Tight NHS funding could force changes to public healthcare

The financial squeeze on the NHS in England could last for at least a decade and have the knock-on effect of highlighting alternative, workplace-based healthcare provision, research has argued.

An analysis by the Institute for Fiscal Studies (IFS), funded by the Nuffield Trust, has plotted future spending scenarios for the NHS in England and examined their consequences for other public-service spending and taxation.

It has also argued that the real freeze in NHS spending, which is planned to run until 2014/15, will, if delivered, be the tightest four-year period of funding for the NHS in the past 50 years.

In turn, meeting the Government’s tight plans for public spending pencilled in for 2015/16 and 2016/17 will require real spending on public services to be cut by an average of 1.7% per year over these two years.

Carl Emmerson, deputy director of the IFS and co-author of the report, said: “Serious consideration should be given to the options for the NHS, which include reviewing the range of services available free at the point of use and reconsidering the level of taxation needed to finance them.”

The research has prompted private healthcare providers to question how the burgeoning healthcare needs of the working-age population are going to be met as a result, with AXA PPP healthcare, for one, suggesting this may mean that the Government will increasingly turn to employers to do more.

In addition, Ronjit Bose, commercial director of Jelf Employee Benefits, said that “even the mere talk” of NHS services no longer being free at the point of use could mean that employer-funded schemes will begin to look more attractive to employees.

“We are also likely to see employers and employees using [private medical insurance] as a bargaining tool during the recruitment process, particularly during times of economic uncertainty and widespread salary freezes,” he added.

In a separate study, Benenden Healthcare Society has highlighted a growing lack of confidence among the general public in the ability of the NHS to provide good-quality healthcare in the future. The study of 2,034 adults found that just 41% believed the NHS would be there for them in 10 years’ time, with an additional drop to one adult in three when looking further ahead to 20 years’ time.

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