The NHS must focus on better value in 2016 to deliver the £22 billion productivity challenge

With the outcome of the Spending Review now known, the biggest challenge for the NHS in 2016 is to redouble efforts to deliver the £22 billion of productivity improvements it is expected to realise by 2020/21.

Our work at The King’s Fund has argued that better value is the most promising way of realising the eye-watering productivity improvements required under the NHS five year forward view. This requires a commitment to building capabilities for quality improvement throughout the NHS. It also requires deep engagement by clinical staff to deliver better outcomes at lower cost by tackling well-known variations in clinical care.

In some cases changes in clinical care are needed in individual organisations, for example to reduce length of stay or improve the efficiency of operating theatres. In other cases, changes are needed in how services are provided across organisational and service boundaries, for example in delivering more co-ordinated care for older people to reduce delayed transfers.

Both kinds of change depend on the use of a tried and tested quality improvement method as observed in high-performing health care organisations. They also require the collection and reporting of data on variations in care to enable leaders in the NHS to understand their performance and identify areas for improvement.

Leadership of improvement work and organisational cultures that focus on better value are the other essential ingredients of successful change programmes. A sustained and systematic investment in leadership development and culture change is therefore a prerequisite in every organisation if the NHS is to bring about the changes in clinical care that are needed.

The NHS has previous experience of trying to deliver better value through improvement collaboratives run by the NHS Modernisation Agency and John Oldham’s work on primary care access and quality. One of the lessons from this experience is the importance of building improvement capabilities in the organisations providing care. Mayo Clinic in the United States does this by training its staff in quality improvement methods and it also employs system engineers (350 in total) on a scale that can only be dreamt of by leaders in the United Kingdom.

To bring about changes in how services are provided across organisational and service boundaries, NHS organisations need to collaborate in place-based systems of care, underpinned by appropriate governance arrangements and system leadership. Building improvement capabilities in these systems will help deliver more co-ordinated care by reducing hand-offs and delays in care transitions. This in turn will improve outcomes for patients and cut waste, contributing to the £22 billion challenge.

NHS organisations need support from NHS England and NHS Improvement if they are to work in place-based systems and deliver operational efficiencies at scale. National bodies need to operate in a much more joined-up way while also offering expertise in how to deliver better value that providers may lack. In so doing they need to learn from the experience of the NHS Modernisation Agency whose good work was undermined when it grew too quickly and took scarce expertise away from the organisations providing care.

One of the difficulties in acting on these ideas is that work on quality improvement does not lend itself to the kind of big bold interventions beloved of politicians. Rather, improvements in care occur through many small changes which over time help to deliver better outcomes and reduce variations and waste. They also occur through the actions of staff throughout the NHS working within a system committed to improvement and learning.

A good starting point would be for the NHS to develop a strategy for improving quality of care and building capabilities for improvement. This would help leaders at a local level to focus on delivering improvements in operational efficiency and breaking down barriers between organisations and services. A strategy for quality improvement needs to be realistic about the time it takes to bring about change as well as the investment in capabilities required. There really is no quick fix.

Our New Year’s resolution at the Fund is to use our resources to help turn these aspirations into practice. We call on national leaders to do the same at a time when the NHS needs to put better value at the heart of its efforts to deliver the £22 billion productivity challenge. Health secretary Jeremy Hunt has seen this at first hand in the transformation in quality that has occurred at the Virginia Mason Medical Centre, and supporting the NHS to do the same could be his most important legacy.

Keep up to date

Subscribe to our email newsletters and follow @TheKingsFund on Twitter to see our latest news and content.


#545295 Sean Ellis

There is indeed no quick fix for the £22bn "productivity challenge", or "cut" as it's more clearly described. Except, perhaps, for the government to commit to a properly funded, publicly owned NHS. If you're after efficiency savings, then the first thing to go should be the wasteful and unnecessary internal market system and costly procurement processes for private providers.

#545297 Simon Bolton
Regional Organiser

The real problem for the NHS is that no one believes except when they have to say it because of the job they do that this is anything other than a £22bn cut. Simple repetition is not going to make it happen , the truth is that since it's inception the NHS has not been properly funded and it is truly remarkable that it has done so much with so little which is down to the staff at all levels.

The problem for the current government like the last one is that they don't really believe in the NHS and the public understand that , the staff at all levels certainly do. NHS management can call it what they will but it amounts to a £22bn cut which cannot be achieved but which will be pursued because it is politically expedient to do so , the long term aim of course is a fully privatised service providing profits for corporations and as a side line some healthcare for those who can afford it.

#545298 Mark Redhead
FFF Best Possible Value programme

Thanks for this blog on value and QI Chris. Can I also signpost readers to the future-focused finance resources on "best possible value" which could be helpful? - The work is sponsored by the DH, 4 ALBs and the HFMA, and the tools can be used by anyone working in the NHS. Perhaps we could usefully explore how we might bring the FFF resources and those of the King's Fund together?

#545299 Russell Muirhead
General Practice

How does anyone expect commitment to improvement when frontline staff are on their knees - the phrase 'the beatings will continue until morale improves' springs to mind.
Maslow would say that the NHS requires 'self actualised' staff when I see many people struggling with even basic physiological needs - until the powers that be accept this reality the £22bn will remain a pipe dream

#545301 Stephen Smith
Retired Medical Research Fellow

There is the issue of total cost in a rising population and whether people can continue to meet the bill via taxation. It is assumed not but is this true? The public aren't asked while discussions about alternative solutions proceed in the House of Lords and elsewhere. Another aspect is the unnecessary demand on the NHS through unhealthy life styles ie the responsibility of the public in the provision equation. In the above blog I picked up the idea of training both for safety and efficiency but using commercial sources as an example. I think the fragmentation of the NHS by commercial dictates would be hard to reverse and the percentage of the population who want 'a nationalised public NHS' is still unknown. The worry is the huge percentage that know nothing about what is going on. I've always thought that the privatisation of the NHS is beyond the mandate of a single party and that the public should be made fully aware of what is involved and what is at stake. Could we begin with taxation and find out whether a public NHS could be maintained on this basis and what sort of NHS this would be ?

#545611 Terry

Oh Chris your words are so true but so repetitive.
I should quickly say that I am not blaming you or the Trust but the public have got so fed up of the same old comments (as true as they may be) with no real change where it matters - and that often rests with even the most basic of care in some hospitals.
It is a total embarrassment that the NHS does not have enough managers and leaders worthy of their title and salary - importantly that the system allows them to remain.
Equally the ineffectiveness of the role of Governors - something that your Trust needs to research deeply into.
Sharpen your teeth Chris - few that matter seem to be listening.......Those that may, simply 'have another meeting'.........make this 'your' new years resolution.

#545626 Bernard Kat
Health and Clinical Psychologist

There is sense in what you say, Chris, but I am puzzled to whom you are saying it. The idea of saving £22 billion has no meaning to the individual practitioner. It probably does not have a lot of meaning to an individual Trust or practice. Each person or organisation may be able to contribute a small increase in value but they have to rely on very distant people and systems to tell them whether their efforts have made any difference. Those same distant people have implemented an idiotically wasteful internal market and seem to be at war with a substantial proportion of health and social care staff, so the credibility of their opinions is in doubt. And they don't seem to understand what all practitioners know in their hearts, that people who are happy doing jobs they want to do are the most healthy and productive employees. The situation is retrievable but do you not think that the changes for which you are looking need to start at the very top?


1/ All the modern idea's about improving and saving money in the NHS will not improve anything
unless communication is improved
2/ Team work and the lack of fear in the NHS would help
3/ making the NATION


making the nation pay towards NHS services is not good ---so making the NHS the preserve of the wealthy
as part of GDP we pay the least into our health service than most developed countries
Team work and better comms are the long term answer to ease the pressure on NHS not new techs


My follow on to previous email comment =follows
To suggest the nation pays for certain services is totally out of order
leaves the the door open to a NHS as a preserve for the wealthy
pointing out that most of NHS patients are registered north of LONDON and will suffer because of paying for a service now free to all
on average lower incomes who will suffer


INTERESTING -like you i totally agree with the long term move is towards private health
Can i point out that private health care is already in our midst
Unless Simon Stevens and politicians have the guts to break down a disastrous culture of complacent middle class power over the running and change in the NHS needs
there is no likelyhood of the NHS surviving


Terry i so much agree with your comments ---but like i and others have said time and time again ,
Unless those who use or work in the health service protest vigorously by that i mean write to there MP'S or elected reps northing will be done
because even it seems Chris himself seems to only talk and listen to politicians
fact that from Chris Ham seems to support more cutbacks where no more can be done ,
Please note that the present gov if allowed will oversee the demise of the NHS
by holding back deserved pay rises for staff in the NHS especially doctors and nurses it makes transfer to the private sectre pay much easier
remember when the EBOLA scare was in progress it was mainly staff from the NHS who entered the fray

Add new comment