The pre-Christmas snow shower of documents did little to gather momentum towards better services. Rather, it added to the risk of planning blight for new organisations which have to find personnel and trial their powers and budgets. These are my five steps to rescue the change programme:
First, keep primary care trust clusters for at least five years as development agencies for the new commissioning consortia. PCTs have experience and it would be wrong to throw this away. They also have data on activity and cost, which would not exist for new boundaries. We need a three-way partnership between consortia, PCT clusters and local government in its new and very positive public health role.
“Unless they start to save now, many trusts will face the choice of reducing access to services or insolvency”
Second, reprogramme the £15bn-£20bn target for savings. We seem to be under the illusion that all the savings can be made by hospitals, but it is impossible to make savings of this kind from the hospital budget alone as this represents only 39 per cent of PCT purchasing of services.
Much of the rest is on primary care, community health and mental health services.
Reduced admissions and reduced variations in care have dominated the savings debate. If they can be achieved it will save a few hundred million at best. Even then, any savings need to be reinvested in better care for frail, elderly patients and better communications and, at least for some time, in new drug therapies where spending has been rising 10 per cent a year.
The £15bn-£20bn saving could be achieved if budgets across the NHS, including for primary care prescribing, were reduced by 5 per cent a year. This should be a local responsibility with cost reductions as a major new item on the agenda.
Third, lead through redesign. There should be detailed plans for redesigning services: the incentives to save would be much greater if people had some idea of what the money was going to be spent on.
The new pathfinders could make a start in developing these strategies. At present the theme of service redesign lacks a local core. Pilot schemes with a few sensors are not enough.
Many of our current services are obsolete, provider dominated and the wrong side of the digital divide. We need a process of change, which will take years, but this has to start with a clear statement from the new commissioners of what they want. The opportunity is there to invest in new kinds of service with earlier diagnosis, improved communication with patients and better outcomes. We need to put these positives at the centre of health policy.
Fourth, make detailed estimates of future cost pressures. The NHS has £10bn more from the spending review over the next four years, but this is needed simply to cover the cost increases coming through. New unitary payment for PFI schemes are at £5bn-£6bn. The NHS specific inflation rate for energy and materials will rise and there are other costs from the increasing number of junior doctors.
These costs, plus the additional diagnostics and care required to fix a long list of quality problems, add up to much more than £10bn. Some regions are worse affected than others. The final step is to start urgent action to avoid the Halloween meltdown I warned of last year (opinion, page 16, 21 October 2010). There is one unmentionable subject in all the recent documents, and that is the coming financial crisis of 2011.
Trusts have been used to 7-8 per cent a year income rise and now their income is set to fall 5 per cent as a result of changed incentives on emergency admissions and the zero increase in tariff prices. Unless they start to make savings now, many will face the choice of reducing access to services or insolvency beginning next November.
This crisis will in fact hit just as the new consortia are getting going and is likely to give them a highly disturbed start. A serious financial crisis next year would force a revision of the whole change programme.
The new documents do mention financial pressure and the need to maintain control, but they do not clear the way for local responsibility. Consortia have to make savings - but
these should be made so as to fit to local service redesign and local cost pressures. The savings have to be made but exactly where depends on local pressures.
At present the £15bn-£20bn is someone else’s problem. Liberating the NHS is about the freedom to take financial responsibility for local financial balance. The most powerful incentive is solvency.
Nick Bosanquet is professor of health policy at Imperial College London and chair of Volterra Health.
- Acute care
- Board Talk/governance/assurance
- Change management
- Community services
- Comprehensive spending review 2010
- Government/DH policy
- Health white paper
- Mental health
- Older people’s services
- Operating Framework 2011
- Primary care
- Service design