Baumol’s cost disease

The cost of healthcare continues to rise relative to GDP because of the high costs of retaining highly qualified human resources. Meanwhile, automation in other sectors rises, pushing out workers, with a negative effect on GDP. This results in funding constraints on the NHS and a reduction in consultant posts that are no longer affordable.

Proposed workforce impact

• Reduced money is available for healthcare, so there are resource, recruitment and retention issues.

Sources or references

• www.nuffieldtrust.org.uk/.../121203_a_decade_of_austerity_full_report.pdf
• www.abetternhs.wordpress.com/2011/06/29/competition/ 

Additional research questions

• Will the Baumol effect become an accepted part of the NHS, allowing health to consume a greater percentage of GDP?

Some of the information in this section is provided by stakeholders and expert groups, and does not necessarily represent the views of the CfWI.