After two squeezed years, the new tariff hospitals receive for treatments has been announced as a 4% loss in real value.
The 212 new clinical commissioning groups launching next April and pointlessly replacing 151 primary care trusts, will get less than NHS inflation.
As you’ve repeatedly told us, the NHS has a different inflation rate from the rest of the economy. 4% (that is, four percentage points) above the inflation rate of the rest of the economy.
That’s why it has to be reformed: you don’t need too many decades of that for the NHS to swallow the entire economy.
The change that we need is that we need the NHS to become more productive. Gain more treatment bang for our unit of tax money put in. This would not just reduce that NHS inflation rate, it is the very definition of reducing that NHS inflation rate.
And we know from William Baumol that such increases in productivity, such innovation (they are indeed the same thing) are promoted in market based systems, not planned ones.
Thus moving the NHS to a market based system. It’s not about forking out profits to corporations. Not about breaking up that lovely solidarity. It’s all about reducing that NHS specific inflation rate.