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£50 billion in NHS efficiency savings by 2020 'undoable'

UK News | June 21, 2012

Selina McKee

£50 billion in NHS efficiency savings by 2020 'undoable'

Asking the National Health Service to achieve efficiency savings of some £50 billion over the next eight years is "frankly undoable", John Appleby, chief economist at The King's Fund, has warned.

The NHS is currently striving to hit its "barely achievable" target of saving £20 billion by 2014/15, but far from this being the end of the line, Richard Douglas, director general of policy, strategy and finance at the Department of Health, has reportedly fingered a further target of £50 billion by 2019/20.

In an article published by the British Medical Journal online, Appleby writes that this is "a startling admission of the long-term impact on public services of the global financial crisis and ensuing recession". 

While this might not come as a huge surprise given the current stagnant economic growth and likelihood that the NHS budget will not be as protected post 2014/15, finding £50 billion by 2019/20 is not achievable, he argues.

Outputs would have to increase 5% a year for eight years in order to hit this target (assuming zero funding growth) and match the Wanless challenge for a better NHS, but a quick peek at history shows that the health service has "hardly ever made a positive productivity increase in a year in excess of 1%", Appleby explains.

And while conceding that stretching targets may help produce better results that less testing goals, he notes "if the productivity policy goal is already just this side of credible, stretching is another four years surely must have crossed the line".

"Even if the NHS achieves half its target in the next eight years it has achieved something quite unprecedented, and perhaps that's the best that can be hoped for," he says.

Government optimistic

But officials at the DH remain optimistic that the health service meet its goal. "The NHS is has made £3.9 billion savings so far this year and is therefore on track to make the £20 billion savings target while keeping waiting times low, performing more tests, and reducing infections even further," a spokesman said in a  emailed statement. 

"We know the NHS can, and must be, more efficient to meet future challenges," he said, but added 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".

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