Paste your Google Webmaster Tools verification code here

Healing the Finances of the NHS

The financial problems of the NHS are extremely serious—but more like anaemia than haemorrhage. It is the financial equivalent of a long-term medical condition.
The NHS Commissioning Board has just appointed Professor Malcolm Grant as chair and must now determine the likely funding, costs and demand over the next five years. Not just the cost commitments that are already there for example from PFI schemes, but also from increasing numbers of medical graduates, and rising energy and food prices.
Trusts’ financial problems have probably been under-estimated. The Department of Health names 20 trusts it is concerned about, but 18 others with PFI schemes and at least three in the London area with known financial problems can be added to that list. Most of the 40+ trusts with problems are in or near London.
The NHS has to redesign services while facing deep uncertainty about budgets. By 2013 the 250 new clinical consortia will have allocated budgets but it will be 2014 at the earliest before they can be confident these are realistic.
There is a danger of funding for new programmes being blocked. Managers are preoccupied with short term survival and consultation activities when the service is faced with urgent funding and design problems, with great uncertainty about responsibilities, funding and service development. There are also problems looming regarding quality of care, especially for elderly patients.
PCTs have data on activity and cost which will not exist for new boundaries, and PCT clusters can work as development agencies for the consortia during their brief remaining life. A three way partnership between clinical consortia, PCT clusters and local government, in its new and positive public health role, is needed, with close co-ordination due to the four different funding streams: the clinical consortia, the National Commissioning Board, the health and wellbeing boards, and social care funding.

Local strategy must be defined first. As the old and wise maxim says, strategy has got to come before structure. New services are going to have to be paid for by savings on the old ones, but the incentives to make them would be much greater if people had some idea of what the money would be spent on.
The new consortia must make a start in developing these strategies well before 2013. Service redesign can use the new four-staged model of healthcare – prevention, early diagnosis, ambulatory treatment and care programmes.
Many current services are obsolete, provider dominated and the wrong side of the digital divide. We need a process of change that will take years but has to start with a clear statement from the new commissioners of what they want. They should signal their intent to use patient choice and willing providers as key resources in getting change. International evidence supports a new approach to hospital admissions. From 1999/2000 to 2009/10 hospital admissions rose 38 per cent in England, compared to 1.6 per cent in Sweden. Both nations have ageing populations yet admissions for the over 75s increased 66 per cent in England compared to 0.6 per cent in Sweden. Reduction in growth of admissions is essential to the improvements in quality of hospital care and should be a major priority for the new consortia.
The Nicholson challenge needs to be redefined in terms of 10 a per cent reduction in costs – and not just for hospitals. The immediate goal is for £15-20bn of savings but all of this cannot come from acute hospitals when they account for only 39% of PCT purchasing of services and the rest goes on primary care, community and mental health services.
Some savings need to be re-invested in better care for elderly patients and new drug therapies, where spending has been rising 10% a year. Such cost cutting is important as per patient costs will rise in response to reduced admissions.
Finally a bonfire of controls must be lit. The general aim of moving commissioning closer to patients is a good one but it will be tough to kick the central planning habit. Local commissioners and providers must regain their initiative and flexibility. The NHS has attracted many talented staff in the last ten years. Let’s use them to get back to solvency.
by Nick Bosanquet, Director Volterra Health as featured in the Health Service Journal 10/11/2011

Subscribe to our newsletter

Subscribe to receive our monthly newsletter to keep in touch with what we're up to.

Contact Us

56-58 Putney High Street, London, SW15 1SF
Phone: 0208 878 6333
Visit Us On TwitterVisit Us On Linkedin