How the cash crisis will hit the NHS

Battle lines are being drawn throughout the NHS as the prospect of funding cuts looms. Tom Ireland reports.

Mike O Brien
Mike O Brien

A sizeable shadow hangs over the future of the NHS, in the form of the £20 billion funding shortfall forecast this summer by the NHS Confederation.

With this gloomy warning ringing in their ears, some of the most influential figures in the NHS met in London last week to debate its impact.

The King's Fund chief executive Niall Dickson served up more ugly figures. The NHS needs 1.1 per cent growth every year to keep up with age and demographics, he told the Westminster Health Forum event.

He suggested that under Labour, three funding scenarios were possible, from 'tepid' to 'cold' or even 'Arctic' - with the latter two now more likely.

Meanwhile, although the Conservatives have pledged real-terms growth in NHS funds, analysts have predicted they will struggle to achieve it.

Scope for reducing waste
Nick Bosanquet, professor of health policy at Imperial College, London, reminded delegates that the NHS still has an extraordinary amount of money. NHS London, he pointed out, has around 1 per cent of UK GDP at its disposal.

'There is a much better health service out there available to us,' he said, arguing that prevention, early detection and better communication with patients could cut huge numbers of 'unnecessary' interactions within the NHS.

Many speakers agreed it was vital to stop money haemorrhaging out of hospitals. 'Why do we have more hospitals than anywhere in the G8 just as we want to move work out of secondary care?' wondered Professor Bosanquet.

Mr Dickson agreed that 'incentives where secondary care receives cash to get more people into hospitals have to be addressed if we are to get care into the community'.

After all, NHS Alliance chairman Dr Michael Dixon said, good primary care can prevent people needing hospital services in the first place.

As hospitals and primary care compete to avoid the cuts, so will managers and clinicians. Some clinicians and the BMA have suggested cutting some of the NHS's 39,913 managers, whose number rose more than 10 per cent between 2008 and 2009.

But NHS Confederation chief executive Steve Barnett said it was 'ridiculous' to think 'taking an axe to the NHS managers' would solve any problems. 'This facile debate around reducing layers of essential management has just got to stop,' he said.

Mr Barnett faced comments from one angry delegate that 'local managers are rubbish' and later, speakers were accused of 'playing God to make more profits' by a furious nurse - perhaps the first signs of passions flaring up amid the threat of cuts.

Health minister Mike O'Brien repeated Lord Darzi's mantra about quality, and advocated telemedicine use. But his speech did not really address difficulties beyond the general election - perhaps fittingly, given Labour's position in the polls. The shadow Conservative health secretary may have been a more interesting choice of speaker.

Developing primary care
Mr O'Brien was asked why the UK still has such high patient to GP ratio, despite plans to move services into primary care. There was 'a need for debate' on how much primary care is developed, said Mr O'Brien, claiming the best situation was never static.

Only Barbara Young, chief executive of the Care Quality Commission, addressed the issue of working with a Conservative government, albeit after Mr O'Brien had been whisked away by his aides.

'No one has plunged into the fluidity of the political situation ... the minister did not seem to talk about what he would do after the election,' she said.

She pondered the role of PCTs under the Conservatives' radical plans to force commissioning responsibility on GPs.

'If GPs are doing all the commissioning, then reducing local authorities and PCTs into one commissioning organisation seems to be the only thing that makes sense,' she suggested.

Although Mr O'Brien failed to spell out his vision for the future, an ex-minister drew uncomfortable conclusions.

Lord Warner, health minister until 2006, said ministers may have rejected job cuts proposed in the recent McKinsey report, but 'pay, pensions and numbers will be an issue'. Since pay makes up 43 per cent of the NHS budget, he may have a point.

Lord Warner predicted NICE's cost-benefit approach would be expanded across a wide range of areas in the NHS in the hunt for efficiency. He urged PCTs to stop propping up inefficient acute services.

But given the huge role of general practice in keeping the NHS floodgates shut, surprisingly little time was spent discussing it. Dr Dixon told the conference: 'General practice can save the NHS.' His comments may have fallen on deaf ears.

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