TWO YEARS AGO few would have predicted that the centre of gravity of the health debate would move so quickly towards reform and value for money and away from higher spending. Yet on Sunday Sir Derek Wanless, the author of the landmark report on NHS financing used to justify higher spending, cautioned that all the extra money (in fact “slightly more” than all the money) has already been spent. Yesterday Aidan Halligan, the former Deputy Chief Medical Officer, commented: “We have learnt that throwing money at the problem only allows us to do more of what we have always done.” The service has lurched from a deficit of £200 million before Christmas to £800 million now, losing a chief executive and a head of human resources along the way.

The scale of the extra resources is not in doubt. After inflation, annual spending has increased by four-fifths since 1999-2000, taking spending beyond the European average. The increased spending per year amounts to an extra £120 billion in total. But it is equally clear that the extra resources have not created a service of the standard of continental countries. Certainly some areas of the service have improved. The longest waiting times have been reduced, but improvements have tended to fall in areas of narrowly focused political pressure or where reforms, such as patient choice, have been implemented. Other areas of the service have been neglected.

The public is clear that spending has risen sharply but expectations have risen just as quickly. But the majority of extra resources has been absorbed in higher costs rather than being used to expand access or develop new services. As a result there is a widening gap between supply and demand. The reduction in the rate of spending increases after 2008, already announced by the Government, will only make the situation worse.

This raises the prospect of much greater rationing and longer waiting times that will come as a very unpleasant surprise to patients. It will also increase suffering, as a high proportion of patients’ conditions deteriorate further while on waiting lists.

All the political parties need to undertake an urgent review of NHS aspirations in the future. We need a debate to identify which services should remain in a taxpayer-funded core and which areas are appropriate for a new partnership between the individual and the State.

The latter areas will include the services where the NHS has failed to deliver on its guarantee of care. Despite the highest possible funding increases, the service as currently constructed does not deliver on its guarantee of universal care. For example, the British Society of Hearing Aid Audiologists showed last year that waiting lists for NHS hearing aids can reach up to three years. The National Audit Office has reported that only half of stroke patients receive proper rehabilitation in the crucial months after suffering a stroke.

Worse, the fiction that the NHS covers these areas of illness prevents new forms of funding and new providers from emerging. Where the NHS has recognised the limits of its coverage, such as in ophthalmology, a successful market has been allowed to develop. Standards of eye care have risen and — with several opticians on every high street — choice and access for patients have been transformed.

As well as supply and demand, the other fundamental divide is between consumer demand and society’s need. As medicine advances and the population ages, consumers will inevitably want to spend more than society wishes to fund. In coming years numbers of young taxpayers will fall relative to the older generations. Will the young taxpayers of 2016 or 2026 wish to fund the health wishes of a much greater number of non-taxpayers? The days of an exclusively tax-funded health service are numbered.

The great prize of a reformed and balanced funding system is that the gaps in today’s service could be filled and a modern, truly comprehensive service could emerge. People could be freed to put additional resources of their own into healthcare, as they increasingly will wish to do.

This new system will look and feel different. Alongside a new funding model will come new forms of provision based on out-of-hospital care much closer to people’s homes. Pluralism — with private and voluntary sector providers delivering care on equal terms with the NHS — will be taken for granted. The gains to innovation will be immense. Co-payments and health insurance will be the new vocabulary of healthcare financing.

The review of NHS aspirations should be undertaken without political prejudices in any direction. We must certainly guarantee equitable access for healthcare for all in society. Healthcare free at the point of use is a cornerstone of the British system. But, as the Prime Minister himself said in 2003, the 1945 model of healthcare has never delivered equal access for people on low incomes. Equity is the first thing to go when healthcare is rationed by waiting lists because the better-off can push their way to the queue or jump it altogether by going private. If rationing does start to bite and waiting lists lengthen after 2008, equity and fairness will suffer.

Despite admitting the need for reform, politicians remain unwilling to face up to the debate on financing. The medical profession and their patients are all too aware of the need. Two thirds of the electorate agree that the NHS is unlikely to meet patient expectations, no matter how much is spent on it. The parties will find considerable support for some boldness.

Karol Sikora is a leading cancer specialist and a member of the Steering Committee of Doctors for Reform (www.doctorsforreform.com )

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