The NHS’s £20bn savings drive can provide the “crisis” it needs to transform physical healthcare in the same way it has transformed mental health services, Jim Easton said yesterday.

The NHS national director for quality and efficiency said for many years “the embedded structure of interests” in the NHS had prevented it from moving to better models of care, which would reduce its dependence on inpatient hospital care.

He said the quality, innovation, productivity and prevention (QIPP) savings programme, which he leads, had opened “the lid on the ‘too hard box’, and means you have to face up to it”.

Mr Easton said 20 per cent of the £20bn savings needed by 2015 had to come from “deep service changes” in areas including treatment of long-term conditions and patterns of urgent care, which were “primarily about more choice and control for individuals, and care out of hospital”.

Speaking at the NHS Confederation’s annual conference in Manchester yesterday Mr Easton said: “We have to see [QIPP] not as some wearying collection of cost improvement programmes but as a genuine bridge to the sort of change in care that we want. Never waste a good crisis.”

The DH national director for improvement and efficiency said he believed aspects of physical healthcare in the NHS were about embark on the same journey mental healthcare had taken in the past 50 years, which have seen a massive reduction in numbers acute mental health beds.

He displayed an excerpt from a speech given by Enoch Powell, then health minister, in 1961, which “fired the starting gun” for the reform of mental health.

It read in part: “We have to get the idea into our heads that a hospital is a shell, a framework, however complex, to contain certain processes. And when the processes change or are superseded then the shell must most probably be scrapped and the framework dismantled…

“Hundreds of men and women, professional or voluntary, have given years, even lifetimes to the service of a mental hospital, or group of mental hospitals… From such bodies it demands no mean moral effort to recognise that the institutions themselves are doomed. It would be more than flesh and blood to expect them to take the initiative in planning their own abolition, to be the first to set the torch to the funeral pyre.”

Mr Easton said that while he was “deeply uncomfortable” to be quoting a politician who in many ways he despised, “you have to change about three words” of the lines he quoted to make them “completely applicable”.

He told delegates: “My dad has chronic lung disease. There are people in this room, whose hospitals he goes into, who’ve done a wonderful job of stabilising him and returning him to gradually decline again in the community…

“It’s inconceivable to those good colleagues that a different pattern of care exists, and yet we know it does, you can touch it in different parts of the world and different parts of the country.”

He added: “Great leaders of hospitals – and a number of them are beginning to do this – need to see that the opportunity exists to run great care businesses, not great hospital businesses.”

However, speaking to HSJ earlier that day Mr Easton said that “outside of a number of places where reconfiguration was already an issue, [QIPP] doesn’t generate the closure of hospitals, it generates change in the acute bed numbers in those hospitals”.

He added: “This is not me, this is what local plans say. QIPP drives bed number reduction particularly in medical care. There’s still further to go in surgical care. It doesn’t look to us – outside places where this is already an issue – we don’t think QIPP of itself drives a whole new swathe of hospital closures around the country.”

The department’s plan is to make 40 per cent of QIPP savings through “national levers” - including the current pay freeze and management cost reductions - and another 40 per cent through increased provider efficiency, driven by reductions in tariff prices.

But Mr Easton said the last 20 per cent would have to come from major service change, on top of increased productivity within providers. He said: “The evidence tells us that while there is a lot to go at in the efficiency pile in current providers, there isn’t enough to deliver the whole problem. We don’t think you can just keep squeezing tariff and changing the rules about readmissions. There’s 40 per cent to go at there, but there isn’t 60 per cent.”