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Cowper’s Cut 210: The wealthy sick and the unwealthy sick

Cowper’s Cut 210: The wealthy sick and the unwealthy sick

"We started the pandemic with 17 ICU consultants. Over the last 24 months:
2 have retired
1 has resigned
1 is on long-term sabbatical
3 have been off for long periods with stress - all needed psychological  support

That’s a frightening 7/17. More than 40%. Everyone else is struggling, too."

ICU consultant Nitin Arora

Fantasy economics
Last week, I noted the Chancellor's media-announced plan to cut £4.75 billion from the NHS budget for the coming financial year in the name of 'efficiency savings'. Cut readers, of course, know that the NHS has an underlying annual deficit running at about £5 billion, as Sally Gainsbury's work for the Nuffield Trust has consistently shown.

The Government subsequently got round to actually issuing the relevant press release. (Who knows: the Chancellor might even go wild and announce this policy to Parliament!) I commend it to you warmly: it is a classic of the 'heroic optimism untethered to reality' genre.

It states, “as part of the renewed drive, the Chancellor said the NHS efficiency commitment will double to 2.2% a year - freeing up £4.75 billion to fund NHS priority areas over the next three years.

“These savings will be made through a range of programmes including the digitisation of diagnostic and front-line services, which has been shown to reduce cost per admission by up to 13%, improving the efficiency of surgical hubs and developing digital tools to cut time spend by NHS staff on admin tasks.”

Even for a Government of tools, this is impressive for the following reasons.

1. Cutting £4.75 billion from the NHS budget in the financial year that begins in under two weeks is unlikely to be well-planned. Also, the hypothesis that NHS cuts mean more money for the NHS: really?

2. Only a few surgical hubs yet exist. More are planned, but not yet actually there, in the real world. (The idea of centralising electives, as across the Imperial/ChelWest hospitals group in NW London, is gaining traction, but not there yet.)

3. Digitisation costs before it saves, as the Wachter Review inter alia stated.

Spring Statement
The Chancellor announced an increase of £3,000 in the threshold for National Insurance payment, costing £6 billion in foregone revenue; and pre-announced a 1p basic rate income tax cut in 2024. So all the speculation about a 2023 General Election has proven to be nonsense.

Institute for Fiscal Studies chief executive Paul Johnson's comment on the income tax cut was "Oh for goodness sake. What is the possible justification for cutting income tax rate while raising NI rate? Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers".

Johnson added, "no extra money for health, schools or other public services despite huge increase in inflation. Likely implies big real pay cuts for most public sector workers: e.g. govt evidence to teacher review body asked for just 3% pay rise for most teachers as inflation averages over 7%".

Mmmmm. Readers will remember that the Government recommended 2% increases for NHS staff in its submisison to the pay review body (3% for AfC staff).

The IFS quickly spotted that the combination of high inflation and the GDP deflator used means that the NHS will get significantly less in real cash terms from the autumn spending settlement: "The NHS England budget is now expected to grow by 3.6% per year in real terms, vs. 4.1% under October forecasts".


The Institute For Government's chief economist Gemma Tetlow noted that National Insurance "is a narrower, less efficient tax on income than income tax. really disappointing to see continued shift towards higher NICs and lower income tax".

More to the point, the fictional hypothecation of every penny of the Health But Social Care Levy NI increase going to clearing the NHS backlog (and in time, to social care) means there is £6 billion less coming the backlog clearance's way.

The Office for Budget Responsibility's commentary on the Statement observes that "the rise in inflation to a 40-year high this year is ... the biggest fall in living standards in any single financial year since ONS records began in 1956-7". They also observe that “net tax cuts announced in this spring statement offset around a sixth of the net tax rises introduced by this Chancellor since he took over the role in February 2020, and just over a quarter of the personal tax rises he announced last year”.

"The Resolution Foundation's stark analysis, 'Inflation Nation', is here, and the IFS report is here.

Launching the IFS analysis, Paul Johnson said, "Mr Sunak has proved to be something of a fiscal illusionist. He told us that he cut taxes yesterday. In a sense he did. He increased the floor for NICs and promised a cut in income tax in 2024. So Mr Sunak’s statement contained big new tax cuts. But it also allowed taxes to rise. He can now expect to raise more in tax as a share of national income by 2025 than he expected last October.

"In fact, taxes are set to rise to their highest level as a fraction of national income since Clement Attlee was prime minister. Not my comparison, that comes directly from the Office for Budget Responsibility".

How did the Spring Statement land?
In a word, bumpily. The Chancellor carried out an increasingly irritable media round, trying to burnish his 'low tax Conservative' leadership credentials.

Prime Minister Boris Johnson promptly undermined the hell out of this position, telling LBC that the Government “need to do more” and “the cost of living is the single biggest thing we’re having to fix and we will fix it". As The Times' Patrick Maguire noted, "old habits die hard as Boris Johnson briefs against his own government. Impressive that he's managing to do this as the literal prime minister".

One looks to the Prime Minster's Unofficial Spokesman Robert Peston at such moments, but finds mainly a bit of straight reporting, followed by speculation in The Spectator about the Chancellor's relationship with the PM. Ah well.

The difference between the wealthy sick and the unwealthy sick is ever more unavoidable, as data from the Private Health Information Network shared with the Mail confirms. "There were 49,700 self-funded admissions between July and September 2019, rising 35 per cent to 67,100 in the same three months of 2021.

"The number of privately funded hip operations increased from 1,800 to 4,800 over the same period and knee replacements are up from 1,100 to 2,500. Cataract surgery rose from 9,100 to 13,200. All figures exclude procedures covered by private medical insurance."

Pay and conditions
Meanwhile, inexorably rising inflation and the improbability of commensurate public sector pay awards mean that we are probably looking at industrial action becoming A Thing in the next twelve months.

BMA pensions expert Dr Tony Goldstone tweeted,"Lifetime Allowance (LTA) slashed by £85,00 (by not removing the freeze, estimated consumer price inflation 8%). Nothing on pensions/pension tax General Annual Allowance (and tapering) remain deeply unfair & unsuited to defined benefit pensions, & the LTA remains a potent threat to retention".

I am beginning to bore myself by repeating it, but the NHS backlog will not be sorted without action on the pensions perverse incentives.

In tents pressure on A&Es
The Royal College of Emergency Medicine told Health Service Journal that the now-widespread use of temporary tents (which, delightfully, NHS England insists be called 'temporary external structures'), brought in to help handle delayed ambulance handovers, is "borderline immoral" and "a danger to patient safety and dignity".

The comment piece, by RCEM President Dr Katherine Henderson, is here.

Jeremy Hunt joins the BMA
Some things you just don't see coming. The Commons Health Select Committee chair and erstwhile hammer of the doctors' trades union has joined the British Medical Association in calling for action to stem the exit of GPs from the NHS, as The Times reports.

“As someone who tried hard to get more GPs into local surgeries but ultimately didn’t succeed because the numbers retiring early exceeded those joining, I’m passionate about fixing this”, the former Health Secretary said.

At the campaign launch, Mr Hunt also stressed the value of continuity of care, warning against the 'Uberisation' of general practice.

But social care
Health But Social Care Secretary Sajid The Saj' Javid maintained his strong track record of speeches with this effort to the Care England conference. Its content is heroic nonsense, in the face of the challenges facing the sector. It would be comically unequal to the task, if there were anything funny about it.

It even manages to say nothing about the clear problems in the proposed cost cap, highlighted in the IFS/Health Foundation report.

In a neo-Hancockian mode, The Saj told the event "I'm excited about what machine learning and AI can offer in helping us deliver care that is personalised". Well, The Saj has managed to automate satire, and make it self-fulfilling, so maybe he's on to something.

Meanwhile in Covid
Chief Medical Officer Professor Chris Whitty told the LGA annual conference that “Covid cases are now rising quite rapidly – from quite a high base – and this is driven by a number of different factors, of which BA.2, the new Omicron variant is a large part. Rates are high and rising in virtually all parts of England.

“If we look at hospitalisations, there are now quite significant numbers of people in hospital. They are now rising again, and I think will continue to rise for at least the next two weeks – so there is pressure on the NHS.

“It is currently being driven by Omicron rather than new variants, but we need to keep a very close eye on this because at any point new variants could emerge anywhere in the world, including the UK, as happened with the Alpha variant.”

Whitty added that Covid will remain a significant health challenge “for the rest of our lives: let’s have no illusions about that. I’m expecting it to be probably – in the UK – seasonal but interspersed at least for the next two or three years by new variants … I think we should just accept that is what we’re going to deal with and just roll with it rather than expect some end point.”

He also told the event that people should keep testing, depsite the end of supply of free tests on 1 April. NHS staff do not know whether tests will remain free for them at this point, which is clearly insane.

The Covid19 Actuaries Response Group's latest look at the data shows that exponential growth gonna expo. BBC News reports the million-strong rise in cases in a week, shown in the latest ONS survey data. The People's Partridge writes in the Mail that this is all basically fine. "A-ha!"

Getting the Bill
The next session of Parliament has been set for Tuesday 10 May. The date of proprogation of the current session has not yet been set, but any Bills that do not have a 'carry over' motion will fall. This leaves three weeks between Easter recess and prorogation, during which the Government will seek to get the remaining legislation approved by both Houses.

It could be quite a high-stakes game of 'ping-pong'. The IFG explainer on all of this is a good guide.

Cronyvirus and coronamilions update
Michael Gove has been drawn in to the controversy over the awarding of PPE contracts to PPE Medpro, and the involvement of Conservative peer Baroness Mone in the dealmaking. The Guardian revealed that the minister become involved following Baroness Mone's emailing him and her fellow Conservative peer Theodore Agnew about the matter, in correspondence between the three's private email accounts.

The Guardian further reported that PPE Medpro was paid £122 million for gowns they bought for £46 million. This included surgical gowns that, following inspection, were never used.

Good Law Project director and festive fox euthaniser Jolyon Maugham QC has new information about the PPE contract won by Conservative Party supporters Surbjit Shergil and Samir Jassal, on behalf of a company called Pharmaceuticals Direct. Samir Jassal is, longstanding readers will recall, a Conservative councillor and twice-failed Parliamentary candidate.

Newly-leaked documents confirm that the contract paid almost double the going rate for facemasks at the time (£5.10 versus £2.68 per unit). And emails to the DHBSC procurement Accounting Officer claim “this unit price has been keenly negotiated”. However several days before that email was written, civil servants were made aware of multiple offers for the exact same facemask at much lower prices.

This was in July 2020, when the first wave was in retreat.

Maugham also cites one of the emails from Shergil copying Jassal to Johnson’s then-close aide Munira Mirza offering PPE: "Thank you for your call... We are keen to support the Party." And he notes that the supplier of cheaper facemasks CKF Healthcare "is described in a leaked email as a “VIP Case” but is absent from the Government’s bullshit published list of VIPs".

Maugham concludes with pertient questions: "why does a business that understands itself to be participating in a clean procurement process pay vast sums to middlemen with connections to Cabinet Ministers and Number 10? What happened to the huge sums of money Surbjit Shergil or his entities received? And is there any connection between the vast sums he received and the fact that Cabinet Ministers and Number 10 were falling over themselves to help?"

Recommended and required reading
Shaun Lintern's preview of the Ockenden Report's publication this week in The Sunday Times is the must-read.

And it looks as if mental health services in Essex will be next.

Thoughtful short read by Professor Devi Sridhar on why some scientists struggle with admitting things they got wrong about Covid19.

A good read from the LGA on what we have learned from 10 years of public health being moved back into local government.

Education expert Sam Freedman's piece on his lessons from needing major NHS care is a useful insight.

I'm not the biggest fan of The People's Partridge, but his campaign on dyslexia is admirable.