Delivering better value in the NHS

2014/15 looks like being a watershed year in which the NHS moves decisively into deficit. Although the political parties have begun to debate the level of funding that will be needed, it is not clear by how much the NHS budget will increase. The impact of continuing financial constraints on patient care is also uncertain.

What is obvious is that the NHS is currently run on the basis that money follows targets. The government’s very public commitments on access have resulted in money being channelled to these areas – for example, the additional funding provided in 2014/15 to help hard-pressed providers deal with lengthening waiting times for elective care and treatment in A&E.

Services lacking high-profile targets – like mental health and primary care – have not benefited in the same way, and there is growing evidence that patient care is suffering.

It follows that new areas of political priority, such as safe staffing levels and seven-day working, may also attract additional funding to enable aspirations to be turned into practice. The difficulty this presents is that with around two-thirds of hospitals’ budgets going on staff, the costs of these commitments is likely to be considerable. If the next government does not provide sufficient additional funding, it may not be possible to deliver on them.

Future funding levels will also determine whether NHS providers will be able to maintain current staffing levels, which in many cases have grown as a result of the Francis effect. Providers will be understandably reluctant to put safety at risk but, faced with the challenge of balancing budgets when workloads and deficits are both growing, they may not feel they have a choice. Much will depend on how regulators weigh these risks in their dealings with providers.

Much will also depend on the ability of NHS providers to extract further improvements in productivity to bridge the £30 billion funding gap identified by NHS England. The Fund’s analysis shows that the Nicholson challenge has been delivered mainly though controls over pay and prices and cuts in management costs.

Looking ahead, the main opportunities lie in reducing variations in clinical practice by tackling inappropriate use of services and inefficiencies in the delivery of care. There are also opportunities to reduce harm to patients and the waste involved in not providing care right the first time.

It will be much harder to realise these opportunities than it was to deliver the Nicholson challenge because it requires staff throughout the NHS to be engaged in improving productivity rather than relying on national leaders to exercise crude controls over pay and prices. And as our work on high-performing organisations has shown, engaging staff in quality improvement takes time, and often exceptional leadership, to deliver results.

Given the state of the public finances, it is unlikely that the next government will find all the resources needed to fill the funding gap. We are therefore starting a new project to illustrate the scale of the opportunities available to the NHS and to highlight examples of improvements in care that have delivered better value.

The project, reporting in early 2015, will illustrate how extra investment needs to be linked to continuing innovation in how clinical services are delivered if the NHS is to deliver financial balance and maintain acceptable standards of patient care. We would welcome contributions and suggestions on ways of delivering better value in the NHS as well as ideas on how the current barriers to innovation might be removed.

• See our priorities for the next government
• Read our reports: Reforming the NHS from within and The NHS productivity challenge