Lessons for the future

Summary

Over the past two decades the quantity of what the NHS does – the amount of activity – has doubled and this increase has outpaced the growth in demand that arises from demographic factors. Overall, our analysis suggests that the amount of care provided by the NHS since 2000/01 would have needed to grow by around 1% a year to meet the demand pressures arising from these demographic changes. This means that more than three-quarters of the growth in NHS care since 2000/01 is the result of other factors relating to demand, supply, political priorities and health care policies.

The growth in excess of that explained by demographic change varies across different services, showing that the drivers affect different services in different ways. For example, changes in morbidity affect demand differently – a reduction in the prevalence of injuries amongst younger people reduces the demand for A&E, but not to the same extent demand for outpatient services. Similarly, some services are more affected by technological progress – eg prescriptions of drugs (new drugs become available and the price of existing drugs reduces). Variation between different time periods is often the result of prevailing policy priorities (eg the push to reduce waiting times in the first decade).

Looking at the overall changes in the volume and pattern of care provided over the past two decades, it is clear that some of the changes have been despite – rather than because of – the stated policy goals of successive governments and system leaders. Indeed, we have seen things happen that fundamentally counter the stated intentions.

This leads us to suggest six lessons for the future.

1. In the long term, what the health care system does is largely determined by choices. Clear population health goals are needed to help steer these choices.

The contribution of demographic factors to growth is relatively small. Other drivers of change are not well understood, but are within the influence of policymakers if we consider the full range of policy instruments available, especially over a longer time horizon.

We have seen significant shifts in the composition of services and in what the NHS does. But it is not clear whether the changes observed have maximised the health impact of the NHS in England. Decisions have increasingly focused on processes and the organisation of the system, while leaving the overall goals of the system, such as reducing inequalities and increasing life expectancy, less clear. We need clearly stated population health goals against which to judge the decisions taken.

2. A better understanding of the contribution of different services to population health, and what this means for the future composition of NHS services, is required.

The shifts in activity we have observed have not necessarily been in line with those needed to meet the changing patterns of the population, or those that would make the biggest contribution to population health. For example, the growth in the prevalence of multiple long-term conditions suggests that there should have been a relative shift in activity towards prevention and primary care services; this has been the policy rhetoric too.

If the NHS is to maximise its contribution to population health, there is a need to better understand what composition of services the NHS should have going forward. This means developing a better understanding of the changes in patterns of morbidity.

It also means understanding the contribution of different services to improving health. Over the period covered here we have seen a rapid growth in hospital services. This growth started with the aim of aligning the NHS with similar countries internationally, in terms of access to hospital services and care outcomes. However, this has led to hospital activity crowding out other forms of activity. We therefore need a better understanding of the value of additional hospital activity compared to the value of other services in addressing the challenges of the future. These include contributions to improving healthy life expectancy and reducing inequalities.

3. A systematic national projection of future trends in morbidity is needed to inform national and local NHS planning.

Research on the sustainability of health care systems consistently shows that the future path of morbidity is a key determinant of future health care demand and funding requirements.

Previous projections by the Health Foundation and Institute for Fiscal Studies (IFS) showed that for 18 conditions the probability of admission standardised for age had increased by 57% between 2007/08 and 2017/18, with the greatest increase for people with multiple conditions – a growing group in the population. The analysis found that if these trends continued for the next decade, long-term conditions would have as great an impact on hospital activity as ageing.

Currently, there is no systematic national projection of future trends in morbidity undertaken to inform national or local NHS planning. This is a clear gap. If changes to the composition of NHS services are to meet the future health needs of the population, we need good projections of those needs. As the types of services needed by different groups of patients differ – from diabetes to cancer – projections need to cover different forms of morbidity, and, increasingly, multi-morbidity.

4. There is a need for more sophisticated models of future activity and health outcomes, incorporating other important drivers of growth as well as demographic factors

We have discussed a number of other drivers of growth within the broad categories of demand, supply and policy. Factors as diverse as workforce planning, morbidity, patient expectations and drugs and technology can all have an impact.

Currently, the exact role these factors play in activity growth is not well understood. Consequently, these are rarely included in future projections of activity. There is a need for more sophisticated models to project future activity that include other drivers of changes, as well as the underlying demographic drivers.

The REAL Centre will create models incorporating these factors, with an initial focus on modelling the workforce (starting with nursing supply and the social care workforce), and the impact of changes in risk factors on morbidity and subsequent health care use.

There is growing analytical capability within the NHS, but further investment is needed to ensure analysts have the skills they need (eg capability in systems dynamics modelling or marginal analysis). This also includes the space and cultural environment where this type of work and research is valued and supported.

5. Technology is one of the most powerful factors shaping both demand (a new treatment makes it possible to address an unmet need) and supply (drug therapies replacing complex surgery).

The UK is a world leader in research and the NHS makes a vital contribution supporting clinical trials. Innovation is inherently unpredictable and complex, but that makes it more important to try to understand the forces shaping decision making.

New technology has been a key driver of activity, but it may not always have provided value for money. How technology is funded and adopted is very much under the influence of policymakers, though this influence could be extended and strengthened. NICE, for example, appraises new technologies and recommends whether they should be funded by the NHS.

6. Shifts in activity take time and there is a need to be realistic about what can be achieved.

Many of these shifts have evolved gradually over time. Some trends have been the result of decisions taken decades earlier. Once allocations in spend are set, it is difficult to make major changes during an annual budget review. Changes are easier at the margins (when allocating additional funding); divesting from services is much more challenging.

Likewise, it takes time for individuals working at the NHS front line to respond to policy frameworks and incentives. Some initiatives, such as targets, may be politically difficult to remove. Although decisions may make sense when seen locally and at a particular point in time, from a global perspective and in future years they may not be seen as optimal.

A better understanding of the factors we have discussed combined, with better approaches to dealing with uncertainty and the dynamics of the system, will help policymakers recognise the limits of what can be changed, to what extent and how quickly.

In summary, what is needed is a strategy for investing in the NHS based on evidence, analysis and modelling. This needs to able to be adapted regionally to allow for differences in population health and health care system.

Conclusion

The past two decades have seen significant shifts in what the NHS does. While activity overall has doubled, growth has not been spread equally between services.

In hospital care, particularly in planned care, we have seen growth far beyond what we would expect due to demographic changes alone. In some ways this demonstrates the impact policymakers can have. An issue was identified: long waiting times for a number of planned procedures, linked to adverse health outcomes. Funding was increased, specialised staff recruited, and high-profile, politically important targets set, supported by technological advances. In many ways this is a policy success – activity grew, waiting times for routine treatment went down.

However, this focus on hospital care has had consequences. Although there has also been an ambition to move care into the community, primary and community care services have not seen the same growth and are struggling to meet the demands of a population with an increasing number of long-term, complex conditions.

This illustrates the importance of considering and, where possible, modelling the consequences of different policy choices – and in taking a whole system view. In this report we have outlined a framework for examining the potential factors that influence activity. Sophisticated models take time to build, but considering these factors when new policies are introduced could illuminate potential consequences.

Our work suggests that while understanding demographic trends is important for planning health services, it is a relatively small driver of the growth in care over recent years – explaining less than a quarter of the 4.6% a year average growth in NHS activity. The NHS therefore needs a much better understanding of the demand and supply side factors that collectively contribute to the volume and pattern of care. To do this we need to fill the evidence gaps with more and better research. We need to understand the potential impact of trends in demand and supply, and how policy can influence and shape them. Last but not least, the NHS needs frameworks and approaches to using this evidence, which help it to make better decisions given the inherent uncertainty and complexity of the factors shaping the health system.

The NHS faces a number of important decisions as it emerges from the COVID-19 crisis, posing an opportunity to align future investment more closely with the changing health needs of the population. The REAL Centre will work to provide evidence and analysis to inform these decisions and build on our understanding of the factors influencing growth.

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