27.04.16
NHS warned of financial crisis over ‘out-of-control’ specialised care spend
Specialised services spending is out of control and poses a threat to the financial stability of the NHS, a new report warns.
Responsibility for commissioning specialised services, for treating conditions including rare cancers, cystic fibrosis and some forms of mental illness, transferred from primary care trusts, who worked together in groups to commission services, to NHS England in April 2013 under the Health and Social Care Act 2012.
The report from the National Audit Office (NAO), found that since then, the budget for specialised services has increased from £13bn to £14.6bn or 6.3% a year, compared to a 3.5% increase for the NHS as a whole. It is set to increase by 7% this year, compared to 3.4% for the rest of the NHS.
Amyas Morse, head of the NAO, said: “Against a backdrop of increasing pressure on NHS finances, NHS England has not controlled the rising cost of specialised services. If specialised services continue to swallow up an increasing proportion of the NHS budget, other services will lose out.”
The NHS have also consistently failed to keep the spending within their original budget because it was based on poor-quality data. It overspent by £377m (2.9% of the budget) in 2013-14, £124m (1.5% of the budget) in 2014-15 and £142m in the first 10 months of 2015-16.
A large proportion of this spending (£110m in 2015-16) was on the Cancer Drugs Fund, which is set to be abolished in July.
The report attributes this to a number of factors, including a lack of NHS data on how much they are spending on commissioning or the impact on patients and a growth in effective but expensive drugs.
The report urges NHS England to gain control of specialised services by developing an “overarching strategy” and integrating it in the Five Year Forward View, and finalising its governance arrangements for specialised commissioning.
It says that the NHS, in collaboration with the Department of Health and NICE, should ensure they consider overall affordability when making decisions about specialised services, and work with NHS Improvement to design tariffs for effective commissioning.
NHS providers also found specialised commissioning by the NHS obstructive to their work. The report includes a survey of NHS trusts by the NAO, which found that 69% of acute trusts disagreed, or strongly disagreed, that NHS England’s strategy for specialised commissioning helped them to plan long term.
The NAO recommended that NHS England should ensure they have the right skills and information to commission effectively.
An NHS England spokesperson said: “For the first time in three years, specialised commissioning has successfully balanced its budget this year – which is a major achievement – but the NAO rightly points to the pressure we're having to manage from rapidly rising demand for extremely expensive new treatments.
“But there is no free lunch here, so continuing to balance the books will continue to require difficult choices about investment priorities."
Last year John Murray, director of the Specialised Healthcare Alliance, attributed the overspend to “policy paralysis”.
NHS England recently opened a consultation on greater prioritisation of specialised services, meaning that some services will lose out in an effort to reduce spending.
Sarah Hutchinson, policy adviser at National Voices, the coalition of 160 health and care charities, said: “Fundamentally, NHS England’s approach to specialised commissioning has the potential to deliver better and more equal care for patients. The report from the NAO is a welcome yardstick as NHS England develops its policies around specialised commissioning.
“The NAO found that some patients, particularly those with long-term conditions, have found their care becoming disjointed, and this is of great concern. A disjointed system removes any control patients have over their care as they are passed from service to service.
“The report also concluded that NHS England does not have the information it needs to assess whether patient outcomes are improving. With no clear picture of the impact of specialised commissioning, the NHS will struggle to meet the needs of the population it serves.”