The NHS appears to have met its productivity targets for 2011-12, which is a fantastic achievement given the latest reorganisation being foisted upon it. Many people, myself included, found it hard to believe that the service would be able to achieve such an ask at a time of immense change.
This is an important step towards meeting David Nicholson’s famous £20 billion productivity challenge, which recognises the fact that under any government the health service will need to meet rising costs of demand and expectations on flat resources.
But what is the significance of this news? Two questions have to be asked.
First, is this the new system starting to deliver or is this the parting gift of the old system, now being dismantled? It seems unarguable that this is the final legacy of the old system.
Clinical commissioning groups have been shadowing NHS budgets and many are getting to grips with the challenges they face. But the make-up of those groups was still being decided in spring 2012 and the money saved so far has largely come from national decisions to squeeze pay and hospital tariffs.
The good news is that the CCGs will start work without a legacy of debt. The bad news is that they are untried and untested in delivering the scale of savings still needed. The degree of finance risk facing the system is about to significantly increase.
The second question is whether the savings are sustainable.
This seems less certain. By reducing the tariff, many NHS trusts have become more fragile financially. Bleeding hospitals of cash is not a long-term strategy: we need to reorganise what services they provide instead. And how long will it be possible to maintain pay freezes?
Rather than salami-slicing, more of the remaining savings need to come from transforming care. Essentially, helping people stay well rather than treating people when they were ill. The need for such change is typified by news this week that 80 per cent of NHS spending on diabetes goes on treating preventable complications rather than stopping people getting the disease.
Very little transformational change has yet been attempted. News that 2011-12 productivity targets have been met should be welcomed but treated with caution. The Nicholson challenge is a marathon, not a sprint and we have only made the first five miles.
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Neil Churchill is the chief executive of Asthma UK. This article is written in a personal capacity
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