How will the NHS really save money?

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This week's Institute for Fiscal Studies' report drew attention to the main political parties' manifestos and plans but contained less information about how they would balance public finances. So what details do we know about how they plan to balance health care finances?

My colleague John Appleby's blog last week highlighted that the three main parties are all planning to fund the NHS at more or less current levels with little, if any, of the growth enjoyed over the last decade. But with rising demand from an aging population and new medical technologies driving up costs for the NHS what plans do they have for savings to constrain expenditure at current levels?

Labour say they 'will be tougher in ensuring value for money' and will 'deliver up to £20 billon of efficiencies', but other than a promise to scale down the Connecting for health IT programme and 'cutting red tape' they are silent on how this is to be achieved.

The Tories target 'expensive layers of bureaucracy' and plan to cut the cost of NHS administration by a third, but give no details of savings beyond this.

Helping the 'NHS work better with the money it has' by using the savings it has found to protect frontline services is a key focus for the Lib Dems. They are more specific than the other parties about where these savings will come from, including: cutting the size of the Department of Health by half; abolishing or slashing the budgets of health quangos; scraping strategic health authorities and limiting the pay of top NHS managers. They also refer to extending best practice on improving hospital discharge, maximising the number of day-case operations and reducing delays prior to operations.

What none of the three parties say is that a prime opportunity to improve NHS efficiency will come not from cutting the waste of managerial overheads but in reducing the waste from the variation in frontline clinical and operational practice.

Jack Wennberg at Dartmouth medical college said US patterns of healthcare practice were 'often idiosyncratic and unscientific, with local medical opinion and local supply of resources more important in determining how medical care is delivered'. The NHS Institute's Better care, better value indicators reveal very large, unjustified differences in practice across this country, including: length of hospital stay; referral rates; admission rates; prescribing practice and others, suggesting the same is true on this side of the Atlantic. The indicators also show that waste resulting from these areas alone amounts to billions of pounds each year.

The key to unlocking NHS efficiencies and therefore living with constrained resources is influencing the practice of frontline clinicians as they take decisions on a daily basis about patient care. It is at the frontline where the majority of NHS resources are committed and so the NHS leaders and managers' ability to engage frontline clinical staff in reducing variability in practice and improving care quality and efficiency is critical. Ironic then, considering this role, that all the parties see reducing NHS management as a priority.


steve black

Comment date
30 April 2010
Like Mark I find it amazing that the politicians have focussed on the easy target--managers--rather than the one thing that might deliver a better NHS without bankrupting the treasury.

The NHS is the most undermanaged large organisation on the planet, but, because managers are regarded by the popular press and much of the public as being synonymous with blood-sucking bureaucrats, they become a focus for cuts.

Moreover, the BCBV indicators are probably only the tip of the iceberg. A thorough analysis of NHS activity across the UK might reveal as much variation as Wennberg's work revealed in the USA. Unfortunately nobody in the UK has yet thought it worthwhile to do the analysis for the NHS with the same level of rigour.

C Nuttall

Comment date
05 May 2010
Good management is absolutely necessary, of course, but the managers have to be able to do their jobs without being burdened by the vast number of regulatory bodies monitoring the NHS, which have grown so much and in such a seemingly disorganised manner that it feels as though the information which we have to provide for them is, to a large extent, duplicated. Working in audit currently feels like fighting through a bramble thicket. Health quangos require a fierce pruning to rationalise what has become a top-heavy burden on managers who cannot do their jobs properly because of the constant pressure to provide evidence of compliance.

Mary E Hoult

Comment date
05 May 2010
The NHS could really save money by making the 827 identified leadership candidates responsible for Lessons Learned. Every time these comments are used the people resonsible should be made to record and number the key issues. It should then be the responsibility of these key players to ensure lessons are learned and systems improved. The lessons learned comments are greatly abused by a lot of the key people using them and serious situations are repeated again and again. Litigation etc could be reduce if this system were introduced.


Comment date
13 May 2010
Informative article. However, it didn't make clear why variation equals waste. Can someone explain a little more please? Thanks in advance.

Sara Lou

Health Care Assistant,
Comment date
04 October 2011
You cannot simply promote someone as a ward manager because they have several yeasrs service as nurse or sister. As is the cc ase with the NHS. Remove the useless ward managers and replace each division with a manager.

Kim Tuffin

Security consultant,
Comment date
10 October 2014
Bringing in a presumed consent law for organ transplants would save a huge amount of money each year. Dialysis cost approx £200 a session and the average waiting time for a kidney is five years. Think of the savings and lives that could be saved .


Comment date
28 January 2015
What is stopping the NHS becoming a suplier/manufacturer of phramaceuticals/drugs (generic) rather than relying on businesses than supply these to the NHS at a huge mark-up? I read an article yesterday about a brother and sister who set-up a generic drugs supply business in 2008 (which they have just sold) and is making £40million a year profit. If they can do why can't an organisation the size of the NHS does this and save millions by cutting out the middleman?

ian Campbell

Comment date
05 July 2018

I am concerned that the only catheters supplied are latex (allergic to them) and silicone (cause frequent infections). catheters are changed every 2 months. Expected to deal with frequent infections by antibiotics and high dose painkillers within the period. Antibiotics no longer effective for me because of over use. I was fitted with a silver coated one from USA which was great and never got infected but no longer imported. I am willing to import them myself but local Health Centre won't fit them. Only if I really fuss is the catheter changed before 2 months is up. I live in Wales. I am fearful catheter users are heading for premature deaths.

My son, living in England has had his diabetic pump removed with which he has successfully managed his diabetes. Why? it worked.

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