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NHS savings plan ‘un-doable’ warns economist

A leading health economist has warned the NHS may be setting itself up for failure over ‘frankly un-doable’ efficiency savings.

Responding to reports that senior government figures have warned total savings of £50bn may need to be found by 2019-20, Professor John Appleby, chief economist at the King’s Fund said ‘maybe its time for some realism’ over what can really be achieved.

Describing the target to save £20bn by 2015 as ‘just this side of credible’, increasing this to £50bn by 2019-20, as has been suggested by senior officials at the Department of Health, ‘surely must have crossed the line’.

Writing in the British Medical Journal today he said even current targets of £20bn over the next few years are ‘barely achievable’ given historic assessment of productivity gains.

Assuming no real funding growth and the need to improve outputs by around 5% a year, by 2018 this is equivalent to an improvement in productivity of around £49bn at 2010 prices, he calculates.

But looking at past trends, the NHS has rarely made a positive productivity gain in excess of 1% a year ‘let alone 5% each year for five years’.

He says: ‘Even if the NHS achieves half the challenge over the next eight years it will have produced something quite unprecedented.

‘Perhaps that’s the best that can be hoped for,’ he added.

Dr Johnny Marshall, executive member of the National Association of Primary Care and chair of United Commissioning said he welcomed the much-needed expertise of economists such as Professor Appleby but it should be recognised that the challenge CCGs had been set is unprecedented.

He told Pulse: ‘He does point out, and I agree, that it’s good to have something to stretch us – something to make us think beyond the salami slicing, to think differently in a big transformational way.’

The problem, Dr Marshall added, is that £50bn is an abstract number and no one has really looked at what that would mean for NHS services.

He said: ‘We need to be much more explicit about what that figure would mean. For example if to meet that target we had to shut one in five hospitals – where is the discussion taking place that would make that deliverable?’

A DH spokesperson said: ‘The NHS is has made £3.9 billion savings so far this year and is therefore on track to make the £20bn savings target while keeping waiting times low, performing more tests, and reducing infections even further.

‘We know the NHS can, and must be, more efficient to meet future challenges. Where the NHS can do things better and save money to reinvest in high quality patient care, it must do so. We have always been absolutely clear that being efficient does not mean cutting services – it means getting the best services to meet patients’ needs and the best value for every pound the NHS spends’