Comment / Ensuring the NHS is eQIPPed to save

The starting point for QIPP delivery has to be with well thought out demand management plans, leading to real trust between commissioners and providers

Judging the HFMA Efficiency Awards during November and chairing the Financial Management and Research Committee a couple of days later highlighted the huge task facing the NHS in delivering savings. Despite the fantastic ideas that are out there, they are often small steps compared with the giant forward strides needed on productivity.

I’m certainly not here to query whether the NHS can deliver the £20bn savings said to be needed over the coming spending period. But it is clear that we need to identify and eliminate any obstacles that still exist to delivering the required improvement.

Perhaps fundamentally, commissioners and providers need to trust each other. I’ve been in meetings over the past decade where commissioners in contract negotiations have promised reductions in demand. Then I’ve returned to my desk and planned for a further increase in demand. And on those occasions, I was right to trust my instinct. 

Some providers have reduced capacity in the past on the basis of commissioners’ plans, only to have to reinstate that capacity mid-year, often using expensive agency staff. But woe betide the provider that retains capacity only to find that demand management really does deliver – this could have disastrous results for providers’ finances.

If QIPP is to deliver, we must reduce acute activity, and providers must reduce capacity. Early signs this year are that the trend lines on activity are going in the right direction – and the Department of Health  is expressing confidence that successful demand management is becoming more widespread.

The next step – providers’ turning this into real savings – requires providers to have faith in commissioners’ ability to deliver and take the capacity out.

Somehow, we need to ensure the incentives are properly aligned for QIPP delivery. We’ve read in Healthcare Finance recently (November 2011, page 13) about the potential for telemedicine and telehealth to deliver the holy grail of healthcare – better care for patients that really reduces admissions, length of stay and costs. But current payment systems can leave trusts investing in this technology, while the savings are realised elsewhere in the system.

Closer to home for me, ambulance trusts are being urged to avoid patient conveyance, to treat patients on scene, or even to avoid sending a conventional resource altogether. But plans for payment by results in that sector could see such good service developments lead to a reduction in income. These issues are fixable, but they do need to be fixed.

A further challenge is to overcome resistance.  Reducing capacity will always prove unpopular whenever and wherever it takes place. But there are anecdotal reports of trusts at loggerheads with their overview and scrutiny committees (OSCs) over plans to reduce capacity, even where this does not represent a fundamental change in service provision. 

The HFMA has said it before – perhaps most powerfully in a joint statement with the Academy of Medical Royal Colleges last year: ‘A reduction in hospital capacity can be a consequence of improving quality, patient safety or cost-effectiveness and not simply a contraction in service.’

But if we hope to take the public with us, the starting point has to be getting the OSCs on board.

We have seen more political support for major configurations starting to emerge. This is a positive development, but we need to win the argument for the lower profile changes too.

In many ways there is nothing new here. We’ve talked about demand management, the right incentives and backing for well planned changes for years. The difference now is that failure – or even partial progress – is not an option.

Keith Wood is chair of the HFMA’s Financial Management and Research Committee