee benefits? Dr Peter Mills investigates.
Despite the government recently hitting the pause button on their healthcare reforms, there appears to be little doubt that the status quo is not an option for the NHS.
The UK, like most other developed countries, has seen a rapid and seemingly inexorable rise in the cost of delivering healthcare to its population over the past two decades. Healthcare spending has more than doubled in the past decade. However, gross domestic product over the same time period has increased only by 60%.
Couple this with the sizeable budgetary deficit that the nation has – we’re having to borrow more and more just to pay back the interest on what we owe – and it is easy to see why public spending cuts need to happen.
The first question is whether the depth of the cuts needed will have an appreciable impact upon the level of service delivery from the NHS? To understand this better, it is worth putting the NHS as an employer into context.
PROGRESS AT A PRICE
The NHS is Europe’s biggest employer (and the world’s fourth largest), with more than 1.4 million workers across the organisation. Data from the NHS Information Centre shows that over the past ten years, employee numbers have increased by nearly 30%.
What is probably more interesting is that over the same time period, the number of doctors has increased by 45%, with consultant numbers increasing by a staggering 55%.
Certainly there are ‘backroom’ efficiency savings that can be made. But with the majority of all NHS expenditure going on salary costs, it is inevitable that personnel will be lost and it is likely that some of those will be frontline clinical staff.
The second question centres on productivity and performance. Few would disagree that in general, the performance of the NHS has improved dramatically over the past decade.
No longer do we hear stories of multi-month, or even year, waits for straightforward procedures, or people dying on waiting lists before they can be treated. At least from a transactional point of view, the NHS now far exceeds the expectations of the majority of the population.
But this has come at a price, and that price, as detailed above, has been the burgeoning wage bill that has accompanied these performance gains. The NHS has successfully managed to do ‘more with more’ over the past ten years, but inevitably will have to ‘do more with less’ for the foreseeable future.
So how is this going to affect the average person in the street? Are we going to see a return to the ‘bad old days’ of increasing waiting lists and patchy performance? If you look at the numbers, it is difficult to see how this can play out in any other way.
It is reasonable to suspect we are not going to see wholesale medical redundancies. However, the natural attrition seen from retirements will likely be the way that at least some of the workforce is ‘resized’. It may even be cost-effective to offer some staff early retirement. This is especially true of medical staff who accrue considerable tenure-related salaries and benefits.
If we accept this paradigm, then it becomes clear that access to timely and appropriate care for the working population will also be affected. With this in mind, it seems appropriate for companies, and their advisers, to start to think about how this might impact upon the benefits they offer to staff, as well as how the perceived value of health related benefits may change in the face of reduced NHS service provision.
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