“Ring out the old, ring in the new,” declared Tennyson in his new year elegy, though 170 years later the lesser known line “ring out old shapes of foul disease” may be more apposite to prospects for health and care in 2013.

The closing months of 2012 offered little cheer. In November, the Care Quality Commission’s annual assessment of the state of care services warned the increasing complexity of conditions and the growing number of people with more than one condition were affecting the ability of providers to deliver person-centred care.

‘The drum beat of support for integrated care as a response to pressures will grow louder in 2013’

Then the Audit Commission’s Tough Times 2012 report found that although most councils were coping with cuts, stress was starting to show, with many planning to make big reductions in adult social care spending. In a similar vein, the King’s Fund’s own mid-term assessment of the coalition’s health policy concluded that while NHS performance is generally holding up, cracks were starting to emerge.

In December 2012, the chancellors’ autumn statement raised the spectre of at least four more years of austerity and a further 2 per cent cuts in local government grants (on top of the 28 per cent already announced in the last spending review). The number of people receiving publicly funded social care is already plummeting and little is known about what happens to people who fall outside the system.

Unknown impacts

Against this bleak backdrop, the spending review promised for the first half of 2013 looks to be the bloodiest yet. An outcome that sees the NHS continue to be protected from real terms cuts will come with a heavy price of even deeper cuts in local government spending, of which the biggest controllable item is adult social care.

The drum beat of support for integrated care as a response to these pressures will grow louder still in 2013 − yet the boundary of health and social care will be where financial and service pressure will be at its fiercest.

The potential impact of the welfare reform changes for health and social care has yet to be quantified. There are real worries the financial squeeze on providers will compromise efforts to tackle poor quality care epitomised by Winterbourne View and the Mid-Staffordshire inquiry.

‘The questions are just as valid for the NHS as they are for social care, yet history has led to very different answers’

And what about social care? The wettest winter on record has not stopped the grass growing around the Dilnot report. The coalition’s mid-term review is expected to reiterate commitment to its principles, but it will be for the spending review to determine the level of the cap beyond which the state will pick up the tab for individuals’ social care costs. A cap as high as £75,000 will seriously diminish the impact, especially on those with modest assets who suffer most under the current system.

Government handwringing about Dilnot has helped divert attention from a bigger set of questions about how we pay for care that will become more urgent in 2013.

The big questions

The first and most fundamental question is what level of resources we need to fund good health and care services (which is not the same as projecting the future costs of our existing, dysfunctional system); the second is to what extent these costs should be shared between the individual and the state (the question Dilnot was asked to consider in relation to social care). The third, probably the most contentious, question is where the money comes from (in terms of reprioritising existing public spending, changes to taxation or new forms of taxation, insurance or charging).

‘People with more than one illness will defy efforts to compartmentalise needs into “health” or “social” care categories’

These questions are just as valid for the NHS as they are for social care, yet history has led to very different answers, crafted in the different world of the 1940s. As a result, means testing, co-payment and self-funding are firmly embedded in social care to an extent many would consider unthinkable for the NHS.

A generally benign post-war economic climate has meant the consequences of these differences could be fudged, ignored or in some cases camouflaged by policy complexity (eg: by creating the concept of continuing healthcare). Demographics and austerity has put paid to that. The growing number of people with more than one illness will defy efforts to compartmentalise needs into “health” or “social” care categories. 

The King’s Fund’s Time to Think Differently programme aims to stimulate ideas and debate about fundamentally changing the way services are delivered and funded.

In 2013, the pressure on local authority and NHS budgets will become so great − and the clamour for better coordinated services so loud − that it will be impossible to duck the big questions about what kind of health and care system we are willing to fund, how this can be achieved and where the money comes from. 

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Richard Humphries is a senior fellow, social care and local government at the King’s Fund