How bad does the NHS crisis need to get?

Back in January, at the peak of the 2022/23 winter crisis, I wrote a post on my Substack ⁶ Freedman S, Comment is Freed, https://samf.substack.com asking “whether the NHS is in a death spiral”? It was gloomy. I didn’t see much evidence that the government had grasped the severity of the situation or were focusing on the right levers.

I’m not feeling any less gloomy now. If anything this year is going worse than I expected. We are now in the summer, when things should be quiet, and from the lack of media coverage you might think they were, but sadly not. In May over half a million people waited more than four hours in A&E. Not much more than a decade ago that number was negligible. Tens of thousands are waiting 12 hours or more. There can be no doubt this is killing many thousands of people. Excess mortality in 2023 is running above the five-year average, which includes the pandemic years.

Meanwhile elective waiting lists continue to rise with over 7.4 million people now waiting for treatment, 220k more than when Rishi Sunak pledged to bring numbers down in January. What happens next winter will depend, in part, on how bad Covid and flu seasons are, and whether they coincide. But there is no reason to believe 2023/24 will be any better than last year, and it could well be even worse.

Despite the relative lack of attention in Westminster, it remains a key issue for voters, only narrowly behind the cost of living. Patient satisfaction with the NHS is the lowest it has ever been. Worsening health outcomes are also harming economic growth and at least partly responsible for the extremely constricted labour market. The number of people who are economically inactive due to ill-health is now at a record high of 2.55 million. Fixing the NHS should be a top priority for the government, and Labour.

Since the start of the year, I have been working with colleagues from the Institute for Government, and my co-author Rachel Wolf, on a project to figure out what’s going on. What follows is my own interpretation of the key findings, and should be taken as a personal view and not that of anyone else who worked on the project. (All stats are taken from the report and not linked to separately).

What’s going on in the NHS?

Since the pandemic there has been a big increase in funding and staffing in the NHS. Over 16% more junior doctors and 11% more nurses are employed than in December 2019. This is not widely appreciated, even within the system. Many of the practitioners we spoke to were surprised to hear that staffing had increased. And you’d be forgiven for not realising given activity levels – in terms of patients seen – are more or less the same as they were in 2019. Given the size of the backlog built up during Covid, this is nowhere near enough. NHS England estimates its needs to be operating at around 130% of the 2019 level to make significant inroads.

Our exam question was why hasn’t activity increased? We couldn’t find much evidence for some of the potentially plausible explanations. There is no data to support the idea that patients are now sicker on average. Covid protocols that caused delays have been largely, though not completely, abandoned. Instead we ended up with a three-part explanation:

1. There is simply not enough physical capacity to support an increase in activity
2. Even though overall staffing has increased, many experienced doctors and nurses have left; and
3. The system is catastrophically undermanaged, both in terms of quantity of people and the operational constraints they face.

Physical capacity

I noted back in January our lack of hospital beds compared to other countries. Germany has six for every thousand people, Belgium has five, we have two. This helps explain why our system was so vulnerable to the pandemic. It was already running on the edge of capacity before it was hit. This is exacerbated by having 10% of beds taken up by people who have no medical need to be in hospital. They are mostly there because of capacity problems beyond any hospitals’ control, such as the lack of social care provision or the fall in community nursing numbers. Lack of management is also a factor with discharge processes often taking much longer than they should.

But even if you invested in, and improved, social care, which is a huge and expensive task in itself, we would still be seriously short of beds. The calculations on which historic bed reductions were made have simply not come true. Since 2010/11 available beds have fallen by 5% but admissions have risen by 15%. Improved surgical procedures and so forth are being counteracted by an aging population. The resistance to accepting this basic and obvious fact across both main political parties, and much of the NHS hierarchy, is genuinely baffling. It’s almost as if people don’t want to accept such a boring and old-school solution is the answer. Surely technology will intervene to mean we don’t need to build more hospital space? Surely there must be a cleverer answer?

I really don’t think there is. Health Foundation analysis suggests we will need somewhere between 23,000 and 39,000 beds by 2030/31 just to maintain 2018/19 levels of care – a 15–25% increase on now. There are no plans to build anything like this number. Nor is using private capacity the answer. We already do and there isn’t much of it in the UK.

Beds aren’t the only physical capacity constraint. A large part of the outpatient waiting list is caused by lengthy delays for diagnostic equipment. Some of this is due to vacancy rates in key roles – like radiology – but much is just a lack of machines. The UK has the fifth lowest number of CT and PET scanners and MRI units per capita in the OECD: 16.5 per million people, compared to an OECD average of 44.8. It’s the same story on IT. I was astonished to find that well over 20 hospital trusts are still using paper records in 2023. Elsewhere doctors and nurses are wasting inordinate amounts of time on computers that should be in museums.

The root cause of all this is that we have never invested enough in physical capital. Our day to day spending is around the OECD average, and has been higher in recent years, but our capital spend has been around half the average. Even the budgets that have been allocated to capital have been raided for emergency needs. The basic laws of economics will tell you that if you put all your investment into labour and little into capital then productivity will get worse and that’s what is happening. It’s an appalling misuse of taxpayer funds and classic short-termism. As a result, we are employing more doctors and nurses and then wasting their time while they try to free up a bed; or sit with an A&E patient for whom a bed cannot be found; or spends hours trying to book a diagnostic test; or wait for the agonisingly slow computer to wake up.

Staffing

Data on NHS staffing is limited. We can see overall numbers are up a lot. We can see churn has increased, with more people leaving than ever. Naturally this means many more staff are relatively inexperienced. For instance, there are 35% more registered nurses with less than five-year experience than in September 2017, but slightly fewer with over 20 years’ experience. Increasingly the most experienced consultants are not working full time – up to a quarter now, according to a Royal College of Physicians survey.  

This all means that capacity problems are made worse as the lack of experienced staff creates bottlenecks. For instance, experienced ward nurses are needed to manage bed flow in extremely constrained circumstances. A&E consultants told us they were having to spend time on triage and routine tasks like blood tests as there were not enough experienced nurses to do them, which stopped them from treating patients. There are shortages in key diagnostic roles. Moreover, the big increase in use of agency staff is not only very expensive but also leads to people who don’t know the systems and processes of that particular hospital having to fill in gaps.

There are several other hypotheses around staffing for which the data is not good enough to address properly. One is that an increase in recruitment from outside the EU – more than 50% of nurses and doctors recruited last year came via this route – is causing more churn. It certainly feels like a risk given higher salaries available in other countries, and we heard anecdotally this was causing problems. We are, in any case, going to be dependent on international recruitment for some time, even if the government adds more training places for UK staff, given the lag time.

It was also hard to quantify the impact of falling morale on discretionary effort. That it is falling is clear enough from the NHS staff survey, with pay being the fastest growing cause of unhappiness. This is why we are seeing more people quit. Nuffield Trust analysis has shown that “in the last decade, the numbers pointing to work-life balance, promotion and health as reasons to leave have all roughly quadrupled.”

What is less clear is whether the staff that have stayed are doing less than they did before. The NHS is hugely dependent on unpaid overtime, which is a problem in itself, but it’s not clear if this is falling as it’s not measured. It’s certainly the case that the doctors and nurses we spoke to remain committed to the job despite their frustrations.

But given the high leaver rates, and falling morale, at a time of crisis, it remains utterly baffling to me that the government are continuing their industrial dispute with doctors (and the Royal College of Nursing). Against tough competition this has to be the most astonishingly myopic public spending decision I have ever seen. It is already costing us dearly.

Management

It is well known within health policy circles that the NHS is severely undermanaged compared to other systems. The UK spends less than half the OECD average on management and administration, which is why I bang my head against the nearest wall whenever I see a newspaper splash bemoaning fat cat managers, or yet another politician promising to get more resources to the “frontline”. It is, of course, the case that if frontline staff are not properly supported they end up becoming expensive admin staff themselves (see also policing). Meanwhile, the number of managers per NHS employee has fallen by over 25% since 2010 due to deliberate policy decisions from the centre of government, particularly Andrew Lansley’s disastrous “reforms”.

But simply adding more managers is unlikely to work. They also have to have the powers to make a difference, and the right incentives to follow from the centre. Over the past decade managers have become considerably more constrained. One obvious example is in the ability to invest in capital, which, as we have seen, is a big problem. More and more bureaucratic constraints have been put in place to allow the centre to manage limited resources, costing a huge amount of management time and limiting effectiveness.

There has also been a big increase in the range of targets hospitals have been responsible for – including many “quality” targets which are essentially about process rather than outputs. This has led to hospital analysts spending a lot of time providing information to the centre rather than supporting the needs of management within their hospital. It is has also created confusion as to what trusts are supposed to be doing. Activity targets, which have remained, albeit heavily watered down, from the New Labour era, have been competing with quality targets, creating contradictory objectives and limiting autonomy. The Blairite targets, like the four-hour one for A&E, were criticised for being too simplistic, but setting a minimum standard is all such targets can do. And they achieved that, a success that has now been completely undermined.

Meanwhile the central bureaucracy has grown to manage all this complexity. There are fewer managers but more managers managing the managers. The latest approach – integrated care systems – designed to bring different parts of the health system into the same regional structures – makes some sense in theory but risk adding to this complexity. The lack of clarity as to what they are supposed to be achieving is concerning, and we’ve already seen the Secretary of State slash their funding, which can hardly help.

It’s hard to untangle the reasons for the relative success of the NHS during, and just after, the New Labour years. How much was it due to large annual funding increases and how much was a simple focus on a handful of indicators backed up by strong financial incentives in the form of payment-by-results? It’s certainly the case that simultaneously keeping to very tight spending increases (as was true from 2010-2019) and significantly increasing the complexity of the system, while also reducing management capacity, was a very bad idea.

The death spiral

In my January post on Substack, I asked if the NHS was now in a death spiral. Writing this report has in some ways made me more positive. There are some obvious things that could be done to alleviate the crisis, even if they would take some time to have an impact. While the NHS is a complex system many of the problems described above are plain to anyone paying attention, and have been well documented. Moreover, staff commitment is, despite the workload and the strikes, stronger, I think, than I gave it credit for.

But, and it’s a big but, I remain extremely depressed at the refusal of the government to engage properly with these issues. There have been some small improvements, such as reducing the number of targets and re-focusing attention on activity; investment in some diagnostic centres; and growing use of virtual wards (where patients are treated at home), which might help with bed capacity, though there is not yet any evidence of their effectiveness.  

Overall though we are drifting further into crisis due to a stubborn refusal to accept the obvious. Doctors need to be paid more. There needs to be significantly greater capital investment – in beds, equipment and IT. We need more managers, with greater autonomy. Yes this all costs money but at the moment we are wasting enormous sums on a low productivity system.

Labour have been little better, desperate to avoid committing to more resources given their fear of being seen as big spenders. It is deeply frustrating hearing people talking about reform versus more funding as if they were opposites. Yes, the system needs reform but that can only be achieved with investment. In the long run it will save money (though let’s not kid ourselves that the NHS is ever going to get cheaper given demographic change) but not over the next few years.

We wrote this report to satisfy our own curiosity but also in the hope it might help create a better conversation about the NHS during the election campaign. We don’t need a completely different model. This one can work. It did very recently. But we desperately need honesty about what it will take. I would say that what’s coming this winter should focus minds, even if nothing else does, but the last one doesn’t seem to have done so, and that was horrific enough.

This comment piece was first on Sam Freedman's Substack. ⁸ Freedman S, How bad does it need to get?, Comment is Freed, 14 June 2023, https://samf.substack.com/p/how-bad-does-it-need-to-get?utm_source=twitter&sd=pf