The NHS will have to charge for more services in future if it is going to survive the financial squeeze over the next few years, says a new report.
Only a long-term freeze in other public service budgets or significant tax hikes could enable the NHS to return to its historical annual growth rate, says the report from the Nuffield Trust, published today.
Researchers considered scenarios for spending on the NHS and social care in England until 2021/22, including a real-terms funding freeze, annual increases in line with any national income growth and a return to average growth of 4% per year.
They concluded that public funding for health is set to be tight, with spending cuts continuing in real terms through 2016-17 and beyond.
The researchers calculated that only spending cuts elsewhere or large tax rises could enable a return to the 4% annual growth to which the NHS has become accustomed. They also float the idea of reducing the range of NHS services offered free of charge.
The report stated: ‘If value-for-money improvements are not achieved at the rate required to bridge the gap between funding increases and demand pressures then access to and quality of care is likely to deteriorate.
‘Serious thought would then need to be given to options for the NHS. These include reconsidering the range of services available free of charge to the whole population or the level of taxation needed to finance those services in the future.’
The report is the first output from a Nuffield Trust research programme that is seeking to assess the scale of the longer term NHS financial challenge and how it can be met.
It comes as the NHS is under pressure to generate £20bn in efficiency savings by 2015 as part of the so-called ‘Nicholson challenge’ and after the Government has set out to allow for a 0.1% real-terms annual increase to the NHS in the 2010 spending review.