Social policies have been an integral part of the European Union, and they have commendably been effective in stimulating economic growth in the bloc. Many countries around the world have continuously admired the European social model. However, the gist and flavor that the model used to have before the 2008/2009 financial crisis is quickly waning (Grozelier et al., 2013). The crisis exposed the model’s soft underbelly hence prompting the region to consider austerity measures. Through the years after the financial crisis, European Union member countries such as the UK have continuously reformed the fundamental elements of the social model (Grozelier et al., 2013). The reforms have focused on such areas as social protection, workers’ rights, and pensions. The most affected area in the UK, however, remains the National Health Service (NHS) program, which has been marred by a lot of hiccups in the recent past. As a result of this, the UK and the EU at large are losing their legacy considering that analysts are highly concerned about the sustainability of the healthcare system (Vaughan-Whitehead, 2015). The current paper focuses on the sustainability of health system in the United Kingdom by looking into the short and long-term economic implications of the NHS associated social policies.
The National Health Service is the name given to UK's publicly-funded healthcare system. The system is funded primarily by taxation, and it aims at providing free and low-cost healthcare services to all citizens and legal residents in the UK. The program is run by the Department of Health while the healthcare providers maintain the patients’ records and ensure that the patients comply with the program’s regulatory standards. Various regulations, including the Data Protection Act, have been enacted to ensure the efficient running of the system. In one of the most recent legislations, the Public Services (Social Value) Act of 2012 was enacted to bring transformation to the NHS. The act asserts the fundamental role that the NHS plays in the economy but also proposes the active redesigning and delivery of social values with fairer health outcomes and fewer environmental and financial resources (Grozelier et al., 2013).
The major problem with the way the NHS operates is the issue of funding. It is the very issue that prompted the need to transform the program. In light of the recent events in Greece, policy makers around the world and more so in Europe are worried that the global health system in the UK, as it is now, is not sustainable. The demand for healthcare services is on the rise; the population is continuously increasing with the elderly people and infants heavily contributing to the population dynamics. People seem not to take their health seriously as indicated by the trends in feeding habits and the lack of exercise among the population. The technology in the health sector is either obsolete or quickly edging obsolesce which means system requires to be replaced. These dynamics put the NHS in a stress situation with the staff complaining of undue pressure and the funding requirements increasing by 0.8% annually (Karlsson, Mayhew, Plumb, & Rickayzen, 2006). When the increasing funding requirements are projected, it is predicted that the NHS will have a deficit of more than £30bn by 2020 (Vaughan-Whitehead, 2015).
The shifting funding dynamics have pushed the NHS to the precipice and, to avoid a disastrous collapse in the system, the UK government started considering private finance initiatives. At the moment, the private finance initiatives majorly involve foreign private equity investors most of whom are from China. By April of the last year (2015), the government of the UK owed more than £222 billion to the private investors (Vaughan-Whitehead, 2015). The indebtedness of the UK about the social policies has been regarded as UK's greatest financial disaster of all time. Firstly, it comes at a time when the global economy is nearing a recession. Secondly, the recent events in Greece sent shivers across Europe sparking the possibility of several member countries to exit the European Union, and this is why such terms as FREXIT, BREXIT, and GREXIT have been in the media over the last few months (Ferrera, 2014). The third and most serious problem for the UK and the NHS program is the exposure to the Chinese capital markets through the indebtedness. It is a serious problem considering the fact that China has in the recent past devalued its currency twice, the capital markets are tanking, the Chinese economic growth is slowing down, and investment analysts are worried that the next financial crises will be manufactured in China not so long from now. What these events mean is that the PFIs may also not be able to continue financing the NHS and other social programs in the UK and Europe at large, and technically this leads to questions on the sustainability of the NHS system alongside other social programs of the kind (Vaughan-Whitehead, 2015).
Every political regime in the UK attempts to focus on the sustainability of the National Health Services system and in the last regime (2010-015), the government developed a sustainability guide for the NHS before enacting the Public Services (Social Value) Act of 2012 (Petmesidou, 2013). The model proposed several adjustments to the people and placed components of the sustainable development model. However, the paper lacked any coherent proposals on how the financial part of the sustainability model would be improved. Instead, the policy paper stated that sustainability ought not to be confused with affordability, and that is just the much that the financial sustainability of the model (Petmesidou, 2013).
This research paper heavily focuses on the financial sustainability of the NHS, and it is for this reason that the statement above is considered contentious. The paper does not discredit the fact that financial affordability and sustainable development are two different things. However, it also recognizes the fact that sustainability of the system is anchored on three pillars, which can also be termed as the triple bottom line. The three pillars include profit, people, and place. Particularly, the sustainability of the NHS must be considered as a multifaceted agenda, and not a single one of the three faces must be overlooked. That is what the recommendations of the Public Services (Social Value) Act of 2012 and the sustainability guidelines of the NHS that were developed in 2010 did consider that the focus had been on people and places alone (Vaughan-Whitehead, 2015).
The second problem with ignoring the profit perspective of the multifaceted sustainability model is the fact that it is on the financial backdrop that the model is most likely to disintegrate (Jacucci, Shaw, & Braa, 2006). The case of Greece should be enough proof of the importance of profit-focused sustainability goals. Secondly, the mere mention of financial affordability in the 2010 sustainability guide is enough proof that successive governments recognize the fact that unless something is done, the NHS system is highly likely to collapse, and this may have catastrophic impacts on many households in the UK which have not yet recovered from the aftermath of the last global financial crises. Moreover, it is also important to recognize the fact that the word procurement appears multiple times in all sustainability plans published after 2012. The objective of the previous regime was to curb wastages in the procurement process and though this is an opinion, the context in which the word procurement has been used in the sustainability recommendations is also an inherent indicator that the government admits that the NHS is facing increasingly threating financial crisis (Simmonds et al., 2014).
The hard-hitting fact is that the incumbent political regime which was elected in May, 2015 simply inherited a financially dilapidated and unsustainable political regime. Debt is sky-high, and the cost of funding is increasingly unbearable. The global capital markets are struggling in the oil and gas sector. Worst of all, the UK owes China a lot of money and the Chinese government's attempts to regulate the capital markets hurt the debt concessions and commitments that Chinese investors have in Europe. Back at home, the UK fears to degenerate to a point where it might require a financial rescue package and the European Commission is increasingly tightening the monetary policies, yet social Europe is still the bloc's main agenda by 2020 (Simmonds et al, 2014). In light of these harrowing facts, as they pertain to the NHS system in the UK, it is important to look into how the country can enhance the sustainability of the NHS and all other social programs.
Dealing with the financial distress cases of the NHS, first of all, requires the recognition that Europe is built on a social model. It means that no recommendation negating this understanding will help in dealing with the financial crisis. The recent anti-austerity protests in Brussels serve as a proof that Europe is likely to find it very difficult to impose austerity measures on its member countries. Secondly, the case of Greece proves that even under difficult circumstances, Europe is highly unlikely to walk away from the social model. Austerity measures were some of the concessions that Greece had to make to be bailed out from her financial crises last year (Broadbent, Gill, & Laughlin, 2003). However, there were major protests against the proposed measures and for this reason an exit plan from the European Union was charted. The UK has recently threatened to exit the Union, and so has France. Nonetheless, neither exit from the union nor imposing austerity measures will solve the crises that NHS is facing.
The first thing to ensure that the NHS is financially sustainable is to deal with the attitude issues surrounding the system's commissioning. UK citizens have for long perceived and understood the NHS system to be free of charges from many perspectives. What they seem not to realize is the fact that the system is inefficiently funded from tax revenue, which is also low, and borrowed funds that come with interest costs. The citizens live reckless lives without taking much consideration of how various behaviors would immpact their health and the trickling effect on the entire NHS system. The government, therefore, needs to run sensitization campaigns with the agenda of changing the attitude of its citizens towards the NHS. The citizens need to shift from the free goods perception and understand that the services that they get are paid for. The change in attitude is likely to impact how people lead their lives, enhance prevention mechanisms over treatment and cure processes, and reduce the rate at which patients require the services of healthcare personnel. These principles are in line with the development of people and profit focused sustainability model (Broadbent et al., 2003).
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The second major thrift required to make the NHS sustainable is to focus on the bottom lines of all stakeholders in the system (Steinbrook, 2008). The NHS in its entirety is not in confusion. Rather, the chaos exists in some subsystems which include various trusts and foundations. The reality is that the hospitals mostly do not delve into losses, although the trusts and foundations do. The systemic controls then force cash injections into the failing subsystems and, in the end, the entire system gets into disarray finding it difficult to break even. One way of enhancing sustainability in such conditions is to ensure that efficiency regarding resource mobilization and utilization is enhanced at subsystems level. It will force the subsystems to focus on their bottom lines with a high likelihood of restructuring in the NHS trusts and NHS foundations to ensure that every subsystem is responsible for its financial health. This recommendation has the potential of leading to the failure of some trusts and foundations, but the least that the government can do in preventing the collapsing of the entire system is to allow the non-core subsystems to fail by refusing to inject funds for financial rescue. It will instill financial discipline in the NHS and chart the way towards the judicious use of resources.
Financially sustainable NHS also requires proper cost management systems (Frazer, Marlier, & Nicaise, 2010). The current guidelines on the sustainability of the NHS have referred to cost management under the procurement principles, and this considerably shields the real focus that is cost management. Cost management does not only entail the management of the procurement process. It also involves that the decisions are taken by the decision makers in the healthcare facilities who opt to admit patients that are not supposed to be admitted. It involves the conduct of nurses, doctors, and other medical health staff members who do not offer services optimally hence leading to being uncalled for delays in services delivery. It also involves the high rates of absenteeism for permanent employees in the sector who skip duties due to demotivation and other extraneous factors. What the government of the UK requires to ensure the NHS system is sustainable is to conduct a comprehensive cost management audit of the entire systems and recommend cost management structures that will reduce the running costs of the program and also decrease the funding requirements in the process (Gaffney, Pollock, Price, & Shaoul, 1999).
The last factor relates to the need for stronger public-private partnerships in the management and funding of the NHS. In funding, the public-private partnerships should focus on internally generated funding mechanisms. External financing in a regime of rising interests in the global capital markets is likely to lead to unsustainable financing costs. The UK must endeavor to create a self-sustaining NHS system that gets all financing from within. Concessions with the public to install a small fee for service may be good but difficult starting point. It will ensure that the public directly contributes to the financial sustainability of the health system. Other means of sustainably financing the healthcare system is to allow private investors to invest directly in the healthcare sector such as through the establishment of hospitals. This will bring about a paradigm shift from a case where the interest for funding will be converted to profits for funding hence reducing the financing costs, the liberal revolution of the healthcare system, and improvement of the quality of service to the people. A self-sustaining system for the NHS is, therefore, the ultimate solution to the crisis in the NHS (Dixon, Figueras, & Kutzin, 2002).
In conclusion, this paper focused on the sustainability of the health system in the United Kingdom. The UK has for more than two decades been operating the most successful global health system but since the 2008/2009 global financial crisis, the NHS system has been facing financial difficulties that threaten its sustainability. The social model can be improved to make the NHS sustainable. Austerity measures may not lead to any improvements in the system considering that the democracy is anchored on social models. However, the NHS requires critical restructuring to make it sustainable. The decisions adopted by the policy makers must, therefore, focus no only on the people and place perspectives but also on the profit or financing perspective.