Demand for hospital services outstripping NHS funding

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The number of admissions to hospital are rising steeply and are outstripping increases in the NHS budget, according to new analysis published today by The King’s Fund.

The analysis finds that admissions to hospital have increased by 3.6 per cent a year since 2003/4. In contrast, real terms increases in NHS funding have shrunk to an average of just 1.2 per cent a year since 2010/11, compared to average increases of 4.8 per cent a year between 2003/4 and 2010/11 (1).

Detailed analysis of hospital activity data over the past 13 years shows that:

  • emergency admissions from major A&E departments have increased by an average of 4.3 per cent a year since 2003/4
  • attendances at outpatient clinics have risen by an average of 3.8 per cent a year since 2007/8
  • admissions for planned treatment have increased by an average of 4.3 per cent a year since 2003/4.

The analysis also finds that rising hospital admissions could jeopardise the plans set out in the NHS five year forward view. This assumed that growth in hospital activity would be reduced to 1.3 per cent a year (2). In the first half of 2016/17, admissions to hospital increased by 3 per cent compared to the same period last year. With NHS budgets set to tighten further over the next three years, this suggests that the financial and operational pressures facing the NHS will intensify.

Given the growing gap between activity and funding, the analysis highlights the importance of finding ways to moderate demand for hospital care. It argues that the best hope for this lies in strengthening community services by building on the new ways of delivering care being developed under the Forward View. It also suggests that sustainability and transformation plans could provide the means to deliver the changes needed, as long as they are accompanied by sufficient investment.

Chris Ham, Chief Executive of The King’s Fund, said: ‘The NHS is treating more patients than ever before, which is a tribute to the hard work and commitment of its staff. However, our analysis provides more evidence that the health system is buckling under the strain of trying to meet rising demand and maintain standards of care within constrained resources.

‘With the gap between funding and hospital activity set to grow over the next few years, the NHS needs to do everything it can to moderate demand for hospital care. We know that some of this demand can be avoided if alternative services are available – the challenge is to provide the right care in the right place at the right time and to ensure hospitals are only used when necessary and appropriate.

‘This means increasing investment in community services to provide more care closer to people’s homes and focusing on prevention to reduce the need for treatment in the first place. Successive governments have promised this over the years but fallen well short of their ambitions. This time failure is not an option, which is why it is essential to grasp the opportunity provided by sustainability and transformation plans to implement fundamental changes to the delivery of health services.’

The analysis highlights a number of reasons for the increase in demand for hospital services including population growth, the rising number of older people and an increase in the number of people living with one or more long-term conditions.

Notes to editors

(1) The analysis focuses on hospital activity. The funding increases quoted are for the NHS as a whole. Comparable data for activity in other NHS services are not available.

(2) Cited in the National Audit Office’s report Financial sustainability of the NHS based on estimates provided by NHS England.

The King’s Fund is an independent charity working to improve health and care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible care is available to all.

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