More for less

Faced with a gap in funding at the same time as growing
demand, can the NHS survive – let alone pr

The prospect for our health-care system over the next decade is considerably more daunting than the challenge of the past one. Work undertaken by the King's Fund, in association with the Institute for Fiscal Studies, suggests that whichever political party is in charge after the next election - and therefore after the current, generous comprehensive spending review period expires in 2011 - will have
a hard time finding resources to meet the growing demands on the NHS.

Rising expectations, new technology and changing demographics require even greater increases just to stand still -demography alone could cost the NHS in England between £1bn and £1.4bn a year between now and 2017. The King's Fund report found that, in a less optimistic scenario, the gap between what the system needs and what it will get could be £20bn-£30bn, or 30 per cent of the budget. Even the most optimistic scenario suggests that productivity would need to increase by roughly 3.4 per cent a year for six years to compensate for the gap in funding.

The challenges are relatively easy to express, if not to meet - how to retain and enhance equity; how to deliver continued improvement in quality and capacity; how to keep up with and, in time, exceed the performance of other systems in developed nations; and to do all this within constrained growth that, of itself, will not be enough to meet the rise in demand.

Despite the challenges, there are some reasons to be cheerful. Never before has there been such a level of commitment to equity and to the founding principles of the NHS from all the major parties. In particular, the Conservatives have shifted their position significantly, with David Cameron giving unequivocal support for a tax-funded, universal and "free at the point of delivery" NHS.

So, for at least the next five years, while there may be debate again about whether and how well the NHS is working, the fundamentals seem certain to remain in place. There is a shared belief that quality must be the principal focus from now on - that is the legacy of Lord Darzi's review, which signalled a government shift from increasing the quantity to improving the quality of care. Again, it is a vision shared across the NHS and the political divide.

A long way to go

There is also agreement that the NHS can aspire to, and exceed, the performance of other health-care systems, from Tony Blair's promise to reach the EU average in funding to the willingness of parts of the service to benchmark their performance against others. There is a long way to go, but other countries are taking notice of what England has achieved. For example, Australia is interested in our falling death rates from heart disease; in France there is interest in our model of general practice; and in the US there is growing support for the way we assess and approve new technologies through the National Institute for Health and Clinical Excellence (NICE).

However, let us be in no doubt about the scale of what is needed if the system is to prosper and survive. Unless the NHS is able to deliver big increases in productivity, the gap in funding may entail major cuts in services, a reduction in services offered by the NHS, or longer waiting times, and most likely a combination of all three.

Behind this lies a plethora of significant changes to the context in which health care is delivered. First among these is the management of long-term conditions, which presents both the greatest challenge and the greatest opportunity. The oft-quoted figure is of 17 million people
in the UK who suffer from chronic disease, and we know we are not good at keeping them healthy and avoiding crises that result in expensive hospital admissions and much misery. Yet we also know that better management can reduce health-care costs or lower the use of health-care services.

Linked to this, the number of people over 85 is about to increase by two-thirds. This will have a big effect on demand, with extended life bringing not only more healthy years, but more unhealthy ones as well. The health and social care systems in particular will have to cope with growing numbers of people with dementia.

So, if the system is required to do more for less, how will this be achieved? First, we need to be clear what the service is for. In the past few years, the Department of Health has promoted the idea of "adding life to years and years to life". It may be somewhat trite, but it's not a bad summary of what the NHS should be about.

Second, there is a need for greater clarity about the organising principles behind reform that will drive increased perfor­mance - a clear and consistent statement setting out where competition, contestability and co-operation fit in the system and with each other, and how professional pride, benchmarking performance and regulation will play their parts.

Third, we know that establishing an ethos around quality and outcomes will be essential - the hard bit is in the implementation. There are moves to develop clinical leadership and to give senior doctors in particular budgetary responsibility over the services they manage. The debate will be about the speed and depth of this.

Besides this, government must decide what is locally determined and what is a matter for national standards. Everyone in the system knows that there are unexplained and unacceptable variations in the quality and quantity of what is offered around the country. There is a need to define where variation is acceptable and where it is not.

The road to reform

Above all, the NHS needs to use commissioning and incentives to drive out unneeded costs, redesign pathways and change the shape of the services it offers. This will involve embracing technology, in the form of new medical equipment as well as information technology. We will also have to develop tele-health and other means of supporting patients to manage their own care. It will entail a step change in the so-called prevention agenda - more screening and developing new relationships with patients. This has to be a service that does more than treat you when you are ill; increasingly it must aspire to keep you as healthy and independent as possible.

In the past, faced with a downturn, the NHS has resorted to policies best described as slash and burn. But we know more now, and if we can get the incentives better aligned, the slowdown in funding growth could be a spur for fundamental reform, instead of cause for despair.
Niall Dickson is chief executive of the King's Fund