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Although the coalition government has pledged to protect funding for the NHS, the pressures to meet rising demand will put a strain on spending.
Building on a previous analysis produced in association with the Institute for Fiscal Studies, this paper examines the gap between the likely available funding and the level of funding required to achieve the progress projected by Sir Derek Wanless in his 2002 report for the Treasury. It sets out: the scale of the problem; strategies for managing the cost and demand pressures; strategies for improving productivity and suggests that improving productivity offers the best option for reducing the shortfall.
Improving productivity is not a straightforward or well-understood option: it can suggest that the NHS needs to dramatically cut budgets, reduce services for patients and sack staff. In fact, this paper suggests that the overall approach is one of 'doing things right and doing the right things'; a number of strategies are outlined that will reduce production costs and improve outcomes; others will free up resources to be used more productively; others may lead to actual cash savings. This information will help health care leaders at national and local level to select the strategies which, together, produce more value from the same or similar resource – rather than the same for less.
The biggest challenge facing the NHS is to act on the knowledge of what needs to be done and to make it happen. This action is required at all levels in the system – from government to frontline teams.
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