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Richard Smith: What to do with the £20 billion promised to the NHS?

richard_smith_2014Under great political pressure and caught up in the razzmatazz surrounding the NHS’s 70th birthday, the government has promised another £20 billion to the NHS. What should be done with that money? One worry is that it will simply keep the NHS staggering on as now largely unchanged, but last week the Cambridge Health Network indulged itself with thinking what creatively could be done with the money?

Earlier this year the Institute for Public Policy Research (IPPR) reviewed the NHS over the past 10 years and produced a 10 point plan for developing the NHS, and Tom Kibasi, director of IPPR, said that the report concluded that the quality of care had been maintained and even improved but access to care had deteriorated. It also concluded, however, that a tipping point had been reached and without further funding the NHS would deteriorate. The report calculated that another £50 billion would be needed by 2030 and that a 3.5% annual increase was needed. The government has accepted the 3.5% figure.

Penny Dash, senior partner at McKinsey & Company, reviewed the boom and bust history of the NHS. In 2001 the government accepted that the NHS was under great strain and increased funding. Many, including some at the meeting, thought that the new money was not spent wisely as reform came after the infusion of money, but Dash argued that there had been gains: staff numbers grew, productivity in some areas increased, and waiting lists fell. She thought that the now unfashionable payment by results and the politically difficult independent treatment centres had been important for the improvements. Bust came again in 2009, with a renewed focus on how to continue to improve quality while also controlling expenditure.

We know, said Dash, what the opportunities are for developing the NHS, but seizing them has proved difficult. Prevention is always talked about but has struggled to deliver, and, while it could lead to significant benefits to health and life expectancy, it would be wrong, said Dash, to think that prevention leads to financial savings.

Shifting care out of hospitals is another great opportunity, and has been government policy for 10 years, though, as Kibasi pointed out, spending on hospitals over that time has increased and spending in the community fallen. He joked that maybe if government policy reversed, money would then flow out of hospitals. Improving productivity and reducing variation in productivity and quality are big opportunities, said Dash. Some hospital manage 15 cataract operations in three hours, others only five. Kaiser Permanente in the US has lengths of stay below those in the NHS: length of stay for hip replacements is measured in hours not days, and a stay longer than necessary is treated as an untoward incident.

Dash would use the new money to reform out of hospital care, encouraging GPs and others to form new organisations with clear governance structures and a commitment to manage patients out of hospital. Kibasi would also make out of hospital care a priority, and would offer all GPs a salaried position with the NHS, if they want it. He thought that many disgruntled doctor currently salaried within practices would welcome the opportunity—as perhaps would many GPs in zombie practices, those that are not financially viable.

Improving hospital productivity would be Dash’s second priority, increasing management capacity and updating payment mechanisms. Next she would make investments in technology and support NHS providers to move out of poor quality estate. Her final priority was to develop a “great narrative,” big stories that could be delivered primarily by frontline staff explaining how reforming the NHS, including making changes that might be unpopular, can lead to better services for patients.

Kibasi chose investing in technology as his first priority. He would set aside £500 million for a national competition for new technology, emphasising interoperability and use of cloud systems. He would also give money to trusts to invest in technology, requiring them to spend 5% of their income on technology, appoint a chief technology officer, and develop an in-house technology team. (Some in the audience worried that in-house teams would lead to extra cost and a proliferation of incompatible systems.) No trust, he observed, would contemplate not having a chief financial officer, but in the modern world chief technology officers are just as important. He would reform information governance, which he described as “not fit for purpose,” promote integrated data sets, and encourage full automation. He saw automation of tasks not jobs, meaning that jobs would not be replaced but rather that staff could concentrate on the human side of care.

Developing care in the community was also a priority for Kibasi, and he would build care systems not around professionals but around populations of patients with similar needs. He thought that one of the ways to avoid the flow of resources from community to hospitals would be to create integrated care trusts. There should be a transformation fund, and NHS employees should be given the right to retrain.

Next Kibasi would radically simplify the NHS. He would combine NHS England, NHS Improvement, and some parts of Public Health England into one NHS headquarters. He would abolish all clinical commissioning groups, which he believes subtract rather than add value. Commissioning is hard to do well, and while most countries have been concentrating commissioning in fewer, larger organisation the NHS has gone in the opposite direction.

The UK, said Kibasi, should become a global hub for training doctors and other health staff. In this way the NHS could be self-sufficient in providing staff by 2030, and UK PLC could generate income and export doctors and other health staff.

Social care will have to be reformed, and the IPPR proposed free personal care based on need. People react to this idea by saying it’s “obviously unaffordable,” but IPPR costs it at £9.9 billion annually, not much more than the proposals in the Tory manifesto, which were criticised for being a “dementia tax” and cost £7.7 billion annually.

The first and crucial question was how would money be removed from hospitals after so many years of failing to do so. Kibasi proposed that people will accept what are initially unpopular reforms like closing hospitals if they can “see the new thing first.” This means running the old and the new together for a while. Couldn’t that lead, feared some in the audience, to adding services because both would be quickly working at capacity?

The audience had their own ideas on how to spend the £20 billion, reflecting no doubt the debates that will go on in government, NHS England, NHS Improvement, and other powerbrokers within the NHS, culminating perhaps in the money being scattered thinly and achieving little. More navigators through the complexities of the NHS was one idea, but surely better to simplify the system rather than hire a tribe of navigators was an answer. Somebody else argued that dedicated teams had made progress with issues like introducing paramedics, managing HIV/AIDS, and reducing smoking and that the funds should be used to fund more such teams. As always, more investment in leadership was proposed, but old lags remembered hearing that refrain for years.

The meeting had the air of fantasy football with everybody being free to argue what should be done without having to worry much about the how. The meeting had the title “A fool and his money are soon parted: how far will £20 billion go?” with the implication that new funds could be frittered away. Let us hope not: there is much agreement on priorities, and what is needed is the political courage to achieve them.

Richard Smith was the editor of The BMJ until 2004.

Competing interest: RS was once employed by and has shares in UnitedHealth Group, which has contracts with the NHS. He also has equity in Patients Know Best, which has contracts with the NHS, and consults for Medial EarlySign, which hopes to sell into the NHS.