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Specialised commissioning spend threatens financial stability of NHS

NHS England will have to take some ‘tough decisions’, warn MPs

Caroline White

Friday, 15 July 2016

Disproportionate spending on specialised services is threatening the financial sustainability of the wider NHS, an influential panel of MPs has concluded in a new report published today.

NHS England will have to take some “tough decisions" if it is to stay within the budget it set for itself for these services, says the Public Accounts Committee report.

NHS England took on responsibility for commissioning specialised services—of which there are nearly 150, covering a diverse range of disparate and complex services—in April 2013.

But between 2013–14 and 2015–16, the budget for these services rose from £13 billion to £14.6 billion, an average yearly increase of 6.3%. Over this period, the budget for the NHS as a whole increased by only 3.5% a year on average.

“We recognise that it is challenging to commission such a wide range of complex services while funding is becoming increasingly tight. However, we are concerned that NHS England and the Department of Health painted an unduly healthy picture of the state of commissioning specialised services in England,” says the report.

“It is disappointing that, after three years, NHS England still does not have consistent information from all providers on costs, access to services and outcomes, or how efficiently services are being delivered,” it continues.

“Without this information it cannot manage the ongoing pressure on its budget, make effective strategic decisions or gain assurance that its objectives for these services are being met,” it says.

NHS England must take action to ensure new drugs and medical equipment are affordable; that services are delivered cost effectively; and that demand for the specialised services it commissions is better managed, it insists.

When attempting to rein in its spend, NHS England will need to work closely with NHS acute providers to avoid adding further undue pressures to their budgets, it empahsises.

Among its recommendations to government, the Committee calls on NHS England to set out publicly by October how specialised services fit within the NHS Five Year Forward View as well as the £22 billion efficiency challenge facing the NHS.

Decision-making must be consistent, transparent, and equitable, says the Committee, urging NHS England to set out by September "the roles of its advisory committees and decision-making bodies, the decisions they make, how these decisions will be documented, and when and to whom they will be made available."

By April 2017, NHS England should be using improved data “to link spend, by service provided, to service quality, patient outcomes and patient experience” so that different providers can be compared and value for money improved, says the report.

Meg Hillier, Chair of the Public Accounts Committee commented: "Our inquiries and reports over the past year have highlighted significant concerns over planning, weaknesses in data, and the risks government efficiency targets pose to desperately needed services.

“As we have reported previously, there is not yet a convincing plan in place to close an efficiency gap running to billions and avoid a ‘black hole’ in NHS finances.”

She continued: “Alarm bells therefore ring when we examine an area of the health service that, while benefiting from above average budget increases, is nevertheless failing to keep within spending targets.”

She said that specialised services provide vital care for many people and, to provide the best possible care to the largest possible number of people, the budget must be spent wisely. NHS England can, and should do more, to get best value from spending on specialised services.

“As a matter of urgency, it must review the way it commissions these services and make better use of the data available to ensure public money is spent efficiently,” she insisted, adding: “Rapid change is needed and we will expect to see work undertaken to address our recommendations over the summer."

Dr Mark Porter, BMA council chair, said that the report was yet another warning about the financial crisis engulfing the NHS.

“Patients deserve more than shoddily planned healthcare and funding. The new prime minister must, as a priority draw up a long-term strategy for the NHS that addresses the fundamental workload and funding challenges that are overwhelming our health service. Failure to invest now will result in a disaster in the future both financially and in terms of patient health and care,” he said.

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