McKinsey report: unthinkable solutions set scene for NHS cuts

2 June, 2010 | By Alastair McLellan

What lies behind the governments’s decision to publish the McKinsey report into NHS cost savings this week?

The McKinsey report has been in circulation for over a year, strategic health authorities all have their own versions and, of course, HSJ brought it to public attention last September.

For a “confidential” report, its headline findings - the “£13bn-£20bn” savings needed between now and 2014 - are very well known.

The purpose of releasing the report now is to encourage the NHS and other stakeholders to understand what those savings might mean and to engage with the methods needed to deliver them.

HSJ recommends that readers pay particular attention to the section entitled “making it happen”. It is here that the radical suggestions lie - for example, limiting or removing mandatory staffing ratios in areas such as midwifery. These ideas are very useful for a new government - which can set their face against “unthinkable” proposals and instead suggest ideas which, without this context, would have faced an even rougher ride.

Read the McKinsey report and you will be struck by how the proposed approach to delivering the savings echoes the QIPP programme. For all the talk you will hear of how this report was written for another government, never underestimate the ongoing influence of its analysis of the challenges to come.

Read the report in full

Readers' comments (6)

Anonymous | 2-Jun-2010 8:11 pm
The easiest way to resolve the funding gap is to slash the price of the Tariff and its associated market forces factor. This will hit the acute trusts who have been responsible for: stagnant productivity over the past 10 years; supplier induced demand since the introduction of the Tariff; and incorrect coding to increase profit/hide their deficits. These Trusts will have to boost volume just to stand still, which should cause waiting lists and waiting times to evaporate.

We all saw the amount of waste in “Can Gerry Robinson fix the NHS?”, where some consultants surgeons did just 2 operations per week, and refused to do full day lists, which were 33% more efficient than half day lists.

It is time for Monitor as the healthcare economic regulator to re-price the tariff in accordance with the top 25% of most efficient and safest acute trusts in the country, rather than applying the average price of all acute trusts. It only requires a 5.2% year on year reduction in the Tariff to keep the NHS model affordable.
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Anonymous | 2-Jun-2010 9:49 pm
What a ridiculous comment in the first post. Those comments demonstrate a complete lack of understanding about healthcare provision and resourcing and sounds like a bitter PCT/SHA or DH person struggling to do their job.

Let's just take their suggestion of cutting tariff and MFF. I've also witnessed SHA CEOs and DH staff say this too which is worrying. If the funding were cut then does everyone believe the acute sector would simply improve productivity and reduce costs overnight? Get real and try and understand the problem.

Firstly, read the Kings Fund report on where all the billions went. It will tell you that half of the £60bn increase in the NHS budget over the past decade went on (poorly) negotiated pay contracts. Other funding went on expansions in primary care, community services, new drugs, more staff, and thousands of competing targets which have little to do with treating patients. After those things were taken into account less than 1% in real terms growth was received by the acute sector - not my figures!

What is true is that productivity has improved but has not kept pace with funding. It's not surprising really when you consider the above and that hospital doctors have one of the most constraining contracts in the developed world. A bit like GPs who have to be paid extra to give flu jabs! What a disaster the NHS now is.

So please try an understand the problem before trying to fix it. As for Gerry Robinson, I may need to point out that it was a TV show, they showed you the extremes that make TV. For every doctor that is under-performing I'll show you ten so-called commissioners who are too!

Also, it astounds me that you can define 'safe'. The CQC can't. So why does the cheapest 25% also mean safe. I think you'll find that's not the case at all in the fullness of time.

Finally, may I suggest people in glass houses...
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Anonymous | 4-Jun-2010 10:09 am
Anonymous 8.11 - spot on
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Anonymous | 7-Jun-2010 2:10 pm
I find myself in difficult position here. I look at both comments and agree with elements in both. But this only adds to us all knowing where the issues are but still awaiting someone to take action and address them.
So in real terms I can only point the finger at the DoH / SHA and PCTs for not sorting it out.
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Patients' Council | 8-Jun-2010 7:20 pm
I have read the above comments with interest and reviewed quickly the report in question. I am concern that the report and comments do not refer to patient and carer involvement, if we want services to be used correctly and thus help reduce some costs we need both the patient and carer to be involved in approving changes.

The days of service users not knowing what is right or wrong are long gone, there are many people out there that can and do bring vital stats, foresight and total pathway experience to the table to help improve services.

At the Patients' Council we have been reviewing many areas that patients and carers feel monies can be saved and are being wasted. Many of these areas may not be huge but added together will bring massive savings.

If only service users could see and recommend that we have too many hospitals, A&E departments and inactive contracts. Or that money is wasted in ineffective communications, inappropriate patient transport services, we might be involved in helping drive efficiencies and improving the quality of care we all receive.

We speak from experiences as a group we have and continue to work with a number of Primary Care Trusts etc. in reconfiguring services that have genuine patient/carer involvement.

Let not go backwards and treat patients with disregard as we have done, the right time to involve service users is at the very beginning not when commissioners and clinicians have decided what they think is best as it is not always best.
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Anonymous | 9-Jun-2010 3:28 pm
I was surprised to read the second contributor's comment that UK "hospital doctors have one of the most constraining contracts in the developed world"!!! That goes contrary to what most of their European colleagues as well as healthcare economists are saying when making comparisons!

It is true that most of the increase in the NHS budget over the past decade went on poorly negotiated pay contracts, but wasn't it exactly the hospital doctors (consultants in particular) who got the lion's share in that? It is only fair that such highly paid professionals are expected to be productive and adapt their styles to the most efficient working models! It is the productivity of the healthcare professionals (GPs & hospital consultants in particular) that will improve the efficiency of the system, not that of the commissioners or back office bureaucrats!
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