On shaky ground

Published: 06/12/2001, Volume III, No. 5784 Page 13 14

Ifyou relied on media reaction to last week's Wanless report on the long-term future of the NHS, you could be forgiven for thinking that its only conclusion was that the health service should remain publicly funded through taxation.

But though health economists agree that this finding was well founded, the bulk of the interim report is in fact based on assumptions that call for far closer scrutiny. Many argue that they contain significant gaps and, in particular, that if the calculations on staffing are wrong, the predictions for the future direction of the service could be way off course.

The report concludes that the best available evidence suggests that demographic change, principally in the form of an ageing population, will add less than 1 per cent to costs. It also says technology is likely to add much more than 2 per cent a year to costs.

King's Fund health systems programme director John Appleby says: 'On technology issues, there is a lot of uncertainty. When you are into prediction, it is very difficult indeed. In terms of the demographic pressures, there was quite a lot of uncertainty.

'People may be healthy, but they may still demand healthcare.

What maybe our parents are putting up with now, we maybe will not put up with. This is one of the real difficulties of the report - that it is dealing with all this uncertainty.

The trouble is we can all have guesses, but we are not sure. '

But NHS Confederation acting chief executive Nigel Edwards believes that although the area of predictions is complex, the evidence base was very strong. 'You couldn't have found more expert people. The technology is difficult. We do know we are massively behind, so it is not difficult to predict the next five to 10 years.

'It seems to me they have done a pretty impressive job of pulling people together and getting some of the leading people in the world. '

However when it comes to the future workforce, things look shakier. With two-thirds of NHS spending going on pay, the assumptions the report makes about the future workforce are likely to be the most crucial. It says that over the last 20 years, staff costs have increased by 2 per cent above inflation, in line with the growth in productivity in the health service.

It concludes that the growth of the pay bill over the next 20 years will depend on earnings growth for individual staff groups, changes in the skill mix, and productivity gains. It says that pay rises will be matched by productivity gains unless the NHS is competing 'for a pool of skills where economy-wide pay increases were higher than this', and 'there was a large mismatch between the demand for suitably skilled healthcare workers and their supply'.

On the 'productivity or efficiency gains', Mr Appleby says: 'I think most of the NHS would question quite closely whether they are efficiency gains. A lot of people would say they are about cuts. Their measure of efficiency gain is a problem. '

Mr Edwards agrees that 'staffing is always a tricky one'.

'There is a problem for Wanless, and a problem for us, that we do not understand the labour market. You need to be very cautious about any figures on productivity gains. There is a limit to what you can achieve at the margins.

'The question is, are we going to see a fall in productivity and efficiency, because we are in a tight labour market? The whole debate tends to ignore the supply side.

The idea that you can predict how many staff you are going to need is nonsense. '

One of the major assumptions on staffing is that there will be a radical redesign of roles. Mr Edwards says: 'I am worried about the long-term issues about making it sustainable - new roles for doctors, new roles for nurses, the social care labour force and understanding our labour market. Shortages, particularly at the social care end, are worrying. '

Institute for Public Policy Research senior research fellow Liz Kendall says: 'I think there is substantial potential for change, but there are large challenges to taking the process forward in terms of what the workforce should or should not be doing. An awful lot of questions need to be answered, and there is a superficial consensus on what it means. '

Perri 6, director of the policy programme at the institute for applied health and social policy, King's College London, also highlights the worries about the social care side of the equation. He says:

'Mr Wanless has ducked the questions raised by the relationship between the NHS and the social care system. Many of the trends he identifies in care itself - shorter inpatient stays, better co-ordinated and seamless care, more support for patients in the community - as well as his analysis of rising public expectations, all mean there will have to be more money spent in social care.

'For example, all the improvements in mental healthcare and care for the elderly will mean more and more highly skilled staff being attracted into social care, a field that the Wanless report acknowledges is haemorrhaging staff. '

So, what about that funding issue? 'The arguments about funding are pretty straightforward, ' says Mr Edwards. 'It seems it is a pretty logically inescapable conclusion. ' He argues that the real issue is the supply side, the number of staff available, which cannot be seen in isolation from funding.

Mr Appleby agrees: 'All the evidence does seem to suggest he is right. '

Securing our Future Health: taking a long-term view . Derek Wanless, www. hm-treasury. gov. uk