Urgent action is needed now to prepare for the slowdown of NHS funding from next year, says a report from the healthcare think tank the King's Fund. And doctors must be better engaged with the reforms of the NHS if the slowdown is not to damage care of patients, it says.
The report argues that good forward planning will help NHS organisations to cope when funding for the health service changes during the next spending cycle, stretching from 2008-9 up to 2011-12.
The chancellor of the exchequer, Gordon Brown, is expected to announce real term cash increases in the next comprehensive spending review of between 3% and 3.5% per year for the NHS up to 2011-12, which is less than half the annual increase received by the service every year since 2000.
The King's Fund report says that to help the NHS cope with this reduced funding the government should act now to reduce widespread variations in hospital performance, improve productivity, and win the support of health staff in its efforts to reform the health service.
The report says: “In a labour-intensive industry, doctors, nurses and other health care professionals are the key resource—not just clinically, but managerially too.
“Greater efforts should be made to involve clinicians in the management of the NHS—through responsibility for devolved budgets and involvement and ownership of strategic management decisions.”
The chief executive of the King's Fund, Niall Dickson, said: “Everyone knows the days of massive growth in health spending will come to an end from 2008. That is bound to be difficult but it should not be a cause for despair.
“The message from this report is clear: once the service is placed on a sound financial footing, the focus must be on improving productivity, tackling variations in performance, and setting the right incentives for both staff and institutions.
“This will inevitably mean local organisations will need to develop a much greater understanding of the different needs of individual patients, and for some organisations that will demand a very different approach to delivery.”
The report was produced after a summit held last year that was attended by government officials, health professionals, economists, and policy analysts.
The report's editor, John Appleby, chief economist at the King's Fund, said: “As funding growth slows from 2008, but with demand and public expectations likely to continue to increase, getting more benefit from every pound spent will become an urgent priority.
“The next few years will be characterised by increasing turbulence and financial uncertainty as the government's reforms continue to bite, but there is no reason why the health service cannot adapt to these changes and become more responsive and efficient.”
The health minister Andy Burnham said: “I'm pleased that the King's Fund recognises that the NHS can rise to the challenge of delivering high quality patient care, whatever the spending settlement.”
Funding Health Care: 2008 and Beyond is available at www.kingsfund.org.uk.