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16 October 2014
me and my health

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by Marcus Longley, Professor of Applied Health Policy Associate Director, Welsh Institute for Health and Social Care

The NHS is easily Wales' biggest organisation, with 80,000 staff, and a total budget of £4,400 million a year (up by £1¼ billion since 2002).

So who decides how much money it gets, and how it's spent?

New drugs, new ways of providing care, new standards, all demand change from the NHS in Wales

At the national level, the Welsh Assembly decides the size of the NHS budget, from within the total allocation it receives from the Chancellor. About 80 per cent of this is allocated to the 22 Local Health Boards according to a formula, which gives most money to those parts of Wales with the poorest health. This supports most hospital services. About 12 per cent goes on GPs, dentists and others in the community. 5 per cent is kept back to fund education and training for existing and future staff. The rest goes on various national public health initiatives and to fund research.

At the local level, therefore, the 22 Local Health Boards are key. They use their money to decide what the NHS Trusts should provide, make the big decisions about the future of local hospitals, and hold the Trusts to account. (The 14 NHS Trusts are responsible for the day-to-day running of hospital services, for ambulances, and for staff such as district nurses and midwives.)

In practice, the Boards' freedom to manoeuvre is circumscribed by, for example:

  • national policy - the Assembly's waiting times targets have to be met;
  • national contracts - the national GP contract states what GPs can be expected to do
  • the weight of history - the vast majority of budgets are simply rolled over from year to year.

So how does change happen in the NHS?

In part, it's as a result of the Assembly making key strategic decisions, and making sure that the LHBs and Trusts implement them. For example, in 2005 it produced a new strategy - Designed for Life - which sets out various waiting times and other targets, and outlines the wholesale re-design of hospital services which is currently causing so much controversy in north and west Wales.

In part it's the result of technological change and professional innovation. New drugs, new ways of providing care, new standards, all demand change from the NHS in Wales as they do from health services anywhere in the world.

And in part it's about public opinion. This can be direct - plans for west Wales, for example, are now on ice because of public opposition. It can also be indirect - politicians know that every four years they'll find out what people think of their stewardship of the NHS.

So is NHS decision-making fit for purpose?

There are several answers to this question. It's relatively efficient - only about 4 per cent of the total budget goes on management costs. It's relatively safe - there are lots of checks and balances to make sure that everyone gets an acceptable standard of care. And the NHS is still a very popular national institution.

Paradoxically, the recent financial pressures affecting the service may actually be a sign of relatively good management. Despite the pressures locally caused by rapid growth and nationally-negotiated contracts, in Wales they are remarkably small as a percentage of total spend.

But the NHS does struggle to keep up the pace of change. All that extra investment that has gone in must be matched with newer, better ways of doing things - and the jury's out on whether that's being achieved. People must also have confidence that their NHS is being run as it should be - for most of us, the NHS is in effect a monopoly provider, and we will all rely on it at some stage in our lives.

Comments

Jane Carr flint
thank you glan clwyd hospital for the excelent treatment of my husband in your cancer treatment center

leighton davies neath
I would like to convey my admiration and grateful thanks to ALL the staff at Morriston Hospital Cardiac wards. They had bad press last year, I recall, but, i've recently undergone a triple bypass there,and can only describe the Staff, surgeons, and medics as being absolutely brilliant. Based on my experience the N.H.S. is second to none. Diolch yn fawr pob un.

J Rowe from Pontypool
I was very disappointed to hear that some patients have been refused "ambulance" cars to transport them to outpatient's depts. I have read nothing about this service being reduced and it has caused much inconvenience and concern to many people.

(anon)
Are we progressing? In response to "how does change happen" and "NHS decision making fit for purpose" there is one area that does worry me. I believe a principle concept that is failing to allow (or at least holding back) progression of the modernisation of Welsh Health Services is the new sytematic process that afords capital investment but does not recognise revenue consequence. The net effect is that business case upon business case is developed for capital investment but with each comes increased capital charges (an "unrecognised" revenue consequence) a common factor that means these cases never receive local LHB approval (as LHBs struggle or are unable to support increased revenue investment). Consequently without LHB approval these very needed cases cannot be put forward to WAG for progression and a stalemate is acheived. In simple terms without capital development for new buildings, services cannot modernise and fully develop new efficient ways of working and it takes both capital & revenue to achieve these aims. Is the recently publicised delay in the expansion of the new chilrden's hospital for Wales a case in point?

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