Economic modelling by the Institute for Fiscal Studies suggests that unprecedented productivity increases are crucial to NHS sustainability. In this paper we recommend several priorities be pursued.
In our response to the Health Committee’s Public Expenditure Inquiry 2012, we welcome the return to this important topic. But with real and rapid productivity increases required and with no guarantee that the NHS can deliver them, we outline a number of priorities.
First is the system of provider payments, which includes hospitals and GPs. It is vital that managers within the NHS have a clear understanding of what their costs are, how costs vary between trusts, and the extent to which payments match efficient costs.
Primary care will be a key component of any drive to deliver more coordinated care in the community and the identification of savings needs a careful, evidence-led approach
This will become particularly pressing with the introduction of a more transparent system of payments and subsidy brokerage.
Second is the productivity and quality of primary health care – a neglected topic in the 2011/12 Operating Framework. Locally there are reports of large cuts to local enhanced services (LES) contracts, many of which appear to be ad hoc and cost driven.
Primary care will be a key component of any drive to deliver more coordinated care in the community and the identification of savings needs a careful, evidence-led approach.
Third, the latest financial data confirms the growing strength of the commissioning sector as risk is increasingly transferred to providers through changes to the payment system. In seeking to place NHS trusts on a sustainable footing ahead of securing foundation trust status, the key step is a proper understanding of why these organisations are financially challenged.
Nuffield Trust (2012) Health Committee: Public Expenditure Inquiry 2012. Briefing.