The Audit Commission says that trusts can make savings through cutting staffing costs, increasing day surgery and reducing emergency admissions. But wider changes will be needed across the NHS if it is to save £15-20 billion by 2014.
A new briefing paper published today by the public spending watchdog warns that NHS patterns of spend and activity in 2009/10 showed few signs of change in the key areas needed to meet its savings target. It says that trusts that spend the most on certain services should reduce expenditure to that of their more efficient counterparts.
The paper, More for less 2009/10, reveals how and where primary care trusts (PCTs) spent their money in 2009/10 and how trust income changed. It also looks at how successful the NHS has been in moving care out of hospitals to more cost-effective settings. It finds that since the Commission published a similar analysis in 2009, many key markers of success in improving productivity have remained virtually static.
The NHS did make improvements in some areas over the last year, and some aspects of hospital efficiency improved. PCTs have invested heavily in community services that could provide more cost effective care outside hospitals. But nationally the Audit Commission found no identifiable shift to providing services in this way.
But while gains were made in some areas, other areas targeted for change saw no improvement. Emergency (non-elective) admissions to hospitals continued to grow at 3 per cent a year and the numbers of outpatients continued to rise. Achieving changes in these areas is a crucial part of the health service's Quality Innovation Productivity and Prevention (QIPP) programme.
Andy McKeon, the Audit Commission's Managing Director of Health, said:
'It takes time to turn the tanker, but there was little sign of these changes beginning to happen in 2009/10. The reassuring message is that there are still big savings to be made. But to do so, commissioners and providers must look differently at how they manage and finance an evolving NHS.'
More for less 2009/10 highlights a number of areas in which the NHS could make substantial savings. To do this, it says the trusts that spend the most on certain services should reduce their expenditure to that of their more efficient counterparts.
The briefing suggests that:
- Trusts could save over £200 million per year by doing more day surgery.
- By reducing the cost of nursing per hospital bed to the average, trusts could save £300 million, or £500 million if they reduced to the performance of their most efficient peers.
- Primary care trusts could make savings of £700 million per year if those with more than the expected number of emergency admissions reduced to the average. The variation is far higher than can be explained by differences in ill-health alone.
- Hospital readmissions, which have risen by 7 per cent in five years, and cost £1.5 billion in 2009, could be reduced by introducing more effective public health strategies on smoking and alcohol.
Andy McKeon adds:
'The NHS has a daunting task ahead of it to cut costs by £15-20 billion by 2014 .The QIPP programme depends on the NHS reversing some long-standing trends of rising numbers of emergency admissions, improving hospital productivity and providing more care, more cost effectively, outside hospitals.'
'The underlying message is that those who commission NHS services need to find different, better, ways of meeting people's needs. All those who provide services need to cut costs.'
ENDS
Notes to editors
1. The Audit Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.
2. Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers.
3. On 13 August 2010 the Secretary of State for Communities and Local Government announced that he plans to disband the Audit Commission. His intention is to have new arrangements in place for auditing England's public bodies by 2012/13.
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