There may be trouble ahead

Anniversaries have resonance. Today's is the fifth for the Government's NHS reforms. But it is also the tenth for the financial decisions which led in 1987 to the NHS spending crisis, which in turn produced a major NHS review. In recent months, there have been some uncomfortable parallels with that period a decade ago when thousands of beds were shut, staff shortages left intensive care beds empty and a sense of crisis descended on the service and on the public's attitude towards it. Once again for the NHS, 1996 looks likely to be another year of living dangerously.

On one level, today's news is good news. With the abolition of regions and the merger of health authorities a line of sorts is being drawn under the continual, almost Maoist, revolution in organisation and structures that the service has undergone since 1991.

It is a time that has seen some genuine gains - from transformed relationships between GPs and hospitals to tumbling waiting times for non-emergency treatment. The average time on an NHS waiting list has getting on for almost halved since 1991. The very longest waits have all but disappeared.

Yet how much of this is due to the reforms? How much to the extra cash Government threw at its new system to ensure it worked? And how much to changes that were happening anyway - more day surgery, continued medical advance? Untangling all that is an impossible task. And the sense remains that another crisis may be looming.

The reasons for trepidation are threefold. First, an NHS review, set up in 1988 because of a spending crisis, ironically did nothing in the end to address the level of spending or how the NHS should be financed. It reorganised the system but not the cash. Second, a stack of problems is building, some to do with the reforms, but many not. And third, the NHS is operating in a changed climate. All three interact.

Start with the money. Several years of generous settlements have been followed by a steady tightening of the screw. This winter, the NHS came closest to breakdown since 1987 as emergencies rose, the mildest of flu epidemics struck and the NHS found that the new system lacks some of the flexibility of the old. Waiting-time guarantees were honoured - but only at the expense of not flooding the new, dedicated day-surgery units with medical emergencies. The result has been some awesome waits in accident and emergency departments, patients on trolleys and a sense that the NHS is failing at the one thing it always did best: emergency care.

Compounding this is a medical staffing crisis which may be the single most serious issue facing the service. There are a number of reasons for this. A miscalculation over medical school numbers back in the 1980s; more women doctors opting to work part-time; cuts in junior doctors' hours; and a dramatic re-working of consultant training - all have combined to produce both painful new pressures to reorganise hospital services and shortages of medical staff. In a further echo of the 1987 crisis, there are also shortages of intensive care nurses. These will require more organisational change within hospitals, but need money and financial flexibility to ease them through.

Yet in key areas the service has actually lost, rather than gained, financial flexibility. The growth of fundholding has reduced health authorities' ability to switch spending between waiting lists and emergency care - a situation that will intensify as the range of procedures which GP fundholders can buy increases significantly from today. It has become harder to swap capital spending for revenue and vice versa. This makes tackling the difficulties outlined above, and exercising one of the NHS's greatest arts - simply muddling through - more difficult. And the much-vaunted private finance initiative has yet to help. It has delayed not only big building but smaller rationalisations, while producing a large cut in capital spending that it has yet to replace.

Finally, there is no back pocket. As has become clear as Stephen Dorrell has announced initiatives to tackle a series of crises - mental health, intensive care beds, accident and emergency staffing - there has been no hidden cash, held back, to lubricate these changes. And there still won't be any this financial year. For despite an election drawing near, and in an echo of 1987, the Government has produced for the NHS the toughest year financially since the reforms came in - after a year in which it has run tight as a drawstring.

Meanwhile, the service is operating in a changed climate. The purchaser/ provider split has made more explicit the decisions about rationing and priorities that were always made, but usually made quietly, behind closed doors. The sense that the NHS is less comprehensive than it was is growing. And the private sector - in the shape of the pharmaceutical companies and the private insurers - is circling.

Both have a vested interest in more private spending. The health insurers, faced with minimal growth since the 1990 recession, have become more aggressive, and in some cases less honest, in their marketing. In part that reflects increased competition as non-traditional health insurers such as Norwich Union have moved in. But it also reflects a change of personnel at the top.

The gentlemen who ran the traditional insurers such as Bupa and PPP, and who were broadly happy to live in a quiet symbiosis with the NHS, have been replaced by a younger and more aggressive breed, prepared to argue more openly the case for more private spending. The result - reflected in projects like the drug-industry sponsored Healthcare 2000 - is a louder argument that only private spending can close the gap between demand and resources: an argument with which other countries (with higher private health care spending than the UK but similar problems over rationing) might not agree.

On top of that, the reforms have helped to silence many of the traditional voices calling for more money for the NHS. Health authorities - stripped of professional and local authority pressure groups - now manage the cash they are given rather than making the case for more. Managers, likewise, now manage rather than agitate. The British Medical Association and the Royal College of Nursing have both been marginalised. And even some of the health service academics, anxious to appear modern in a climate where advocating more public spending is seen as old-fashioned, have joined the argument that the NHS may need to charge more, or provide a "core" service, or shift in some more dramatic way away from its tradition as a tax-funded, free-at-the-point of use service - despite having no prescription to offer as to how to achieve that with equity.

The case for more NHS spending is thus going by default with no chance that the Labour Party, terrified of any charge of tax and spend, will rectify it: certainly not this side of an election, and quite possibly not the other.

An explosive mixture is in the making. A mixture of long-term trends, short-term crises, some effects of the NHS reforms but, most immediately, an excessive tightening of the spending screw may next winter produce an eruption in the NHS to match the dark days of 1987: a bitter irony when in many ways the service is performing as well, if not better, than before.

Such an explosion would raise again the question that the outcome of the NHS review ducked. How much should we spend on the NHS, and should we spend it publicly? The answer this time might be different.