30 billion won't rewire the health system
Research Manager and Head of Health
As we near the end of two highly consequential policy processes – the Spending Review and 10 Year Plan – for England’s most treasured public service, it serves to illuminate the age-old question of how much we are spending versus what we are spending it on.
Over the weekend it was announced that the NHS would receive a £30 billion day-to-day spending boost up until 2028 – reaffirming the most well-established trend in public finances: health spending will continue to outpace, and increasingly crowd out, other departmental budgets.
Before analysts across education, justice, or welfare repeatedly bang their heads against the wall, there is an elaborate context underpinning this: people are getting older and with more resource intensive medical problems. Inflation and national insurance increases are significant financial pressures on the NHS’s disproportionately large workforce. Waiting lists are the largest they have ever been in the history of the NHS. Overall, demand on the system is increasing both in volume and complexity.
What remains oddly undisputed is how the NHS responds to this reality. Should it continue to meet demand in the same way it always has? Is increasing day to day spending the only lever available? Or should the focus shift to reducing and redirecting demand – and to treating the demand it ought to receive differently?
Because it is also true that even with spending increases that make other departments wince, the NHS inexplicably remains stuck in a state of perpetual parsimony. Funnelling money into a broken system – which this is – does not help to serve the needs of modern populations more effectively. Rather than improving outcomes, increasing spending without extensive reform entrenches mediocrity for patients, staff, and the taxpayer. Something fundamental needs to change.
Enter one of Re:State’s newest ideas in this regard: the Remote General Hospital (RGH). This would include remote A&E, elective referral management, selected remote outpatient pathways and specialist long term condition management for high-intensity patients. An RGH cannot replicate the entirety of a physical hospital – it would complement rather than replace it, diverting demand away from the hospital that does not need to be there.
Various fragments of a virtual secondary care already exist, but the aggregation of them within one unit across a large population scale has never been done and would be a world first (as the NHS itself once was).
Imagine today if you develop a sudden, itchy full body rash. You travel to the closest hospital and sit uncomfortably in A&E for four hours to be given some medication and go home. In an RGH, you join the virtual waiting room in the comfort of your own home and get seen within an hour, the prescription is sent to your local pharmacy, and you are told to update the clinician through images or videos over the following hours.
And instead of your GP referral to a hospital specialist taking seven months just for the initial appointment, it takes two, because you see a hospital specialist remotely who can triage your referral, assess you and direct you to a diagnostic test, or the right doctor (whether in a remote or physical hospital), or discharge you.
Contrast the RGH to the development of a physical hospital: the construction of a hospital alone takes 3.5 to 7 years, but from inception to delivery it can take as long as 11 years. While in its first month, Moorfields virtual A&E managed to create 32 different waiting areas, onboarded 31 clinicians with 35 participating in video consultations in the first five days, with A&E seeing 40 to 50 patients a day. For an RGH, the major operational enabler – rather than having to spend money and time building an entirely new building – is getting the software running.
Then contrast this to the scale and cost of a bricks and mortar hospital. The total costs of the NHS estate in 2023-24 were £13.5 billion (equivalent to the entire budget for the Ministry of Justice). An RGH increases capacity in the system without increasing this number because there would technically be no estate, other than the software.
Since an RGH would provide fewer services than a traditional hospital, could move through appointments faster (as evidence of remote appointments demonstrates) and have lower fixed costs than a hospital, it could serve a much larger group of people at less cost. Indeed these would ideally sit at a larger population scale than a typical hospital, likely at a regional or ICS level.
The RGH is testament to the fact that if the NHS was designed from scratch today, it would look nothing like it does now. An NHS designed in 1945 does not work for 2025. The Secretary of State has said the NHS “must reform or die”. I vote for the reform option.