'Providers under fire are likely to react to fill up their capacity and treat more invasively. This will mean more operations and more investigations.'

The grand plan for this financial year in the NHS is quite simply to achieve financial balance. NHS South West chief executive Sir Ian Carruthers, formerly acting NHS chief executive, would say that without budget control you can't plan, and if you can't plan you can't invest in the future.

As a senior manager he is in part right, but there are many organisational reasons why this has been difficult and is only going to get harder. The NHS has been split into two teams: provider and commissioner. With the head start given to providers by payment by results, GPs and primary care trusts find themselves as underdogs sponsoring practice-based commissioning.

Whether you intend to conduct trench warfare through practicebased commissioning or jointly wave white flags with your acute trust and consider a community venture (the latest plan in my patch) there are some huge challenges.

Hospitals have always controlled the NHS power base, and as a result just about all of the cash. Will this time be any different?

Payment by results rewards hospitals for treatments and procedures and, of course, we need it as a transaction system. The trick for GPs and PCTs will be to find ways to provide financial reward for keeping patients fit and healthy. A wise GP once told me, 'your job is to keep patients away from hospitals', and it is as true now as it has ever been.

The second problem will come as the mysterious 10 per cent of secondary care 'overtreatment' is magically moved into primary care.

The most obvious result may well be a few district general hospitals threatened with closure (draw an imaginary map in your head correlating the financial position of your hospital to the marginal nature of your constituency seat). No prizes for guessing which areas need to raise their commissioning game.

But as the lowest hanging fruit are stripped out of hospitals, higher overheads will be applied to the remaining treatments. The pressures for hospitals to treat will increase as will the need to face the world of efficiency and productivity gains.

Third, we will have to commission to counter problems of supplierdriven demand, a phenomenon well recognised by the US economist Michael Porter. As a student I saw my consultant walking down a corridor and approach a member of the public with a thyroid mass and invite her to his next clinic. Publicspirited no doubt, but what would happen to your budget if every admission was screened for hearing loss and offered a hearing aid?

Providers under fire are likely to react to fill up their capacity and treat more invasively. This will mean more operations and more investigations.

The final point is that as we start to think about outcome and quality we will need to define at what point more care is enough. The third greatest cause of death in the western world is not thought to be stroke, diabetes or chronic obstructive pulmonary disease but the process and errors of hospitalisation. Lucky survivors will endure more tests and treatments and greater lengths of stay.

Worried that influencing all this might be a tall order? Me too.