Radical changes to mental health services needed to cut costs and improve patient care, says new report

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A call to reduce the unnecessary use of hospital beds for patients with mental health problems who could be cared for in the community is among the recommendations in a new report, Mental health and the productivity challenge: improving quality and value for money, published today by The King's Fund and the Centre for Mental Health.

The report, published ahead of a cross-government mental health strategy due to be launched shortly, argues for radical changes in the delivery of mental health services to improve patient care and increase productivity. Its central recommendations include:

  • A reduction in unnecessary bed use in hospitals and psychiatric units by providing better community-based services - the report estimates this could save up to £200 million a year.
  • A significant reduction in the number of patients placed in facilities outside their local area - evidence suggests a reduction of up to 50 per cent could be achieved, which would save £65 million a year. (1)
  • Improvements in services for older people and those with long-term conditions who also have mental health problems - for example, reducing delays in hospital discharges for patients with dementia could save more than £300 million a year.

With the NHS committed to finding up to £20 billion in productivity improvements, and mental health accounting for around 10 per cent of the health budget, the report says that mental health services must play a key role in the drive to improve productivity. (2) Crucially, it argues that there is a significant opportunity to deliver efficiency savings and improve care for patients by re-designing services.

The report calls for radical changes to mental health services with the emphasis on strengthening community-based support and improving assessment processes to ensure that patients are provided with appropriate and effective care from the outset. It also highlights how closer working between mental health specialists and other health professionals could help reduce costs in primary care, hospitals and other public services. Other recommendations in the report include:

  • Reforming secure services - which currently account for nearly £1 billion in expenditure – by reducing unnecessary admissions and improving discharge arrangements.
  • Increasing the productivity of the workforce by, for example, improving the management of nursing rosters and reducing sickness absence.
  • Providing effective employment support to help people with mental health problems remain in or return to the workplace.

Chris Naylor, Senior Researcher at The King's Fund and the report's lead author said:

'Mental health services must not be overlooked in the drive to improve productivity and increase quality in the NHS. This report shows that, by re-designing services, there are significant opportunities to reduce costs and reinvest the proceeds to improve the quality of patient care. The government's forthcoming mental health strategy provides an opportunity to make this happen.'

Andy Bell, Deputy Chief Executive of the Centre for Mental Health and a co-author of the report said:

'Improving support for people with mental health problems represents good value for taxpayers' money. By intervening earlier and more effectively when people become unwell, and by focusing on supporting people to lead the lives they want for themselves we can also deliver good value for public funds. Mental health services can do their bit to make the NHS more productive, but should not be singled out for cuts to valued and valuable activities.'

The report is the latest in a series of outputs published by The King's Fund as part of its Quality in a Cold Climate programme which aims to support the NHS in improving productivity. (3)

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Notes to editors

(1) Up to 10,000 people are currently placed in psychiatric hospitals and secure units outside their local area. This is expensive - the average cost of an out of area treatment (OAT) is £34,000 a year - and often inappropriate as patients are separated from their families, carers and other forms of support. Research suggests that in some areas, around 50 per cent of OATs are clinically unjustified.

(2) The Spending Review committed the NHS to delivering up to £20 billion in annual efficiency savings by 2014/15. The King's Fund has estimated that the NHS needs to find annual productivity improvements of £14 billion by 2013/14 to maintain quality and avoid significant cuts to services.

(3) Find out more about the Quality in a Cold Climate programme in our projects section.

For further information, please contact The King's Fund's press and public affairs office on 020 7307 2585. Out of hours, please ring 07584 146 035.

Mental health and the productivity challenge: Improving quality and value for money is published today by The King's Fund and Centre for Mental Health.

The findings of the report are supported by the Royal College of Psychiatrists and the NHS Confederation Mental Health Network.

The King's Fund is a charity that seeks to understand how the health system in England can be improved. Using that insight, we help to shape policy, transform services and bring about behaviour change. Our work includes research, analysis, leadership development and service improvement. We also offer a wide range of resources to help everyone working in health to share knowledge, learning and ideas.

The Centre for Mental Health is an independent charity that aims to help to create a society in which people with mental health problems enjoy equal chances in life to those without. We believe that people with mental health problems should not experience unfair barriers to a fulfilling life. We aim to find practical and effective ways of overcoming those barriers so that people with mental health problems can make their own lives better with good quality support from the services they need to achieve their aspirations.