Where did NHS money go?
Press release issued: 31 March 2006
Although government has almost trebled expenditure on the NHS, about one third of NHS trusts are now deeply in debt, with many units threatened with closure and job cuts being announced across the country. A new book asks where the money went.
Although government has almost trebled expenditure on the NHS, about one third of NHS trusts are now deeply in debt, with many units threatened with closure and job cuts being announced across the country. Where did the money go?
Recent reports have suggested the immediate answer is staff wages, but in his new book, The Political Economy of Health Care: A clinical perspective, Dr Julian Tudor Hart offers a less comfortable explanation.
The book is published on 3 April by The Policy Press, based at the University of Bristol in the Faculty of Social Sciences and Law.
According to Dr Hart, the policies of first Conservative, then New Labour, governments are transforming the NHS from a public service funded almost entirely from taxation and providing care through its own staff and buildings, into a management agency commissioning care through competing contractors investing for profit. He argues that these policies have imposed business methods and ethics akin to the rest of commercial society.
As a consequence, explains Dr Hart: “This policy necessarily incurs higher administrative cost, obvious from the rising percentage of total spending on health care devoted to administration, transactions, legal support and profit for contractors. In the pre-‘reform’ NHS this amounted to less than six per cent, increasing to 12 per cent by 2004, and approaching 20 per cent today. In the United States, where they use a comparable model to that favoured by the current management consensus, administrative costs account for, on average, over 30% of total costs.
He continues: “Though it is true that weekly wages for many lowest-paid staff are at last reaching the cost of one meal at a fashionable London restaurant, most of the new money has gone into the pockets of a generation of commercial, political, and professional predators, intoxicated by the trading potential opportunities opened by remaking health gain into the ultimate commodity. Cost-effective health care depends on continuity and trust, elements which begin to disappear wherever business penetrate clinical decisions.”
Dr Hart’s analysis reaches beyond the scope of any previous author on this topic as he proposes his own economic analysis of the NHS, derived not from classical theory but from clinical experience in the real health care economy. Using a lively combination of clinical, political and economic argument, he goes to the origins of health gain and shows an alternative way forward where apparent conflicting attitudes to ownership of health care can be united to provide an entirely new social consensus.
Sir Iain Chalmers, Editor at the James Lind Library concurs: "Health care shaped by market forces and 'commodification' does not deliver services efficiently, let alone equitably. For those who support the principal of universal, equitable access to cost-effective health care, Julian Tudor Hart's radical vision of what is needed will come as a breath of inspiring fresh air."
The political economy of health care: A clinical perspective by Julian Tudor Hart is published by The Policy Press. It is available to buy from www.policypress.org.uk or from Marston Book Services, PO Box 269, Abingdon, Oxon OX14 4YN (01235 465500) price £14.99 plus £2.75 p&p.
Julian Tudor Hart was a GP in the Welsh mining village of Glyncorrwg for 30 years, where his epidemiological research and innovative organisation of community care won him an international reputation. He is the author of hundreds of articles in medical journals and past President of the Socialist Health Association.
The political economy of health care is the first in the new Health and Society series of books published by The Policy Press, addressing the diversity of factors which determine population health and how these operate in economic, political, social and cultural contexts.
The Policy Press is the specialist publisher in the UK of social and public policy books, reports, journals and guides. As a not-for-profit organisation aiming to improve social conditions, we are committed to publishing titles that will have an impact on research, teaching, policy and practice. The Policy Press is based at the University of Bristol in the Faculty of Social Sciences and Law.