"There's a difference between information and knowledge. It's the difference between Christy Turlington's phone number and Christy Turlington." P.J. O'Rourke
This week The BBC Radio "Today Programme" is examining the results of the large increase in Health expenditure that was initiated in 2000 when Tony Blair committed his government to match the average spend across the European Union. As they note, over the past seven years total health spending across the UK has increased by 2% of GDP ans is now approximately 9.3% of GDP, while cash spend by the NHS alone has more than doubled - by around £55 billion.
Unfortunately, this has not resulted in a dramatic increase in the speed or quality of patient care. Examining how the money is spent:
They show a detailed breakdown of the £19 billion cash increase in spending for the hospital and community health services part of the English NHS from 2004/5 to 2007/8. It is not possible to put together national numbers (a statement that is revealing in itself).
Around 34% of the £19 billion was swallowed up by increases in NHS staff pay. New pay deals - not only for GPs and Consultants, but all NHS employees - have been expensive (and the returns, in terms of better care, higher productivity somewhat elusive so far). Amazing errors have been made: no cap on GP pay packages, for example. Higher prices for NHS procurement further 5%- just simple inflation.
Other cost pressures have arisen too- paying for the consequences of implementing the EU working time directive for junior doctors, paying out on clinical negligence claims and so on. These add up to a further 30% of the £19 billion cake.
Overall, just 31% of the £19 billion - £5.9 billion - is left to spend on developing services, improving the quality of care, meeting targets and so on. So there has been some increase in resources: staff, beds, equipment and so on. The total NHS workforce in England, for example, has grown by 20% between 2000 and 2005; consultant numbers by 25%, nurses by 17%, GPs by 11%, but the biggest increase of all is the number of managers: over 30%
Meanwhile, we know that NHS activity has increased. Total hospital admissions have increased by 1.9 million between 2000 and 2005 - although nearly three-quarters of this has been emergency cases and not elective work. Some numbers: cancer survival rates, for example, have improved somewhat.
The fact is though that although ministers had some information about the system that they controlled, the fact is that few of them, if any, had real knowledge of the conditions on the ground. The spectacular increase in costs has been mostly absorbed by the system without delivering commensurate improvement in patient care. This was predicted by many, and is going to be a function of the bureaucracy.
The time has come to devolve control away from those who rely on information in favour of people on the ground who have real knowledge. Decentralisation and diversity are now going to be the keys for better delivery- and that probably has to mean a far greater use of private sector providers. This may be anathema, but with more than £3 billion being spent on an unnecessary centralised IT system and when two thirds of the £19 billion increase in English expenditure- £12.6 billion- is simply absorbed by the system itself, then it is clear that the case for the end of the current system is becoming ever more persuasive.