Comment / Fixing the NHS

The move to two-year planning guidance with two-year tariffs and system control totals is a good step forward. For a service that has been asked to plan for the longer term (or sustainability as the current fashion would have it), one-year contracts and annual price changes have looked out of place.

Too often in the past, organisational targets and must-dos have not been aligned across a system. What has been best for the broader health economy – and patients and populations in general – has not always been best for individual organisations.

Calling for organisations to make decisions in the interests of broader populations or system finances, and then criticising the organisation if it makes a deficit as a result, simply doesn’t make sense. But on its own this longer term focus won’t fix the financial problems facing the NHS.

New models of care are the right thing to do. Some of the ideas emerging from the various vanguards – early recognition of illness, sharing of best practice, more community support – are brilliant. There is little doubt they will lead to better outcomes and better patient experiences. But the financial outcomes are less clear.

There is plenty of theory around how better community support for patients with long-term conditions should lead to downstream savings as they avoid high-cost acute hospital admissions, potentially with long stays. But as yet there is little hard evidence. On their own, they are unlikely to fix the NHS’s financial problems.

The NHS – as Lord Carter argued – could be more productive. There is huge potential to eliminate unwarranted variation in clinical practice. There really are opportunities to improve services for patients and cut costs.

Many organisations are doing this at a local level using Lean management techniques to examine theatre efficiency or ward practices. Increasingly providers are using patient-level costs to help them explore these opportunities and there is significant potential to ramp up benchmarking. But much of this improvement work is at very small levels – in fact that is how it works best, ensuring clinical ownership. The service improvements are great and often the savings are real, but they must be pursued on a much grander scale and that will take time.

Back-office functions and procurement could also be more cost-effective. But there are concerns that some of the savings could be at the expense of having the necessary support available to pursue some of the initiatives mentioned above.

In short, better productivity on its own won’t be enough to fix the financial problems facing the NHS – at least not within the timescales required. To deliver a sustainable NHS for the future, what is needed is for all the above to be pursued simultaneously and with enthusiasm.

Of course this needs to be done while also managing day-to-day services and delivering this year’s financial totals. It is a matter of opinion how achievable this is. Extra NHS funding has always been a favourite cry for opposition politicians.

But we are seeing an increasing clamour building around this view. Liberal Democrat leader Tim Farron (filling the void left by Labour’s internal squabbles) last month called on the country to face the ‘hard truth that the NHS needs more money’, putting the Liberal Democrats firmly behind raising taxes to fund health services.

In the absence of additional funding, the HFMA has consistently called for a debate on what the NHS can and cannot afford to deliver within existing funding levels. And last month NHS Providers reinforced the point, calling for ‘national health chiefs and political leaders to acknowledge publicly that the NHS can no longer deliver what is being asked of it for the funding available’.

Even with extra funding, all the above improvement work would still be needed. However, it may allow for more realistic timescales.