NHS efficiency savings may be at expense of service cuts and staff pay, say MPs

BMJ 2013; 346 doi: (Published 22 March 2013) Cite this as: BMJ 2013;346:f1914
  1. Adrian O’Dowd
  1. 1London

Progress so far in making efficiency savings in the NHS in England may have been achieved only by reducing some services for patients and freezing staff pay, MPs have warned.

More substantial long term changes to the way the NHS provides services in a more cost effective and efficient way are far less certain, said a report published by the parliamentary Public Accounts Committee on 22 March.1

In their report on progress in making NHS efficiency savings, the MPs said that there seemed to be positive movement towards the government’s goal for the NHS to make efficiency savings of £20bn (€23bn; $30bn) in the four years to 2014-15 to allow the NHS to keep pace with growing demand.

During the committee’s inquiry the Department of Health had reported that the NHS made savings of £5.8bn in 2011-12 and that it was expected that this would rise to a total of £12.4bn by the end of 2012-13 so was on track to meet the £20bn target.

However, most of the savings made so far have been achieved through freezing NHS staff pay while also reducing the prices paid for healthcare, said MPs.2

A more worrying factor was that despite the government’s intention that quality of healthcare should not suffer while efficiencies were made, a fear was that the quality of care was being affected.

Patients’ groups and professional bodies had raised concern that access to treatments such as cataract and bariatric surgery were being rationed. Although such treatments were sometimes classed as being of “low clinical value,” they could make important differences to patients’ quality of life, the groups said.

The report described another part of the efficiency drive—transformation in the way health services were provided—as being “more challenging and risky.”

Over the four years to 2014-15 these transformational changes were expected to generate 20% of the total savings, but the health department said that it expected that by the halfway stage, the end of 2012-13, only 7% of savings would have been generated this way.

The kind of service change envisaged included centralising services and providing more community based care, but the MPs said that they were not satisfied that the department had done enough to help the NHS transform services.

The MPs also cautioned that the efficiency saving figures given so far were not completely reliable, because local primary care trusts measured and reported savings in different ways.

Using national data, the department could substantiate only £3.4bn of the £5.8bn savings reported for 2011-12, said the MPs.

Margaret Hodge, the committee’s chairwoman and Labour MP for Barking, said, “The NHS has achieved its financial savings target, but this has in large part come from freezing wages.

“We are concerned that other savings are being achieved by rationing patients’ access to certain treatments. These include cataract surgery and hip and knee replacements. These procedures are described as being ‘of low clinical value,’ but people waiting for these operations suffer pain and a poorer quality of life.

“Furthermore, the finances of some trusts are fragile, and there is a risk they may resort to simple cost cutting rather than finding genuine efficiency savings.

“As the Francis report on the Mid-Staffordshire NHS trust showed,3 financial pressures may already be causing some hospital trusts to cut staff, with damaging effects on the quality and safety of care.”

Responding to the MPs’ report, John Appleby, chief economist at the healthcare think tank the King’s Fund said, “Efficiencies [in the NHS] are becoming harder to deliver as one-off savings such as cuts in management costs start to slow. Pay restraint and holding down prices paid to hospitals are no substitute for delivering genuine productivity improvements.”

He added, “As the report points out, major changes to hospital services are needed to improve the quality of care and increase financial sustainability, yet the decision making process remains complex and is often undermined by resistance to change, even when a strong clinical and financial case for change has been made.

“We echo the committee’s concern about the lack of strategic responsibility in the new health system for leading large scale reorganisations of services and the adverse impact this could have on attempts to improve the quality of care to patients.”


Cite this as: BMJ 2013;346:f1914