Health summit outlines four key challenges for NHS ahead of lower growth in funding

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The NHS must improve productivity, reduce variations in performance, routinely measure health outcomes and introduce more sophisticated incentive systems if it is cope with lower growth in funding over the next five years.

These are four of the biggest challenges facing the NHS, according to a high-level summit held at Leeds Castle in Kent and organised by The King's Fund. It was attended by senior officials, NHS managers, health economists, doctors and leading policy analysts.

Experts at the summit discussed the implications for the health service of a slow down in funding - widely expected next year - at a time when the NHS is facing financial problems and charged with making a success of reforms to make improvements in performance.

The next comprehensive spending review in 2007 is likely to announce real increases of between 3.0 to 4.4 per cent per year for the NHS up to 2011/12. Although this is around half the annual amount the NHS has received every year since 2000, spending on health care will have reached nearly 10 per cent of GDP by 2008. This is up to the European average spend on health care.

Improving productivity was identified as a key task for the NHS. And evidence discussed at the summit suggested that substantial improvements could be made if healthcare organisations seriously tackled longstanding and unexplained variations in hospital and clinical performance across the country.

The King's Fund chief executive Niall Dickson said:

'Everyone accepts that the current levels of growth funding for the NHS will not be sustained beyond 2008, but that should not be a cause for panic. Providing that the government is prepared to continue to provide extra investment and that health organisations have time to plan for lower growth, there is no reason why the health service should not deliver more and better services in the years ahead.

'But the challenge will be considerable and the message from this summit is that after putting the service on a sound financial footing the focus must be on improving productivity, tackling variations in performance and getting the right incentives for both staff and institutions.

'It will also mean that local organisations develop a much greater understanding of the different needs of individual patients and for some organisations that will demand a very different approach to delivery.'

The summit said the NHS should start as soon as possible to measure the impact of its services on the health of patients. This was seen as essential to provide the information to help improve performance and productivity, make a reality of patient choice, and to give primary care trusts and GP practices the data they need to improve the purchase of care.

Ensuring that the NHS and its staff were given incentives to innovate and improve performance was also essential. But the summit agreed more work was required to understand what motivates organisations and in particular staff. Financial incentives, such as Payment by Results, will play a part but there was a pressing need to investigate other non-financial motivational factors.

Notes to editors

  1. For further information or interviews, please contact the King's Fund media and public relations office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.
  2. The summit, Funding UK health care: 2008 and beyond, was held at Leeds Castle on 23 and 24 April 2006. A full report of the summit will published this autumn.
  3. The following people took part in the summit:
    • Professor John Appleby, Chief Economist, King's Fund
    • Dr Will Cavendish, Director of Strategy, Department of Health
    • Robert Chote, Director, The Institute for Fiscal Studies
    • Richard Douglas, Director of Finance and Investment, Department of Health
    • Mike Farrar, Chief Executive, West Yorkshire Strategic Health Authority
    • Andy McKeon, Managing Director of Health, Audit Commission
    • Professor Alan Maynard, Professor of Health Economics, The University of York
    • Sir Roger Bannister, Leeds Castle Foundation Trustee
    • Dame Carol Black, President, Royal College of Physicians
    • Professor Nick Bosanquet, Honorary Fellow, Imperial College of Science, Technology and Medicine
    • Sir Cyril Chantler, Chairman, King's Fund
    • Anita Charlesworth, Director, Public Services, HM Treasury
    • Caroline Clarke, Finance Director, Homerton University Hospital Trust
    • Baroness Cumberlege, King’s Fund
    • Niall Dickson, Chief Executive, King's Fund
    • Dr Jennifer Dixon, Director of Policy, King's Fund
    • Professor Nancy Devlin, Professor of Health Economics, City University
    • Nigel Edwards, Director of Policy, NHS Confederation
    • Dr Julien Forder, Project Lead for the Wanless Social Care Review, and Deputy Director, PSSRU, London School of Economics
    • Jeremy Hurst, Senior Health Economist, Health Division, Organisation for Economic Co-operation and Development
    • Professor Julian Le Grand, Richard Titmuss Professor of Social Policy, London School of Economics
    • Professor Carol Propper, Director, CMPO, University of Bristol
    • Jonathan Slater, Director of Health, Prime Minister’s Delivery Unit
    • Simon Stevens, President, United Health Group
    • Alison Tonge, Director of Finance and Estates, Stockport PCT.
  4. The Leeds Castle Foundation is a charitable trust, set up in 1974 after the death of Lady Baillie. The Foundation maintains the property as a 'living castle' for visitors to enjoy but also hosts summits and conferences. We are grateful to Sir Roger Bannister CBE, the trustee responsible for medical conferences, for inviting the King's Fund to hold this summit (
  5. The King's Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.