Buffers

This is news from the BBC: "A clampdown on spending within the NHS has turned a massive deficit into an even bigger surplus in just two years.

As much as £1.8bn, about 2% of the budget, will be left unspent this year, the Department of Health says - prompting charges of "boom and bust"."

Apart from the disgrace that these cuts have been too high and patients suffer rather that funds getting spent as they were intended, this underspend also demonstrates the madness of the NHS market economy.

With purchasers (PCTs) and providers (hospitals etc) paying and receiving funding on the basis of volume of work, there is no certainty around budgets. They therefore have to aim greatly on the side of caution when planning expenditure - or face losing their jobs. It looks like they have acheived a margin / buffer of 2%, which is great if you are a business, but bad if you are one of the patients queuing in an ambulance for a bed in Norwich last night.
The NHS's rationale is to provide care, not to make surpluses, get involved in market economies and not to put patients at risk through bizarre, outdated and damaging practices such as the health care market. We only have to look at the pinnacle of healthcare waste - the US system - to see what the market can do for healthcare.