What should an underfunded NHS spend its money on?

It is summer 1997. Frank Dobson, the new Secretary of State for Health, is making his first major decision about the NHS. He meets with Alan Langlands, then NHS chief executive, who spells out how bad the service’s finances are. Langlands tells Dobson bluntly that, on the money available, the NHS cannot both get through the coming winter and meet the Labour manifesto pledge of reducing waiting lists. Dobson agrees, and opts to prioritise the winter, stretching his party’s pledge on waiting lists to cover a longer period.

This scene is described a rollicking new history of the welfare state, The Five Giants by Nicholas Timmins. Among those who remember it must be Simon Stevens, at the time Frank Dobson’s special advisor and now chief executive of NHS England. Today, Stevens finds himself in a familiar place, with money still tight for the health service. And two troubling factors—acute workforce shortages in a period of record employment levels, and a crisis in social care—have made the situation worse.

NHS England received less than it asked for in Philip Hammond’s recent budget. At the end of November, its board met to decide what trade-offs to make. The board intend to protect spending on primary care, mental health and cancer care—with the implication that waiting for elective and some emergency care will suffer. In the face of mounting winter pressures, increased waiting times for non-urgent surgery will be the most likely outcome. This set of priorities is clear to understand and implement and, after all, something has to give. But in the meantime Secretary of State Jeremy Hunt has confirmed the government’s “absolute determination” to meet current targets on waiting times.

Leaving aside any potential differences between NHS England and the Secretary of State, what are the right priorities?

It depends on what the main objective is. If the aim is political, the NHS will surely need to appear to cope over the winter. With social media, failings in emergency care are more visible than those in other areas such as mental healthcare, primary care, and non-urgent surgery. Jeremy Hunt would rather avoid appearing on television against a backdrop of carnage in A&E; justifying the need to lengthen waiting times (which are at historical lows) is obviously preferable. And while the board of NHS England do not have to face voters, they will face public anger and pressure from politicians if their priorities appear badly chosen.

But if the aim is more utilitarian—to maximise the benefits for the greatest number of people given the budget—then spending priorities will be different. There is a voluminous literature on healthcare rationing. One strand goes like this: carry out cost utility analyses on every service offered in healthcare; rank them; and fund from the highest rank downwards until the budget runs out. The fate of lower ranking services below the line? Tough.

Back in 1991, I was in Oregon observing the most thorough experiment of this type, which assigned the state Medicaid budget using just these methods. But using cost effectiveness as the sole criterion led to glaring anomalies: treatment for crooked teeth received a higher ranking than treatment for Hodgkin’s lymphoma, for instance. There was such a public outcry that the committee in charge had to go line by line down the ranking and reprioritise treatments using “subjective” criteria that went beyond the cost utility formula.

Other countries have tried to identify a “basket” or an explicit benefits package for what will or will not be funded by the state. In practice, these efforts have ended up being national guides for local decision making, rather than a definitive list. This follows the realisation that at a national level it was impossible to see the right trade-offs, which are better made as close to the patient as possible. The NHS has shied away from defining a national benefits package, much as Britain has no written constitution.

There have been efforts in the NHS to identify the costs in the major areas of care to help local commissioners set priorities better and there are guidelines from The National Institute for Health and Care Excellence to steer decisions, but neither is systematically applied across the country. Occasionally, local commissioners, and before them health authorities, have arbitrarily cut or tried to cut whole services (such as surgical removal of wisdom teeth or IVF), sometimes for dubious reasons. When this has resulted in a public outcry, the national parts of the service have stepped in. But more commonly commissioners have had to shave budgets to the bone for what used to be called “Cinderella” services like mental health, which aren’t seen as the priority, or reduce funds for non-emergency procedures—a practice which is either a postcode lottery or appropriate local decision-making, depending on your point of view.

So for good reasons the NHS has muddled through. Over the years, it has tried to gather more evidence on the cost effectiveness of treatments to aid decision-making. But its objective cannot just be utilitarian. Other factors are important, and they, and how they are weighted, are highly contested because some rest on subjective and moral values, not objective and empirical evidence. So, as the health service faces winter on a tight budget, and then at least two years of unusually lean funding growth, how should it proceed?

Make clear decisions, yes. But NHS England could try to publicise clearer principles to guide that decision-making. This could include: the transparency of the basis on, and process by which priorities are decided; what is the scope of decision-making at national versus local commissioner level; and locally between commissioners and clinicians at the frontline. Priority setting will always be a messy process, but it could be a lot less murky. If the fear is public controversy, hidden decisions might fuel not dampen that.

In 1997, Labour had come to power pledging to reduce waiting lists by 100,000: instead, they increased by 150,000. Then, as now, the only solution was a lot of help with elective surgery from non-NHS providers. And, most importantly, a big slug of cash.