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The Hopson Ultimatum

The Andrew Marr Show

So why did Chris Hopson do his outburst at the weekend?

This is the one where we warned about the parlour state of the NHS finances.

I personally don’t understand the obsession of NHS managers and politicians with the notions of “productivity” and “efficiency”, because I come from an area in medicine where adding “value” is more important. I think of productivity as a hang up of an widget counting ethos, so beloved of management accountants, in synchrony with a widget factory ethos of management of Frederick Taylor.

McKinsey originally suggested these ‘efficiency savings’ whereby the NHS could aim to contain its budgets, but we all know this is double speak for cuts.

Stephen Dorrell MP, former head of the influential Commons select committee, warned that it had never been done before, so we were in unchartered territory. The Labour Party, as it was then, were fully signed up to this draconian programme of austerity.

Especially when NHS Trusts are trying to balance the budgets, or cook the books, to account of the massive spend on agency staff and PFI corporate wongaesque loans, the idea of ‘efficiency’ has become toxic and frankly ludicrous.

Nonetheless, Chris Hopson CEO of NHS Providers continued with the myth this weekend:

“But NHS trust bosses are now ringing that bell – we face a stark choice of investing the resources required to keep up with demand or watching the NHS slowly deteriorate. Trusts will, of course, do all they can to deliver efficiency savings and productivity improvements. But they are now saying it is impossible to provide the right quality of service and meet performance targets on the funding available.”

These performance targets are only as good as the wisdom in their selection. I ‘get’ the fact that these targets do not include doctors’ morale or nurses’ wellbeing, but even on the more conventional targets such as delayed transfers of care, delayed discharges, or waiting times, Jeremy Hunt is missing by a country mile. And of course the whole ethos of simultaneously many people working their butt off under incredible pressure, while some CEOs are sitting pretty with inflated salaries despite catastrophic failure, is an enduring one of Hunt’s NHS culture. (And of course the relentless lack of statutory whistleblowing protection for junior doctors in training – see the Dr Chris Day case).


As the junior doctors’ dispute shows, it is also untenable to ask NHS staff to close the gap by simply working harder and harder.

“Faster, faster!”

All this reminded me of this tweet I had once made:

This is a reference to the Baumol “cost disease”.

In some sectors of the economy, however, such productivity gains are much harder to come by—if not impossible. Performing a Mozart quartet takes just as long in 2012 as it did in the late 18th century. Mr Baumol calls industries in which productivity growth is low or even non-existent “stagnant”.

In some sectors of the economy, however, such productivity gains are much harder to come by—if not impossible. Performing a Mozart quartet takes just as long in 2012 as it did in the late 18th century. Mr Baumol calls industries in which productivity growth is low or even non-existent “stagnant”.

The most parsimous explanation for the outburst of Hopson is the up and coming autumn spending review to be done by the new Brexit Chancellor.

Hopson remarks:

So what does give? A range of options are now open to political and NHS leaders. Additional funding is the most obvious, with the new government’s first autumn statement on 23 November providing an immediate opportunity.

Something has to give. This is particularly so since NHS funding increases are about to drop from 3.8% this year to 1.4% next year and 0.3% in 2018-19. As total NHS demand and cost rises inexorably, by at least 4% a year, this will mean even larger gaps after seven years of the deepest and longest financial squeeze in NHS history.

We know that demand has always outstripped ‘supply’ since the NHS’ conception, but the solution of tackling this demand by greater supplier competition in markets through the Health and Social Care Act (2012) was deeply flawed. It itself produced an opportunity cost of billions. There seems to be a lot of money for war but not for building hospitals, so it was entirely predictable that a lot of money got siphoned off into corporate restructuring management consultants and to paying off dismissal claims (and confidentiality agreements) for managers of PCTs, rather than frontline care. Nurses receiving yet another pay freeze “would not complain”.

That Doctors feel that they cannot cope with delivering safe care under the new contract should be a reason for their regulator to be concerned. As it is, anyway, the BMA recommended the ‘new contract’ which it had negotiated, and was left with the situation that a large number of junior doctors did not like the contract (for example for safety issues or gender pay gap issues, inter alia), and the attitude of whether to go on strike was “complicated”.

The media have generally portrayed junior doctors to be some mob of crypto-anarchists or Trotskyite agitators, and have regularly misrepresented the dispute as one simply of pay. The manifesto pledge from the Conservative Party was not actually to impose a contract on junior doctors or other staff, but to implement a 7 day NHS; but we know that in the absence of funding for a 7 day NHS with ancillary staff, and with corresponding funding in the rest of the system, it is impossible to deliver a 7 day NHS. The junior doctor contract correctly was seen as a way of putting 5 bags of sugar into 7 containers.

But the Hopson ultimatum is dire. Taken at face value, it appears to mandate the Chancellor into maintaining   NHS spending. Every time a Conservative minister ‘defends’ NHS spending, it is always said that the level of spending is what Simon Stevens, CEO of NHS England asked for.

Stevens remains inconveniently quiet on this. NHS spending is “ring-fenced” and social care is not, but the whole notion of ‘ring fencing’ has become dubious given the increased costs of everything and increased demand of the NHS. And the ‘elderly’ (horrible term) are not simply to blame for this bill, as many children and young people are benefitting from costly interventions.

SO while the NHS continues to trot out infograms and ‘calls to action’ like no tomorrow, sneaking in under the RADAR is that dreaded term ‘sustainability’.

Hopson says:

NHS trust leaders rightly argue that this piecemeal approach is unsustainable. It is not tenable to ask local leaders to deliver the impossible, make unpopular local decisions as quietly as possible and then carry the can when the decisions become public.”

And we’ve been here many times before. For example, The King’s Fund report, Deficits in the NHS 2016, published on the 11th July 2016 argued that due to increased level in demand of services the NHS is fast becoming ‘unsustainable’.

Unsustainable means chronic underfunding of the NHS.

Hopson produces a menu of other options

If, however, there are is to be no extra funding, the NHS must make some quick, clear choices on what gives, however unpalatable these choices may be. The logical areas to examine would be more draconian rationing of access to care; formally relaxing performance targets; shutting services; extending and increasing charges; cutting the number of priorities the NHS is trying to deliver; or more explicitly controlling the size of the NHS workforce. These are all approaches adopted by other public services such as prisons, local government and the police when faced with similar funding challenges over the past decade – though they would clearly provoke public unease and ministerial anxiety if applied to the NHS.

And the “logical areas to examine” would be a fast track to having a 2-tier health service. Get some astroturfers and the House of Lords Sustainability Committee, perhaps along with a cross-party parliamentary commission to boot, with a dash of the Socialist Health Association, to sign up to the meme ‘we can’t afford the NHS’, and then the machinery came come into action to produce a bargain basement NHS covering the very basics. The second tier consists of the private insurance market, where the profitable bit called ‘prevention’ is emphasised (see the rationale for the HMO Act 1973 in the US and President Nixon.)

The major problem with the “free at the point of use” meme, even used by Owen Smith and other Conservatives, is that it takes no account of the comprehensive nature of the NHS. If the railway network only comprised routes which were profitable, there’d be no train service to some remote part of Scotland; the equivalent is not bothering with people with ‘expensive’ rare diseases. When you get rid of the need for comprehensiveness or universality, you can ration to your heart’s content – starting off with cataract operations, but then building up to ‘NO’ for bariatric surgery.

Then you can twist the “taking responsibility for your own health” meme into a direct accusation of blame. In other words, “we don’t want to pay for treatments for these fat people as they ate too much” or “we don’t want to cure this lung cancer as they smoked too much.” This can all be dressed up under the gloss of ‘choice’ and ‘control’, and the ‘tough decisions’ CCGs have to make.

Hopson warns about the NHS finances, and Hunt ‘responds’ by maintaining NHS spend – all pretty twee and orchestrated, and everyone’s happy.

Well – they’re not. The nurses are taking out loans to be educated, the doctors are stuck with a contract they don’t want, certain failed NHS CEOs appear unsackable, social care is on its knees, and Hunt appears to have a job for life.




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