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© Nuffield Trust and Health Foundation © Nuffield Trust
23 October 2013
Austerity and quality?
Anita Charlesworth
Chief Economist
Nuffield Trust
© Nuffield Trust and Health Foundation
Public and private UK healthcare spending, 1997-2011
Years Average annual real growth in
public spending
Average annual real growth in
private spending
1997 to 2011 4.9% 3.7%
-10%
-5%
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
140
160
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Gro
wth
rate
£ b
illio
ns,
2012 p
rices
Private
Public
Private growthratePublic growthrate
© Nuffield Trust and Health Foundation
-15%
-10%
-5%
0%
5%
10%
15%
2000-09 2009-11
Source: OECD 2013
Average annual growth rate in health spending across the OECD
© Nuffield Trust and Health Foundation
The financial gap by 2021/22, assuming English NHS funding rises as set out in the 2010 Spending Review to 2014/15 and is frozen in real
£87
£92
£97
£102
£107
£112
£117
£122
£127
£132
£137
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Fu
nd
ing
(£
bil
lio
n)
Year
Funding pressures on the NHS in England
Freeze in NHS funding beyond 2015/16
£44 bn (£54 bn)
Source: Roberts and others, 2012
© Nuffield Trust and Health Foundation
Funding pressures on acute services in England attributable to population change and to the rising probability of admission for chronic conditions
Source: Roberts and others, 2012
£38
£43
£48
£53
£58
£63
£68
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Fu
nd
ing
pre
ssu
re o
n h
osp
itals
in
En
gla
nd
(£B
n)
Year
Additional acute spending due to pay increases
Additional acute spending due to rising probability of admission for chronicconditions
Projected acute spending due to population growth
1.3% a year
2.7% a
year
4.1% a
year
© Nuffield Trust and Health Foundation
Closing £13 billion Funding Gap: 2010/11 to 2014/15
£85
£90
£95
£100
£105
2010/11 2011/12 2012/13 2013/14 2014/15
Fu
nd
ing
(£
bil
lio
n in
2010/1
1 p
rices)
Year
Funding pressures on the NHS in England
Funding pressures after for pay restaint
Funding pressures after pay restraint andmanaging hospital activity for chronic conditions
Funding pressures after pay restraint, managinghospital activity for chronic conditions, andproductivity savings
Funding allocation based on 2010 spending review
Pay
reduction:
£5bn
Disease
management:
£3bn
Acute QIPP
Actions: £4bn
© Nuffield Trust and Health Foundation
Funding gap in 2021/22 under three scenarios from the IFS
© Nuffield Trust and Health Foundation
Meeting the Challenge – the NHS approach
• Reducing input costs
• National public sector pay policy
• Reducing administrative costs
• Improving technical efficiency
• Real terms reduction in the unit prices paid for hospital care
• Medicine management
• Improving allocative efficiency
• Shifting care from hospital to community settings
• Better integration of care
• Demand management
© Nuffield Trust and Health Foundation
Staff Changes in 2011-12 (Whole-time equivalents)
Change 2010-
2012
% Change 2011-
12
Change April
2012-April 2013
Total NHS
workforce
- 19,669 -1.7% -8,423
Medical and
Dental
+3,263 +3.3% -1,878
Qualified Nursing -4,028 -1.24% -1,650
Scientific,
therapeutic and
technical
+1,558 +1.2% -1,921
Support to clinical
staff
-8,383 -2.8% -4,061
NHS
infrastructure
-15,368 -7.6% +1,050
© Nuffield Trust and Health Foundation
The link between overall spending and outcomes
Source: Joumard and others 2010
© Nuffield Trust and Health Foundation
Potential gains in life expectancy at birth through efficiency
Source: Joumard and others 2010
© Nuffield Trust and Health Foundation
The relationship between quality and cost at the patient or provider level – results of a systematic review of US evidence
Quality measure Positive Negative Imprecise,
indeterminate, mixed
or no difference
Access 0 3 1
Composite 0 1 1
Outcomes 17 10 14
Patient experience 2 3 3
Process 6 5 8
Structure 3 2 0
All 28 24 27
Source: Hussey and others 2013
© Nuffield Trust and Health Foundation
Healthcare productivity growth rates: comparison of ONS UK estimates and York University England estimates
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2006 2007 2008 2009 2010 Annual averagegrowth
CHE Productivity ONS Productivity ONS productivity 1995-2010
© Nuffield Trust and Health Foundation
UK Review – Does improving quality save money?
•Poor quality is both common and costly – hospital acquired infections cost the NHS £1 billion a year. 25% of radiological procedures are unnecessary
•Some interventions to improve quality do work but cost more than they save.
•Some interventions to improve quality do work and save money.
•Cost and benefits are spread over time and between different organisations.
•Contextual factors influence whether a provider saves money by improving quality
Source: Ovretveit 2009
© Nuffield Trust and Health Foundation
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23 October 2013
www.qualitywatch.org.uk