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People living longer in poor health is the biggest threat to the sustainability of the NHS

The Institute and Faculty of Actuaries (IFoA) has responded to the House of Lord’s Select Committee on the sustainability of the NHS.  The IFoA states that in order to achieve long-term sustainability of the NHS and intergenerational fairness, those benefitting from longer lives and access to health and care services should contribute to the increased costs.

The Select Committee review, chaired by Lord Patel, is considering issues facing the NHS and the impact they will have over the next 15 to 20 years.

Social Care is important because it could relieve the burden on the NHS. But social care spaces are still limited, whilst their demand is growing, and State funding for them is falling. Thus, social care should be reviewed alongside the sustainability of the NHS.

The National Audit Office estimates that the cost of treating patients in hospital who no longer need to be there is £820 million per year due to the delayed transfers to social care homes.  The IFoA outlines three areas where the Government should focus to address this:

  • Widespread public engagement is crucial to understand the cost of social care as people have to pay for it
  • People must be incentivised to save for care and not penalised
  • Because people are living longer, but healthy life expectancy is not keeping pace, new technologies should be investigated to encourage healthier living to reduce demand for NHS services and create efficiencies in the health care system.

The IFoA suggests that Government needs to be clear on what social care the State can afford to provide. This will enable people to plan and prepare for those costs not funded by the State. As social care needs are rising, yet State funding is falling, more people are having to pay more money towards their care needs. Without increased awareness of this, people will continue to have to make decisions about their care at the point of need, which could result in additional stress at what will already be a difficult time.

Charles Cowling, from the IFoA, comments:

“The single largest challenge facing the funding of the NHS is increasing longevity, without a match in increasing healthy life expectancy.  According to ONS figures, life expectancy has increased by around 15 years for males and 13 years for females since the NHS was founded 68 years ago and it is expected to go on increasing.  An ageing population has created a double whammy of a declining support ratio between the working population and pensioners and far greater demand for NHS and social care services.

“Technology has a role to play in improving our understanding of which groups of people are experiencing poor health in later life. Being able to better harness improvements in technology would not only help the NHS to better meet people’s needs, but could also save money.

“The Government should also consider whether raising State Pension Age would go some way to help close some of the funding gap and create more intergenerational fairness in the system.”

The IFoA’s full consultation response can be found here


Editorial notes:

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.

Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.

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