7 January 2009 / for immediate release
Think-tanks Demos and Policy Exchange have today published their outcomes of two separate roundtable debates on how the NHS can survive in a ‘cold’ economic climate. The debates involved politicians, political advisers and policy experts, academics and NHS leaders and were conducted in partnership with Tribal as part of its ongoing work to provide the NHS with more certainty on what the post-election landscape will look like.
The two think-tanks have published their findings today, informed by a fundamental understanding from both that NHS funding will not continue to grow year on year for the next financial settlement and that there is substantial capacity for improved productivity in the NHS.
Key areas of discussion on where productivity savings could be made centred on:
- following the choice agenda – how competition acts as an incentive in increase productivity
- The need to shift more services from acute to community settings.
The Demos discussion agreed that:
- using competition as an incentive for the NHS was a significant driver of productivity
- competition would inevitably lead to some decommissioning of services where there was excess capacity, requiring a clear ‘failure regime’ in order to release savings for the NHS
- only the most efficient operation of services will produce productivity gains – with more widespread use of best practice tools, information and incentives
- moving care from acute (hospital) to community settings would significantly improve productivity for the NHS, particularly in areas such as cancer, mental health or end of life care
- joint working between health and social care could produce efficiency gains, for example in the steps between the end of a patient’s stay and their return home.
Demos’ discussion concluded that the key to these gains would be to ensure that any changes in working, especially a longer term shift from acute to community care and improved interface with social care should be taken fairly and equitably, ensuring both the most vulnerable patients and lowest paid health and social care workers were not unduly affected.
Policy Exchange suggested that:
- Performance related pay: incremental pay increases which cost the NHS £420 million per year should be linked to wider organisational performance.
- Reducing variations in clinical practice: all NHS organisations performing as well as the top 25% could yield a productivity gain of approximately £7 billion per year.
- Management capability: focussing attention on developing more doctors into managers would deliver disproportionate benefits in the short term. Top performing NHS managers should receive performance related bonuses of around £30,000.
- Decommissioning services: National Institute for Health and Clinical Excellence (NICE) should evaluate existing NHS treatments and exclude those that no-longer represent value for money.
- Transformational change projects: a full scale integrated care pilot should be set up covering any one of a number of financially challenged hospital trusts and their local health economies.
To provide the NHS with the funds it needs during the downturn, Policy Exchange’s discussion favoured improving productivity in order to deliver savings for the NHS, as opposed to using top-up or co-payment mechanisms to introduce additional funds which would be a more fundamental change to NHS principles. Their conclusion was that introducing linking increases in productivity and efficiency to incremental increases in pay for NHS staff has the potential to deliver half of the savings required.
Both papers are available download at the addresses below. Tribal will be producing further research in early 2010 on the areas of overlap and divergence between the two roundtable debates and political landscape that this provides for the NHS.
Matthew Swindells, Managing Director for Health at Tribal, said:
“We cannot underestimate the importance of this work; particularly as there is little consensus, or even acceptance, within political parties about the level of cost reductions required in the NHS and how to achieve this.
“Tribal’s recent white paper has made clear our view that the NHS needs to radically improve its productivity if it is to survive the cuts in public spending, alongside the growing needs of our population.
“This activity is leading the debate on the NHS' future to the next level, so that we do not lose time crucial to preserving a publicly funded health system in the UK.”
Ends
Notes to Editors
Download the Demos paper, “The NHS in an age of progressive austerity”
Download the Policy Exchange paper,“Controlling Public Spending: The NHS in a period of tight funding”
About Tribal
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