There were no dissenters from the view at last week’s Cambridge Health Network meeting that London has chronic overcapacity in its acute hospitals. It’s been the case for decades. One reason for the continuing failure to reform lies in the story of one woman that all three local candidates in her constituency in the last election had campaigned for the reopening of a local district general hospital. But it now looks as if economic problems may “solve” what policy makers have failed to achieve: more money can allow muddling on in the same old way, but less money forces change.

Although it “went underground” after the election, Ara Darzi’s plan, Healthcare for London, has continued to drive the thinking of NHS London (itself soon to disappear). One of the principles of Darzi’s review was “Localise where possible, centralise where necessary.” There have been successes with the second principal, particularly with stroke care being concentrated into eight hyperacute units. In a few years London has gone from having patchy to world class stroke care. Major trauma and cardiovascular services have also been concentrated, but there is much left to do with cancer, orthopaedic, dementia, and other services.

The quality and safety of remaining acute services has, however, to improve. We know that people admitted to hospital at weekends have a 16% greater chance of dying than those admitted during the week, and this is no longer acceptable. Hospitals will have to find a way to provide consultant delivered care seven days a week– “7/7 care” in the jargon. If they can’t, their future will be uncertain. Indeed, hospitals may have to move to “24/7” care– a consultant led service every hour of the year.

Are there hospitals in London that are dangerous, I asked. I asked because a young doctor, a first year specialist registrar, had told me a story of being on call over Christmas in a London hospital and being in charge for three days with no consultant coming in. All the monitoring and quality data we have shows that London does better than most of the country, and so we don’t have a Mid Staffs in London, was the answer–but there are hospitals that are not offering the highest standards of safety 24 hours a day seven days a week.

Development of local services has been much less successful than the centralising of some services. GPs were turned off by talk of policlinics, and, as one manager said, improvements that don’t have the buy in of clinicians do not succeed. But now, said another manager, GPs are beginning to challenge each other and clinical commissioning groups are developing at a “fantastic speed.”

NHS London has conducted an audit of the financial viability of acute hospitals in London called SAFE (Sustainable and Financially Effective). The stark conclusion is that even after a productivity improvement of 18-20% only six of 18 trusts yet to become foundations trusts will be viable. Furthermore, the traditional business model of “doing more and being paid more” will not continue to work because the money is not there.

The mood of the meeting seemed to be that financial difficulties would drive necessary change in a way that deficiencies in quality and safety would not because the public continues to believe that their local hospital is as good as any other—despite strong evidence to the contrary. But despite the financial constraints on the health service “so far, so good,”  said one chief executive of an acute trust. Hospitals in London have made productivity gains, and national pay restraint has been “a big part of it.”

The big challenges, he said, are still in the future. How can London design services for tomorrow? Where will further productivity gains come from? What should the public debate on healthcare be about? (Several speakers regretted that it continues to be about hospitals.) Should we redefine underperformance? Will there be demonstrable improvements in quality and safety? What should we be doing less of, not just clinically but in management and policy terms as well? Finally, where will we find money in the future to renew hospitals, many of which are already outdated?

One potential advantage that the NHS has in London is that it owns something like £4bn in underused real estate that could be sold and the money reinvested. “Why,” asked one speaker, “can’t this property be sold and the money reinvested in primary care?” The answer seemed to be confusion over who owns the property, professional and public resistance, and a “difficult legislative framework.”

As I reflected on the meeting, I realised that one way to think about health care in London is to recognise that were we to start with a blank sheet we would design a health system very different from the one we have—with far fewer hospitals and much more emphasis on primary, community, social, and self care. The problem is to move from a system built up over centuries in response to very different health problems. And a question that recurred at the meeting was “Who, when NHS London disappears, will take a long term, strategic view across the whole of the health system in London?”

Nobody had a definitive answer, but academic health centres will clearly be prominent and collaboration will be needed. The meeting might have had a desperate feel but the predominant mood seemed to be that that economic challenges will provide the impetus to reform health care in London and make it better than now.

• The Cambridge Health Network provides an informal meeting place for NHS managers and clinicians, voluntary bodies, the private sector, and academia. Chatham House rules apply at all meetings, which is why people are not named in this blog.