National Health Service — Motion to Take Note

Part of the debate – in the House of Lords at 1:41 pm on 14th January 2016.

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Photo of Lord Desai Lord Desai Labour 1:41 pm, 14th January 2016

My Lords, as a professional economist—the only one speaking in this debate—I should say that any service that is free at the point of use will perpetually suffer from excess demand. The NHS is no different; more or less since its founding, it has faced a continuous demand for more money and the public fisc has been unable to quite meet it, so we have had a history in which it is perpetually in a funding crisis. At the same time, though, there is a great deal of satisfaction with the service, so we need to understand how it works.

We have to be careful about the fact that the percentage of GDP spent on health is not a good measure of outcomes; it is a measure of inputs. As someone has said, we have one of the best-ranked health services, despite not being the highest-spending nation. The highest-spending nation is probably the United States, which has a lousy health service.

Having said that, we need to make the user more aware of the costs of the service, as my noble friend Lord Brooke said. In many previous debates, I have suggested that every user of the NHS be given an annual return showing what they have used it for and how much that has notionally cost the NHS. They should be made aware that even if they miss an appointment it costs money. Whatever they have had, somewhere it has been paid for. They do not have to pay for it themselves, but they ought to be made aware that there is a cost to each thing that they do or indeed do not do. At the same time, we ought to provide people with another sheet of paper showing how the total NHS money is spent, just for information. People ought to understand what their money goes on. Right now they do not understand, and they take it for granted.

I shall say just one more thing because my time will be up very soon. We have made all sorts of predictions about what proportion of GDP should go on health. I can more or less tell the House, with all the certainty that I can command, that the era of high growth is over and that for the next 10 or 15 years the GDP growth rate will not be high, and nor is inflation. Whatever we do, we will have to find ingenious ways to achieve efficiency, perhaps by nudging users to be more economical with their use of the NHS, and somehow changing behaviour so that we do not always take for granted that there will be more money, and if there is not more money, it is someone’s fault. One of the last—no, I do not think I have any more time.