The King’s Fund’s new analysis of serious and growing financial pressures in the NHS should serve as a wake up call to politicians of all parties. As the analysis shows, with an increasing number of providers in deficit, and the prospect of a further seven years of no growth in funding, the NHS is rapidly approaching a major crisis.
The arrival of this crisis has been accelerated by the transfer of almost £2 billion into the Better Care Fund in 2015/16. The purpose of the Fund—to support moves to integrate health and social care—is well intentioned. If it is used to support the kind of interventions we summarised in our recent evidence based guide, it should deliver benefits to the NHS as well as to social care. However, it will put additional stress on an NHS already struggling to balance the books and maintain acceptable standards of patient care. Acute hospitals will be particularly affected by the requirement to find even higher levels of efficiency savings than they have achieved to date.
The ability to deliver these savings depends in part on investing in services in the community to reduce demand for hospital care. This may make it possible to release resources from hospitals if and when more care is delivered by GPs, community nurses, and staff who support patients in their own homes. The difficulty is that, under the government’s plans, all of this has to be done in time for plans and budgets to be agreed for 2015/16. This is completely unrealistic.
What then needs to be done to avoid more providers getting into deficit and patients suffering from the consequences? Our view is that the government should create a transformation fund over and above existing funding for the NHS and, indeed, for social care. The purpose of this fund would be to pay for the new services that are needed to bring about the transformation in how and where care is provided, which we and others have advocated. Every health economy will need access to the fund, and its use should be conditional on demonstrating that the investments it supports will release cash from existing services. Temporary emergency support for otherwise sound providers in financial difficulty will also be required.
A critical difference between this fund and the Better Care Fund would be a requirement that NHS providers, particularly acute providers, are closely involved in developing plans for its use, alongside clinical commissioning groups and local authority partners. A further difference would be the expectation that the cash releasing plans would be underpinned by credible and accurate modelling of demand and cost, to which all relevant commissioners and providers are signed up. This will be a real test of capabilities across the NHS, but it is essential to give confidence that these plans can be implemented.
Finding extra money in the current financial climate is a big ask, especially as further cuts in public expenditure will be needed, whoever forms the next government. This is why all the political parties must enter into a public debate about the long term sustainability of the NHS before, and not after, the general election.
“Don’t waste a good crisis” is a saying that has entered the health care lexicon. Now more than ever, political and NHS leaders need to see the impending crisis as an opportunity to think and act differently. They should resist the temptation to prop up outmoded services, and instead embrace the transformations of care that are long overdue—using a new fund made up of new resources offers the best hope of doing so.
Chris Ham is the chief executive of the King’s Fund.
This blog first appeared on the King’s Fund website here
Read The BMJ‘s News story: Financial crisis is inevitable in the NHS by 2015-16, King’s Fund says