Policy paper

2010 to 2015 government policy: NHS efficiency

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Applies to England

• Publication for Northern Ireland
• Publication for Scotland
• Publication for Wales

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/making-the-nhs-more-efficient-and-less-bureaucratic Current policies can be found at the GOV.UK policies list.

Issue

Spending on the NHS will increase each year between 2011 and 2015. But demand for health services is rising, and what we expect of the NHS changes as society changes, for example as people live longer.

New drugs and treatments are always coming onto the market, so it’s important that the NHS makes the best possible use of the funds available.

Actions

Efficiency savings

We want the NHS to make up to £20 billion worth of efficiency savings by 2015, so there are more funds available for treating patients and to allow the NHS to respond to changing demands and new technologies.

The Quality, Innovation, Productivity and Prevention (QIPP) initiative sets out how the NHS is planning to make these savings, at the same time as they’re improving the quality of care.

For example, it should be possible to reduce expensive hospital admissions by:

• getting patients more involved in managing their own conditions, where possible
• treating more patients closer to home

New technology

By 2015 we want all hospitals to be keeping patient records electronically rather than on paper, so staff only need to collect and record information about patients once. This should make things more efficient, reduce the chance of mistakes that might compromise patient safety and make it easier for health and social care services to work together.

Also by 2015, all patients should be able to book GP appointments, order a repeat prescription and communicate with their GP surgery online.

Management and commissioning

We plan to reduce the costs of managing the NHS by changing NHS management and commissioning.

Providing data

At the moment NHS trusts and other organisations are sending around 260,000 reports a year to the Department of Health. Much of this is useful, but we’re reviewing the data to identify what’s worth collecting in future and what isn’t.

We consulted on changing the data return rules in August 2011, and we’re due to publish detailed proposals in spring 2013.

Medical research

We want to simplify how research is regulated as part of our plans to increase innovation in medical science.

Private Finance Initiatives (PFI) and procurement

We’re looking at new approaches to Private Finance Initiatives and NHS procurement.

Background

The ‘Power of information’ report, published in May 2012, has details of our plans for making health services available online.

We published the white paper ‘Equity and excellence: liberating the NHS’ in July 2012. It set out proposals for the future of the NHS - including plans to make it more efficient.

We consulted on these proposals, and published the government’s response to the consultation in December 2010.

The ‘Healthy Lives, Healthy People’ white paper has details of plans for collecting more data on how well public health approaches are working.

We set out plans to improve NHS procurement in ‘NHS procurement: raising our game’ and updated in ‘Creating change: innovation, health and wealth one year on’.

Who we’re working with

The government’s mandate to NHS England, published in November 2012, gives NHS England responsibility for making sure the NHS achieves the efficiency savings we’ve asked them to make.

We’re working with the health sector regulator Monitor to make sure it focuses on efficiency as well as quality when carrying out its new regulatory responsibilities.

Bills and legislation

We needed new powers to introduce some of these changes - for example, setting up NHS England and clinical commissioning groups. Most of these new powers are in the Health and Social Care Act 2012.

Appendix 1: Private Finance Initiatives (PFI) and NHS procurement

This was a supporting detail page of the main policy document.

Private Finance Initiatives (PFI)

Sandwell and West Birmingham Hospitals Trust is planning a project to bring in new investment and reorganise their services. We’re working with the trust to look at whether PF2, the government’s new approach to PFI, is the right way to deliver the project.

Procurement

The NHS buys £18 billion worth of goods and services each year. We think it should be possible to save £1.2 billion by improving NHS procurement. So we are:

• providing NHS trusts with guidance on procurement standards, to help them measure how good their procurement is and compare themselves with other trusts
• publishing guidance encouraging NHS trusts to use GS1 bar-coding - a system that makes it easier to find the best prices and change suppliers if necessary
• requiring that NHS trusts publish details of contracts worth over £10,000 on Contracts Finder

And we’ve commissioned a procurement review to recommend further improvements. The review will be published during 2013.

Appendix 2: NHS management and commissioning

This was a supporting detail page of the main policy document.

We plan to reduce the costs of managing the NHS by more than a third between 2010 and 2015. We’ll do this by:

• from April 2013, abolishing primary care trusts (which cost around £1 billion a year to run) and strategic health authorities
• closing some NHS organisations to use resources more efficiently by transferring functions elsewhere

NHS property company

We’re also expecting to make savings through the new NHS property company, which is taking over responsibility for renting out nearly 4,000 buildings - including office space, GP surgeries and community hospitals. The company will also be responsible for selling off property belonging to primary care trusts that’s no longer needed.

Commissioning and paying for NHS services

Some health services will be commissioned directly by NHS England. For other services, new clinical commissioning groups will take over responsibilty for deciding how NHS funds are spent in their local area.

We’re expecting this new approach to commissioning and payments to help make the NHS more efficient by:

• basing payments on quality of care rather than just number of patients treated - so service providers have more of an incentive to get care right the first time
• giving GPs more responsibility for managing budgets - so they have more of an incentive to look for the most efficient treatments

From 2014, we’re introducing a new ‘value-based pricing’ system for setting the prices of branded medicines. This means there will be a closer link between how much the NHS pays for a new medicine and the benefits it brings to patients and society.

Organisations with financial problems

We’re also making the health sector regulator Monitor responsible for keeping essential services running if organisations get into financial trouble. This should mean more openness about what’s happening with struggling organisations - and that if payments are made to keep a service going, they’re made in a transparent way.