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NHS must cut services or start charging to stay afloat – CIPFA

The NHS will have to reduce the amount of services it provides or start charging patients for seeing a doctor, attending A&E, and using hospital facilities if it is to achieve the ‘optimistic’ £22bn of savings planned for 2020-21.

A briefing by CIPFA, the Chartered Institute of Public Finance and Accountancy, says it ‘seems unlikely’ that the NHS will deliver the billions of savings outlined in the Five Year Forward View unless radical measures are taken.

“It will be necessary, to underpin that agenda, either to add further to the NHS budget, charge users more, or reduce services. To choose none of those is not a realistic option,” the document said.

Increasing government funding would be the obvious solution if it didn’t affect the “trade-off between spending on the Department of Health and other departments”, CIPFA says in the briefing.

Other solutions include reducing the level of services despite “no parties [having] shown any appetite for this”.

More controversial solutions include building on the Care Act to provide a more “equitable approach” to the balance between public and government contributions to healthcare. This might involve charging patients ‘hotel costs’ in hospitals such as for overnight stays, food, water and power.

The document also suggests implementing flat rate contributions towards visits to the GP or A&E, as well as adopting the French model of paying for a proportion of treatment costs.

Chief executive of CIPFA, Rob Whiteman, said: “Without radical transformation, we will struggle to offer a high-quality public health service for future generations.

“The NHS is presently beset by a Five Year Forward View and resource assumptions that will not add up. System leadership is needed with less short-term promises and more medium-term financial planning.

“But it is not all about the need for more resources, because presently there is insufficient will to improve productivity, encouraged by the prevailing expectation and culture that more state funding will continue indefinitely.

“This is simply not sustainable and we urgently need to do away with this approach, plan for the long term and secure greater integration of health and social care services to lessen long-term spending pressures and better manage future demand.”

He added that this should be combined with an “open and honest debate” between ministers and the public about what kind of NHS people want in the next decade or two.

Other financial solutions could involve putting incentives in place to reward positive behaviour, investing presently in order to save money in the future, and planning for the long-term rather than per year.

Strengthening other parts of the public service system that also support health, such as benefits, housing, transport and leisure is also essential.

While this would clash with the recent £200m cuts to public health budgets locally, CIPFA experts warn that “the more they can be strengthened or at least maintained, and the more a one-place approach can be adopted to planning for the whole system with an eye to mutual advantage, the better”.

The institute’s public finance experts indicated that “adjustment is required to build in the cost of the new government’s health promises”, such as an increase in seven-day weeks and significant investment in prevention.

“In addition, the government should set aside invest to save funding which can be bid for in order to make the upfront investments (including covering for double running costs) which will save in the future without undermining the short-term position.

“Given that this would be ‘virtuous spending’ to future advantage, it would make sense to allow this investment to be funded by borrowing or a bespoke tax,” the briefing said.

CIPFA also claimed that the government’s plans to save £22bn by 2020-21 is ‘optimistic’ and said: “It isn’t likely that the NHS can react fast enough in the early years to achieve the productivity gains required: that £22bn implies that efficiency improves at double the historic rate, and a high proportion of the actions which might deliver such a step improvement require the sort of radical transformation which takes time.”

Whiteman reiterated that it is crucial to address these matters ahead of the upcoming spending review, stating that it will require “brave thinking” on how services are delivered and financed in the long term.

The CIPFA analysis comes just a day after Monitor’s chief executive David Bennett told foundation trusts to scrap ‘non-essential’ jobs because the current financial model was “simply unaffordable”.


MTJ1982   08/09/2015 at 15:59

One very simple way to raise funds, based on my GP practice alone is charging people who do not attend GP appointments and not allowing them another until the cost is paid. Based on the average number of wasted appointments being 100 per month, charge each missed appointment £10, that is £12,000 per annum...not much until you take into consideration the number of GP surgeries across the country to which these rules could be applied (around 8150 at last count). My rough estimate is about £97.8M earned/saved per annum in the UK, based on GPs alone...soon adds up and the benefit is three fold; the GPs have more money to spend where it is needed, more appointments become free as people stop wasting them and the overall deficit of the CCG should reduce year on year...a small price to pay for avoiding wasting resource in the NHS, which I believe is all of our responsibility if the NHS is to continue...

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