Comment / Hunt outlines savings focus needed to reach £22bn target

The FYFV, which was published last month, repeated an earlier calculation that the gap between funding and demand in England
would reach £30bn in the next five-year period. However, the gap
could be closed with rapid investment to move to new care models
and efficiency gains of 2%-3% each year. If this were achieved, the NHS would need still an additional £8bn above inflation over the five years.

In a speech to the King’s Fund, Mr Hunt said there were ‘four pillars’ to the government response to the FYFV:

•  A strong economy to increase NHS funding
•  Integrated care, closer to home
•  Innovation and efficiency
•  Culture.

Focusing on innovation and efficiency, he said he was increasingly optimistic that the FYFV efficiency savings could be met while at the same time delivering safer, higher quality services.

The FYFV set a £22bn efficiency challenge for the next parliament. While this was reminiscent of the £20bn Nicholson challenge, the way the savings will be delivered will differ.

‘As the forward view makes clear, long-term pay freezes are unlikely to be viable if the NHS is to retain the staff it needs. But, as before, we will need a combination of national and local initiatives, so I want to outline 10 savings challenges we can help NHS organisations deliver – challenges that between them could save between £7bn and £10bn by 2020,’ he said.These included:

•  Safer care (preventable harm costs the NHS up to £2.5bn a year, he said)
•  Cutting unused drugs in primary care
•  Reducing the use of agency staff and management consultants
•  Better use of technology.

A toolkit to help trusts reduce agency spending would be published. He also challenged the NHS to cut back-office costs further, potentially producing a further £500m saving.

The health secretary added that the budget holder that pays for preventing illness should see the financial rewards from this investment. To this end, NHS England will ask all clinical commissioning groups to collect and analyse expenditure on a per-patient basis. As co-commissioners, CCGs with NHS England and, potentially, local authorities, will be able to pinpoint more clearly where there is the greatest potential to improve patient outcomes by reducing avoidable costs through more innovative use of preventative measures.

Mr Hunt concluded with his vision for the future NHS. ‘A properly funded healthcare system backed by a strong economy. New models of care appropriate for an ageing population with the safe sharing of data. Innovation and efficiency that saves money and puts patients in the driving seat for their own healthcare. And a culture of safe, compassionate care where patients always come first.’