Brexit could hit NHS if economy flatlines

By Danny Buckland/ Raconteur

Despite promises of extra cash for the NHS, health services in Britain could face severe trauma following the vote for Brexit ,The big red bus emblazoned with the pledge to channel £350 million in European funds to the NHS is one of the most enduring and incendiary images of Brexit. Fronted by Boris Johnson and a series of high-profile Leave campaigners, it symbolised a high watermark in the divisive public campaign for Britain’s future.

Its significance in persuading 58 per cent of the public to turn away from Europe will be debated well into the future, but the present problem is how to stabilise the NHS as it lurches towards a critical existence on financial life support.

The health service’s ability to withstand sudden surges is being questioned as it expends every ounce of capability dealing with ever-rising demand and an inexorable demographic tidal wave. The population is growing and we are living longer with more chronic conditions at the very time national finances are being squeezed by global economic forces and the uncertainty caused by the referendum decision to leave the European Union.

The NHS is largely funded by general taxation, so its fiscal health is linked to the state of the economy. With two-thirds of NHS trusts in England running a deficit, the balance is precarious.

Economic ice age

Despite huge criticism, the last two governments have spared health the full blade of its austerity cuts, but the fallout from Brexit contaminates the NHS’s future. Aside from the ideology, the cold numbers post-referendum are chilling: the UK’s trade deficit widened to a seven-month high in August and the pound slipped below $1.30; it was $1.50 pre-Brexit.

Markets fluctuate on trading positions unrelated to public health services and their capricious nature alone is no reason to push the panic button but, taken with a prolonged period of efficiency savings or cuts, the fear is the NHS is being hampered by the frostbite of an advancing economic ice age.

“The direct impact of Brexit is already happening and one of the key issues is related to the value of sterling. If people in the NHS are working here partly on the basis of sending money back home, then the value of that money has plummeted,” says Sally Gainsbury, senior policy analyst for the Nuffield Trust, the independent health research charity.

“This is compounded by the fact that NHS wages have been all but frozen for the last five years and few people think Brexit will have a positive impact.”

A down-graded economy will make it harder for NHS trusts to keep pace with the 4 per cent annual savings required to bridge a funding and delivery gap of around £22 billion over the next four years. NHS costs are basically outstripping funding, but the government believes 4 per cent annual savings will balance the books.

“That level of saving has never been achieved and doubles what has been possible over the last four years of cuts,” says Ms Gainsbury, whose report Feeling the crunch: NHS finances to 2020 questions if the NHS can make the savings without compromising services.

“The ability of the NHS to withstand shocks such as a sudden winter crisis has been degraded; people are saying that winter lasts all year in the NHS now. There is already an inability to deal with the volumes of patients coming through and it will take three years of double those cost cuts before we would have some money to invest,” she says.

“In an ideal world, commissioners will be able to come up with schemes that successfully and genuinely reduce demand for NHS services or reprovide services in different settings that are cheaper without damaging public access to health. But I fear the only way they can spend less is by rationing. We already have examples where CCGs [clinical commissioning groups] are raising the thresholds saying you can’t get treatment until you reach X, Y or Z. I think people are now looking at clinical justifications they wouldn’t have looked at before.”

Crude rationing, such as restrictions on hip operations and cataract surgery, will spread with non-urgent operations postponed, she says. It is a view shared by the Royal College of Surgeons, which is concerned that patients will be forced to endure longer waiting times unless NHS funds are boosted.

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