NHS told to prepare for funding slowdown

11 May 06
NHS management must overcome a number of challenges if the service is to cope with the expected slowdown in its annual funding increases after 2008.

12 May 2006

NHS management must overcome a number of challenges if the service is to cope with the expected slowdown in its annual funding increases after 2008.

The conclusion was reached by influential commentators and senior staff at a summit organised by the King's Fund, according to a statement issued by the charity.

The participants – many of whom will form and implement government policy over the coming years – agreed that once the service was back in financial balance, the NHS must improve its performance and productivity. It will also have to overhaul its measurement of health outcomes and introduce more sophisticated incentive systems.

Delegates at the two-day meeting at Leeds Castle in Kent included NHS finance director Richard Douglas; Will Cavendish, the Department of Health's director of strategy; and Institute for Fiscal Studies' director Robert Chote, together with frontline staff and health policy analysts.

The experts believe that next year's Comprehensive Spending Review will award real terms increases to the NHS of between 3% and 4.4% for 2008 to 2012 – around half the annual spending increases since 2001.

The summit suggested that productivity could be improved by addressing variations in hospital and clinical performance.

The service should measure how its interventions affected patients' health as soon as possible, to give GPs and primary care trusts more information about the outcomes of the care purchased and give the NHS as a whole more information about its productivity.

While financial incentives, such as payment by results, would help to improve performance, the health service needed to understand non-financial motivational factors.

King's Fund chief executive Niall Dickson said the drop in funding growth should not be a cause for alarm, provided the NHS gets some extra funds and has time to plan for lower growth. But the challenge was 'considerable'.

He added: 'It will also mean that local organisations develop a much greater understanding of the different needs of individual patients, and for some organisations that will demand a very different approach to delivery.'

A full report of the summit is due in the autumn.

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