There are plenty of pundits and commentators who assumed or suggested that the reform package proposed by Andrew Lansley during his time in opposition was not particularly radical. Now in government though it is becoming clear that the new secretary of state has a genuinely radical agenda in mind.
His plans transfer power and control of much of the money to GP groups who will commission most services. The traditional top-down structure we are used to will be replaced by an independent board which will oversee the system while providers become increasingly independent – perhaps going as far as being off the balance sheet. And a system that is fully open to competition and regulated as a market and with much greater choice, contestability and transparent information will, of course, require new behaviours and ways of working.
It is becoming increasingly obvious that the total reform package proposed is huge and ambitious and the transition path to getting there has some significant risks. Perhaps the most significant is that the NHS, although protected in real terms, still has to make some very significant efficiency savings. The figure of £15-20 billion is in common currency and this represents the amount the NHS must find in savings if it is to become one of the most efficient healthcare systems. There are plenty of cost pressures around to make this an even greater challenge; from rising demand, new drugs, new policies and rising costs not in the general inflation measure as well as and from pay drift, which add up to 3-4% cost pressures in each year. Add to that the increased pressure from 2014 of a more rapidly aging population and the scale of the challenge is clear and daunting. The better news is that much of the money saved can be ploughed back into patient care, although the savings still have to be found in the first place of course.
Most of the immediate savings will have to come from operational improvement, back office rationalisation and the sort of standard efficiency improvements that many in the NHS are used to. However, this will only go so far and much more ambitious changes will be required including the redesign of care to improve its quality and efficiency. There is a fond hope amongst many policy makers that moving work out of expensive hospitals will save money. In an accounting sense it does but unless the hospital can reduce its fixed costs the savings remain notional. Shifting work only saves money if large scale capacity can be shut – this means big interventions rather than small projects. Even better are measures to prevent patients from needing admission in the first place and there is significant scope to improve primary care and how it collaborates with specialist care to achieve this.
Any one part of this, not to mention developing a new GP contract, changing the provision of out of hours, setting up a whole range of new structures, creating new regulatory machinery, developing information publication mechanisms, would be a significant project on its own. Together it is a huge task and one which will have to be done with significantly reduced management by people who may not feel that they have a very secure future. It all amounts, as the NHS Confederation has already said on more than one occasion, to the greatest challenge the NHS has ever faced.
Nigel Edwards is director of policy and acting chief executive of the NHS Confederation
Read the NHS Confederation's report Dealing with the downturn: using evidence
