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- The Reformer Blog
15 June 2015
In the election campaign, undying love was professed for the NHS and more money was promised; but little was heard about major reform. Now reality means the poetry of campaigning has to be replaced by the prose of governing. This means urgently tackling the rapidly deteriorating NHS finances and upping the tempo of service delivery reform. As some of us indicated well over a year ago, solving the NHS cash and care crisis requires tackling both issues simultaneously and at pace. The Office of Budgetary Responsibility has now reminded us that demography means that the NHS’s financial challenges stretch well beyond the next Election. Our national institution is on a trajectory of decline and bankruptcy without urgent reform.
With have to rid ourselves of the myth that we simply don’t spend enough money on health. The UK spends just over 9 per cent of its GDP on health which is the OECD average. Spending on the NHS rose by an average of nearly 1 per cent a year in real terms in the last Parliament, much more than other public services. The problem is not lack of money but the way the NHS spends it. And the public is starting to wake up to this. The 2014 British Social Attitudes Survey shows 51 per cent of the public thought the NHS wasted money.
The NHS’s main problem is its poor productivity arising from the way it uses staff to produce the wrong services in the wrong way and in the wrong places. It needs a productivity gain of over 3 per cent annually, year after year, stretching over the next decade. The average for the last Parliament was under 1 per cent, with most of this achieved by cutting staff pay. The critical problem is in the acute and specialist hospitals where the annual efficiency improvement averaged 0.4 per cent over the last Parliament. Pumping more and more money into unreformed acute hospitals guarantees NHS bankruptcy.
The good news now is that the NHS now has a chief executive, Simon Stevens, who recognises the gravity of the situation; and has even come up with a plan for tackling the problems in this Parliament – the Five year Forward View. The NHS has to be turned round fast with much more emphasis on preventing ill-health and much more care and treatment provided in the community rather than in hospitals. Staff need to work in radically different ways, with much greater use of technology by a too-often Luddite NHS. The budgets and care delivery of the NHS and social care must be integrated nationally and locally – and fast. Unchanging and failing providers have to be replaced much faster, with a willingness to use competition to do this. 55 per cent of the public don’t care if their NHS services are provided by the public or private sector, providing it’s free
Simon Stevens is moving fast to new models of care with more emphasis on decentralising decision-making, with Greater Manchester as an exciting example. The question is whether there is the public, political and NHS will to make the changes fast enough and to secure the productivity improvements required. Unless we up the pace of health and care reform now there will be an NHS funding crisis well before the next election.
Lord Warner, Former Minister of State, Department for Health