Hospitals warned to cut costs not services
By Richard Johnstone | 19 January 2012
not put cost-cutting before service improvements in their efficiency plans,
inspectors said today.
In a joint
report, foundation trust regulator Monitor and the Audit Commission say trusts
must transform health services as well as saving money.
The NHS is
required to make £20bn in efficiency savings by 2015 – an average of 5% each
year – to cover the costs of increasing demand for services and new
technologies. This is ‘the biggest efficiency challenge the NHS has faced’, the
report says. It is also being undertaken as trusts face a real-terms freeze in
Trusts should not
make ‘short-term reactive decisions, particularly if they may compromise
services and safety’, according to the report, Delivering sustainable cost improvement programmes.
A ‘more strategic
approach is needed’ to cost-cutting, as recruitment freezes and reductions in
agency staff are already in place, the inspectors say.
But they found
that savings plans across the health service, called ‘cost improvement programmes’,
vary greatly in their focus on achieving sustainably high quality services.
managing director for health at the Audit Commission, said that ‘success varies greatly from trust to trust’, but there were ‘higher performing trusts’ that have so
far been able to ‘deliver savings without reducing quality or patient safety’.
A guide has been launched today, aimed at executive and
non-executive directors and finance staff in the NHS, highlighting best
practice. It covers 16 organisations – five NHS trusts, ten NHS foundation
trusts and one primary care trust.
McKeon said the
guide contained ‘proven techniques’ to make savings. These include
better engagement with staff around the plan alongside strong clinical leadership and engagement,
with ‘clear lines of accountability and performance management processes’.
It also includes
a checklist that will ‘help trusts test how well they measure up’, McKeon said.
David Bennett added that foundation trust boards ‘must put clinical staff at
the heart’ of their plans.
savings is likely to remain one of the key challenges facing foundation trusts
– and the rest of the NHS – for the foreseeable future.
challenges facing the economy as a whole means that all trusts need to make
sure that they are making every pound go as far as possible so that patients receive
the quality care they deserve.’