Why is the NHS struggling? - Economics Observatory

NHS performance in many areas – including for ambulances, emergency care and pre-planned treatment – is worse than before the pandemic. There are many plausible explanations for this poor record, which makes it hard to identify short-term solutions.

The NHS is under immense pressure and performing poorly relative to its own targets and pre-pandemic standards. Several factors are likely to be driving this poor performance, including the continued presence of Covid-19 patients in hospitals, problems discharging patients, and changes in the average sickness of patients. But the relative importance of these different factors remains unknown, in part because of the complexity of a system as large as the NHS. This makes it hard to identify short-term solutions, although what needs to be done over the longer term is perhaps clearer.

Health is devolved in the UK, and each nation has its own healthcare system. This article uses data from the NHS in England, but similar issues are affecting the healthcare systems of Northern Ireland, Scotland and Wales.

How is the NHS performing?

The NHS is struggling and currently performing poorly relative to both its own targets and its pre-pandemic standard of performance. According to the latest available data, in England:

The waiting list for pre-planned care was 7.2 million in November 2022, up from 4.4 million on the eve of the pandemic in February 2020. Of those waiting for treatment, 40% (2.9 million people) have been waiting longer than 18 weeks, the target in the NHS constitution (NHS England, 2023; Department of Health and Social Care, DHSC, 2022)
The average time for an ambulance to arrive for emergencies that may require rapid assessment and intervention, such as strokes or chest pain, was one hour and 33 minutes in December 2022 compared with 28 minutes in December 2019 (NHS England, 2023)
Of people arriving at A&E (accident and emergency), 35% (700,000) waited for more than four hours in December 2022, compared with 20% in December 2019 (NHS England, 2023)

In addition to a general lengthening of waiting times, the NHS is also managing to treat fewer patients than it was before the pandemic across many different types of care. In the first ten months of 2022, the NHS delivered 10.5% fewer emergency admissions, 8.5% fewer elective (pre-planned, non-urgent care) and maternity admissions, and 4.3% fewer outpatient appointments than it did over the same period in 2019 (Warner and Zaranko, 2022).

There are some areas where the NHS is doing more than it was before the pandemic. The number of GP appointments delivered in November 2022 was 11% higher than in November 2019, and the number of urgent cancer appointments was 31% higher over the same period (NHS Digital, 2023; NHS England, 2023). But the overall picture is clear: in most parts of the NHS, fewer patients are being treated and waiting times for that treatment are longer.

What is driving this fall in performance?

The NHS uses a range of resources to provide healthcare services, including medical and support staff, hospital beds, medical equipment and drugs. One potential reason for the poor performance is that the NHS just doesn’t have enough resources. Whether the NHS has sufficient resources is ultimately a political decision about the types and quality of services we want the NHS to provide – there is no single definition of ‘enough’. But we can compare the resources available to the NHS with their 2019 levels.

The NHS has substantially more funding and staff than it did in 2019. Total NHS funding in 2022/23 is 11% higher in real terms than in 2019/20. Even after adjusting for higher staff sickness absences, there are 9% more senior doctors and 8% more nurses and health visitors than in 2019 (Warner and Zaranko, 2022). In the third quarter of 2022, the NHS had 129,000 available hospital beds, 1% more than in the third quarter of 2019 (NHS England, 2022).

Taken together, this suggests that the NHS broadly has more resources than it had before the pandemic. It is therefore not clear that the recent poor performance of the NHS is explained by a reduction in available resources alone.

But there are a number of reasons why the NHS is struggling despite having more resources. One is that the NHS continues to treat many Covid-19 patients in hospital. In 2022, there was an average of 9,200 patients with Covid-19 in hospitals in England each day (UK Health Security Agency, 2023). Once you adjust the number of hospital beds for these patients, the NHS has 1-5% fewer beds than it had pre-pandemic (Warner and Zaranko, 2022), the precise figure depending on whether you adjust for all patients with Covid-19 or just those admitted primarily because of Covid-19.

This means that there are fewer beds and resources available for treating non-Covid-19 patients than before the pandemic. The presence of Covid-19 in hospitals also requires infection control measures (such as the physical separation of patients who have tested positive), which can reduce productivity. For example, infection control measures could mean that wards and hospital beds are not fully occupied, and that staff have to spend time changing PPE (personal protective equipment).

The NHS is also struggling to discharge patients from hospital. This means that hospital beds are occupied by patients who no longer need treatment and cannot be used for new patients. In December 2022, there was an average of 11,100 patients in hospitals in England each day who were medically ready to be discharged but could not be. Of these, 3,600 patients had been in hospital for at least three weeks.

There is a range of reasons why hospitals cannot discharge patients (Flinders and Scobie, 2022). A major one is the lack of capacity in the adult social care sector. This means that there are not enough spaces in care homes for patients to be discharged into, or there are insufficient numbers of social care staff able to care for discharged patients in their own homes. The adult social care workforce shrunk in 2021/22 for the first time in at least nine years, while the number of vacancies rose by 50% in one year (Skills for Care, 2022).

Another potential reason for poor NHS performance is that patients are on average sicker – something that is not captured when we look at the total number of patients treated. If each patient requires more resources to treat because they are in a more serious condition, this could mean that the NHS can treat fewer patients with the same level of resources.

There is some evidence of worsening population health from disability benefit claimants and health-related economic activity (Joyce et al, 2022; Boileau and Cribb, 2022; Institute for Employment Studies, 2022). But without detailed hospital data, there is currently little evidence on the extent to which the composition of patients being admitted to hospital has changed.

These are not the only potential explanations for poor NHS performance. Others include:

Management problems: While the number of senior doctors and nurses has grown respectively by 9.2% and 8.2% since 2019 after adjusting for higher sickness absences, the number of mid-level managers has declined by 0.3% (Warner and Zaranko, 2022).
Staff morale, productivity and unpaid overtime: It may be that the pressures of the pandemic have reduced staff morale, and staff are working less paid or unpaid overtime.
Change in staff mix: The NHS has more staff, but it may be that it has lost particularly experienced or high-skilled staff, reducing overall performance.

In short, there are many plausible explanations for the current poor performance of the NHS. All these factors are likely to be causing problems, but with the publicly available data, it is not yet possible to assess their relative importance. And although these potential explanations are presented separately, they interact with and potentially exacerbate each other. This makes it very hard to identify simple and effective solutions to the current problems facing the NHS.

What next for the NHS?

Some of these pressures are likely to improve as we move from winter to spring – the NHS has always faced additional pressures over the winter from cold weather and flu. But it is hard to know how to resolve the current pressures and how quickly they will improve without an adequate understanding of what is driving them. The government has announced several pots of funding to speed up hospital discharges, but it remains to be seen whether this will help to reduce pressures on the wider service (DHSC, 2023; Humphries, 2023).

In the longer term, we should consider whether investments in social care, community care (medical services outside hospitals) and primary care (GPs) might do a better job of relieving pressure on hospitals. The NHS is a complex system, and poor performance in one area will end up affecting other parts.

It seems clear that in the recent years of relatively slow growth in NHS funding, hospitals have been prioritised compared with other parts of the system. For example, while the number of hospital doctors has risen dramatically over the last decade, the number of GPs has, if anything, slightly declined (Warner and Zaranko, 2021). The risk is that squeezing non-hospital services simply adds to the pressures on hospitals further down the line.

It may also be that the NHS needs increased longer-term investment (capital spending). A shortage of hospital beds is one likely cause of the current problems, and there are also concerns around the quality and condition of the NHS estate.

The size of the NHS maintenance backlog (defined as the estimated cost to catch up on missed maintenance tasks) has grown dramatically over the last ten years (NHS Digital, 2022). This reflects relatively low levels of investment in hospital infrastructure, itself partly driven by a habit of using capital budgets to meet day-to-day spending pressures in the health service in the 2010s (Stoye and Zaranko, 2019).

But increased investment is easier said than done. An ageing population means that the NHS will need more resources just to stand still and provide the same level of services (Office for Budget Responsibility, OBR, 2022; Rocks et al, 2021). Before the pandemic, health spending was already the largest area of public service spending (at £164 billion in 2019-20), and the second largest area of government spending after social security spending (Institute for Fiscal Studies, IFS, TaxLab, 2021).

A weak economic outlook amid rising interest rates poses a broader fiscal challenge for the Treasury. Any increases in health spending will ultimately require cuts to other areas, higher taxes or increased government borrowing. But there is a risk that delayed and missed NHS treatment will worsen population health, which in turn will put increased pressure on the NHS. Just as for the patients whom the NHS treats, delaying treatment for the NHS itself may only make the problems worse – and costlier to treat – in the future.

Where can I find out more?

NHS funding, resources and treatment volumes: IFS report on how NHS funding, resources and treatment volumes compare with pre-pandemic levels by Max Warner and Ben Zaranko.
QualityWatch: NHS performance summary: Nuffield Trust and Health Foundation programme analysing NHS performance data.
Why have ambulance waiting times been getting worse? Health Foundation report on ambulance waiting times by Anne Alarilla, Mai Stafford, Ellen Coughlan, Josh Keith and Charles Tallack.
Hospitals at capacity: understanding delays in patient discharge: Nuffield Trust report on hospital discharge issues by Sophie Flinders and Sarah Scobie.
NHS staffing shortages: why do politicians struggle to give the NHS the staff it needs? Report by Bill Morgan for the King’s Fund.