Busuness StudiesBusuness StudiesCONTENTSTerms of ReferencePage: 3Executive SummaryPage: 3Main Body:-Background Information:Page: 3-Problems with the NHS:Page: 4-Theories:Page: 4Solutions/Conclusions:Page: 7TERMS OF REFERENCEWe are a group of economic consultants approached by The Principal Research Offices in Downing Street Strategy. We are analyzing the problems of the National Health Service (NHS), relating it back to different theories and finding possible solutions for NHS to meet their expectations.
EXECUTIVE SUMMARYThe problems which have arisen since the NHS started are that, not enough money is being invested in the NHS by the Government, therefore causing a lack of resources, which leads to longer waiting hours and poor pay on behalf of the staff.
The theories that coincide with the position of the NHS at this moment in time are scarcity, rationing, opportunity costs and the Economic Systems. As we already know the NHS has trouble with its finances concerning their expenditure. Therefore their scarcity levels have caused them to limit the amount of resources that they have. As a result they have to ration their resources effectively and wisely in order to meet with their patients’ high level of demand.
With regards to the Economic Systems, the NHS is a mixture of both Free Market Economy and Command Economy, therefore making it a mixed economy. This system allows more Government control over the NHS on things such as pricing and decision making.
Based on these theories, we have come up with a few solutions, which we think may help the NHS overcome the problems that they are faced with. Firstly, the Government could privatise the NHS, therefore leaving them to spend their money else where on things such as Education and Welfare Benefits. Moreover, non – Governmental regulators could be introduced to enable the market to stay competitive and to ensure that consumers are not being exploited by these private firms. The final solution would be to raise taxes. This would allow for Government expenditure to increase with regards to the NHS. However the downside to this is that people already feel that the tax is high enough and will therefore not be willing to pay more money unless they know for sure that their money will get spent wisely by the Government.
The NHS is in desperate need of some additional financial help, and the Government could be doing the same by having it give more NHS funding. There are two solutions. Firstly, a private body would be commissioned to look into the issue of privatisation. And thirdly, a fully government funded private market could then be established to encourage investment in and support of the NHS. The NHS needs to spend more money elsewhere, particularly when the public sector is struggling to get by. This is not a big deal if there is a big NHS deficit, because the deficit and public debt do not affect people’s health. However even if the Government did to spend more to improve the situation, the public sector would still have to be provided with high-quality care. This would mean more money for hospitals to provide. A fully national system would also be needed to provide for those people that need help with life-threatening disabilities, and for those with mental health concerns, where they can be most difficult to deal with.
Finally, the Government would then be able to do something about the huge number of people in urgent medical and mental health situations who have no hope of survival and can be brought to the NHS. This would help the National Care Union (NIU) be better involved in resolving the care and treatment problems faced by people with acute or chronic conditions. It would also help provide more affordable care. That is why the NHS is under heavy stress, and because many of our NHS projects remain outside of government funding, many of its nurses, primary care doctors and nurses trained in primary care will need such financial assistance and care elsewhere.
Finally, there is a huge issue of poverty and unemployment. It is no longer about how many people are in work. It is now about how many people are unemployed, who are not being paid as promised, or who are being denied basic health needs, or who are getting stuck in low-paid, low maintenance jobs because the Government’s system is not working for them. More and more people are working for more money and for less. Many of these young people are working for lower pay and pay or are getting in worse shape and it will only get worse. As part of that the Government could also put a cap on all pensions and so on – for the time being. While this could make our NHS more accessible to many unemployed people, it would also make it less appealing for them to work. At least there are people who need help. The Government could also use the existing funding provided to it – which is already available to private insurers and paid for by the NHS – to assist in the long-term economic development of the NHS, particularly for the poor.
But perhaps the biggest need for a long period of time is a new system to enable the NHS’s financial managers and the government to deal with the problem. Even if a Government chose to use the NHS’s public finances, it would still have to find a way of getting more people into work. The private sector is already getting some help from other parts of the economy, particularly for the sick and elderly, or with young people. It can provide more money to private employers and help the Government to raise funding, especially in areas where there are fewer workers in government, but would still require massive changes to
BACKGROUND INFORMATIONThe National Health Service was set up in 1948 and has grown to be the leading organisation in Europe. The World Health Organisation claim that the NHS is one of the best health services in the world. However in order for the NHS to cope with patient’s demands and the changes occurring, they would need to improve their service to keep their patient’s satisfied.
PROBLEMS WITH THE NHSIn recent years the National Health Service has been in crises, it is argued that they have suffered due to lack of investment by previous administrations. However the cure seems simple, which is to increase spending on the service causing them to run more efficiently. Therefore they have increased spending and rationalised the NHS to make it more efficient. Despite this the NHS are not able to balance their budget in order to meet customer’s demand, therefore causing many hospital wards to close down. Also as technology and treatments are becoming more expensive, the NHS is not able to fund for vital resources, therefore causing many cancellations and longer waiting time. As well as this recruitment is becoming a long process, causing shortage of staff, who are not being paid well.
THEORIESSCARCITYScarcity is defined as “The excess of human wants over what can actually be produced to fulfil these wants”. In today’s society both the rich and the poor have high demands and they want more than they can have.
Consumption and production is a way of people being satisfied. Consumption is based on how much is spent and how much is bought. Production is how much is produced,