What the new government could mean for health services and cover

Published: 12 June 2015How the new Government will affect health care.

The election of a majority Conservative government in May 2015 defied the predicted outcome of coalition negotiations suggested by pre-election polls1.

Health was a key election issue, but beyond the politics of campaign season there has been a focus on the context that the NHS will operate in over the coming months and years: growing service pressures and a lack of sufficient funding.

What might the new Conservative government mean for the National Health Service, with a period of Conservative led structural upheaval and reform behind it?

Politics of health
Now in government, the Conservatives have pledged to find the £8 billion additional above inflation funding by 2020 that NHS England has said is required to meet growing health needs.

The government's priorities are to extend access to GP services, further integrating health and social care, and boosting frontline staff numbers. In the Queen's Speech at the end of May, it signed-up to implementing the NHS Five Year Forward View plan.

Plugging this identified funding gap is to maintain an NHS that keeps pace with the population it serves. As NHS England set out in its Forward View, the health service will be doing things differently, putting a stronger focus on prevention and providing new treatment options, but the reach of the health service is unlikely to grow2

Funding constraints
Protected health budgets over the last five years have been set against significant budget cuts elsewhere in the public sector. Finding the £8 billion in additional funding over the next five years will be in the context of continuing efforts to reduce national debt and difficult decisions on other areas of public spending.

The future pressures on the health service also suggest a funding gap that could reach up to £30 billion over the next five years, should the NHS fail to meet efficiency savings3.
 
Growing health needs
The UK's ageing society is driving demand and resulting in cost pressures4. The Institute for Fiscal Studies (IFS) estimates that health spending on individuals aged between 60 and 65 is more than twice the amount spent on the average 30 year old, and long-term health conditions already account for 70% of the health service budget5.

Policy challenges
At the same time, future health service changes will need to consider the challenges the NHS faces maintaining current levels of service - widely acknowledged, and illustrated, in part, by a series of missed targets across A&E departments during the 2014-15 winter6.

Research by the Royal College of Surgeons in 2014 and separate findings by the Royal College of Radiologists in 2015 found that people were facing long delays for some surgical treatment and month-long delays receiving results for X-rays and scans7.

Delays on access and long waiting times for certain services or treatments in different areas of the country, and concerns over the rationing of care based on stringent eligibility criteria, present a picture of a health service that is not able to meet all needs at all times.

Private demand
Demand for health cover, particularly corporate cash plans, could continue to grow. This may be driven by the improvement in economic growth during 2014, and also as patients seek and respond to greater control over treatment choices (an aim of the Conservative manifesto)8

A continued trend towards patient choice and information, alongside potential restrictions on access to certain services, could also see greater demand for, and take up of, more extensive cover options - to include diagnostics and surgery. This could be where private medical benefits form part of a menu of options for employees or are considered in the design of health plans.

At the same time, the push towards better and more effective prevention may also mean greater business involvement in public health. The NHS is keen to develop new workplace incentives to promote employee health and build on vocational rehabilitation initiatives. 

On top of these considerations for employers, age-related factors are also likely to affect health cover demand. In a Towers Watson/Economist Intelligence Unit survey, a majority of senior executives expected an increase in employees aged 60 and over in the next five years9. This increases the risk that employees will suffer a major medical incident while at work.

At the same time as the government tackles the challenges facing the health service and implements its agenda, the regular review of health plans is likely to be a growing priority.

Sources

1. Election results: Conservatives win majority
Politcal Monitor - Feburary 2015 (PDF)
 
2. Queen's Speech 2015 
The Conservative Party Manifesto 2015 
Five Year Foward View - NHS England (PDF)
 
3. Challenges for health spending (PDF)
Five Year Foward View - NHS England (PDF)
 
4. The changing UK population
Life Expectancy at Birth and at Age 65 by Local Areas in England and Wales, 2011-13
Healthy Life Expectancy at birth for Upper Tier Local Authorities: England, 2010-12 (PDF)
Challenges for health spending (PDF)
 
5. Five Year Forward View - NHS England (PDF)
 
6. A&E in England misses target for whole of winter 
NHS England's winter health check (PDF)
NHS cancelled elective operations, quarter ending 31 December 2014 (PDF)
 
7. Many CCGs are ignoring clinical evidence in their surgical commissioning policies
Unreported X-rays, computed tomography (CT) and magnetic resonance imaging (MRI) scans (PDF)
 
8. Second Estimate of GDP, Q4 October to December 2014 - Key Findings
Inflation Report - February 2015 (PDF) 
The Conservative Party Manifesto 2015
 
9. Is 75 the new 65? Rising to the challenge of an ageing workforce

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