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Maltby Harriet

Harriet Maltby is a Government and Economics Researcher at the Legatum Institute and a former Senior Parliamentary Assistant.

“You’ve got to be kidding me”. That was the reaction of one NHS employee when it was suggested that a mild winter may lessen the strain on A&E.

Just 6 of 140 major A&E trusts are currently meeting the target of seeing 95 per cent of patients within four hours. In my local hospital, nearly 2,000 attended A&E in a recent week, of which only 30 per cent were emergency admissions. On average, 70 beds are filled by elderly patients who are well enough to be discharged, but there are no relatives or local authority care services to send them home to. That equates to a daily cost to the hospital of £17,500. The local commissioning group, to try and control costs, announced that hip and knee replacements would not be provided to those over a certain BMI unless they lost weight. The backlash was so great they were forced to back down.

This is the reality of my (comparatively top-performing) local hospital. It is the same and much worse elsewhere. We are an ageing population, we demand ever more expensive and innovative treatments, and the difficulties of getting a GP appointment send many to A&E with non-emergency complaints. The result is, despite an increasing budget, the NHS faces major financial difficulty.

Possible answers to these pressures: immigration, rationing, or GP co-payments are all politically unpalatable. There is tacit agreement at Westminster that the NHS is unaffordable, but no political will to secure its future. We are stuck instead with a short-termist game of political one-upmanship which involves throwing money we don’t have at a problem that money alone cannot fix. Even with extra spending promises, the NHS faces a £30 billion deficit by 2020. We require a more radical solution.

There are a number of radical ways to address excess demand, many of which require a degree of political realism that does not currently exist, particularly within the Labour Party. There is however, one cost-saving measure that would require no change to the structure or form of the NHS, but has the potential to cut as much as 14 per cent out of the budget. In 2012/13, that amounts to £15 billion. It is the humble Oyster Card.

In England, around 16 per cent of the annual health spend is swallowed up by administrative costs. Whilst far short of the 25 per cent that the US spends every year, it is still higher than many European countries. Canada spends 12 per cent. In contrast, Taiwan spends just 2 per cent.

A major part of this remarkable efficiency in Taiwan is the use of Smart cards, a credit sized card that holds electronic data about the holder’s identity, medical history, visits to health facilities etc. This has greatly improved administrative and provider efficiency in Taiwan. It also makes life easier for clinicians who have instant access to a patient’s medical and usage history. The amount of money wasted in the NHS duplicating diagnostic tests because one hand doesn’t have access to the x-rays or blood results that the other hand generated is significant. Technology could eradicate this waste.

It can also provide cost saving information in another way. Speak to any local authority housing and social team and they will tell you that the majority of their council’s welfare costs are generated by a handful of families. Such knowledge has enabled the Coalition’s Troubled Families programme that aims to solve the deeper problems rather than continually deal with the symptoms. Smart card technology in the health service can provide notification of high use patients, enabling a similar approach aimed at reducing the long-term cost to the health service rather than treating the symptoms behind each visit to a GP or hospital.

The technology does not just have its benefits for the state. Smart cards have the potential to improve patient choice too. They would allow for the easy introduction of personal budgets for care, with the budget being loaded onto the card for the patient to spend as they choose. We have already seen this innovation through a voucher system for social care introduced by some councils. Smart Cards would extend its potential application and make wide implementation much easier.

There are caveats. Such a system would require a significant upfront capital investment, but nothing compared to what we are already spending on infrastructure projects. Scepticism is best reserved, given past experience of NHS IT projects, for whether the government is actually capable of delivering a functioning system of this scale to budget. Perhaps here, as elsewhere, the state is the biggest obstacle to saving our universal health system. As it stands, it is only a matter of time before “you’ve got to be kidding me’” is the reaction to the suggestion that the NHS, as is, can be saved.

69 comments for: Harriet Maltby: A way to save up to 14 per cent of the NHS budget

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