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Reform’s fourth annual NHS report begins with a review of seven international clinical benchmarking exercises presented in 2007. The exercises have revealed what amounts to a cradle-to-grave performance gap compared to peer group countries. Separate reviews of UK services, such as maternity, have also raised grave concerns. The consultation document for the redesign of the London NHS gave a realistic assessment: “The UK is falling behind other countries in the quality of care we give to patients, access to care, and the cleanliness of our hospitals.”
Other research has shown that the NHS is facing a perfect storm – an ageing population, expensive new technology and a more informed society. The compliant stoicism of post-war Britain has evaporated.
The medium term requirement is investment in many areas. Funding will be restricted given the immediate pressures of a slowing economy and longer term concerns over economic competitiveness. The strategic challenge is to redesign and improve services within a ceiling of 9-10 per cent of GDP.
2008 is a turning point, with two possible futures:
The Department of Health’s rhetoric is consistent with the positive scenario. Officially, 2008 will see the completion of the current reform programmes (except payment by results). But this is a national mantra rather than local reality.
The problem is not the principle of reform. In principle, the reform programmes will rightly shift the balance of power in the service towards consumers and allow competition and choice to drive innovation. They will also reorient services towards integrated care and prevention.
But the internal market has become lopsided. Crucially, the demand side programmes have failed to drive significant changes in services in the interests of patients. Management ability, flexibility and (increasingly) financial surpluses lie on the side of the providers:
The return of the service to financial surplus does not signify a new settlement in which investment can take place. The surplus is due to a temporary combination of the last years of major funding increases and a pause in centrally-prescribed cost increases, which are already building up again. The Department’s latest estimate for the future costs of hospital construction is nearly £15 billion, for example, compared to its maximum estimate of £6 billion two years ago. It made spending commitments of over £1 billion in December 2007 and January 2008 alone.
Current trends therefore point to the scenario of decline. But this is not inevitable. An acceleration of real change would unlock the benefits of reform before the next General Election.
The key to unlocking opportunity is an economic constitution for the service that defines duties to create value at all levels. It should have the following features
Such a constitution will create incentives for better financial management. The system continues to lacks the basic tools of financial management which give staff the capability for achieving value for money.
It would meet the Prime Minister’s call for a new focus on public health and inequalities. The reform agenda is essential for any new moves to improve access in deprived areas.
The current drift of policy ignores the very clear international evidence about the gains to choice and competition. Strong use of incentives and pluralism have practically eliminated waiting times in a range of developed countries including Denmark, Belgium, Spain and Australia (and have led to as good or better outcomes and better access area than in England). England has seen significant reductions in waiting but these have been bought at a huge cost. They could have been achieved much more quickly by use of competition and pluralism with a more limited and targeted increase in funding
An economic constitution based on incentives, pluralism and local capability should be the key outcome of the Department’s current landmark review.PDF DOWNLOAD