Credit Crisis to Take Long-Term Toll on Health System

UK's National Health Service will have no real growth in funding
By Jane Parry
HealthDay Reporter

WEDNESDAY, Oct. 29 (HealthDay News) -- Although in the short term the United Kingdom's National Health Service may avoid any serious impact from the credit crisis, in the medium to long term it will stall funding increases at the same time as worsening social deprivation and unemployment will put more pressure on its services, according to a feature published online on Oct. 28 in the BMJ.

John Appleby, chief economist of the King's Fund, London, writes that the short-term effects will be felt by private sector health care organizations but that most NHS organizations are insulated somewhat from the crisis affecting the banking sector by regulations that prevent them from putting the bulk of their cash in commercial banks.

However, rising inflation and clawbacks of any surpluses by the Treasury are likely to erode NHS budgets, and any increases in government spending to ameliorate the effects of the economic slowdown are unlikely to be funneled into health spending, the authors states. In 2011 and beyond, lower tax revenues will probably lead to zero growth for health spending.

"But not only will there be pressures on NHS funding, the combined effect of the credit crunch and recession on the population's health and wellbeing will increase ill health and demand on healthcare services," the author writes. " For now preparation for a difficult financial and health future looks unavoidable."

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