September 11, 2001 was a good day to bury bad news, a government spin doctor famously emailed on the day. What about a royal wedding day? Sure enough, via the Department of Health (DH) there was this announcement, saying that hospitals are expected to make an even higher rate of "efficiency" savings than before: from 4% per annum up to 6-7%. This press release seems to have come out so late yesterday that neither the DH website nor that of Monitor (the regulatory body that made the announcement) have published it. So I have been unable to access the details. But make no mistake, this is a highly significant development.
What on earth is going on? So far almost all the heat has been around the Coalition's health reforms, and the dramatic changes to the commissioning side of the NHS, which are already in rapid progress, regardless of what is happening in Parliament. This is the side beloved of politicians and policy wonks. The idea is that the NHS will be shaped by more or less local organisations assessing their needs and then "commissioning" it from the supply side - mainly hospitals. Hospitals, formerly in the driving seat of the NHS, would be put in their place. It is a chaotic, market driven vision of change. Under Labour commissioning was being led by the primary care trusts (PCTs); the coalition is moving this towards consortia of general practitioners (GPs). This is all very well, but there is something else going on, and this is much more Stalinist, and which pre-dates the Coalition.
Or rather the model might be the Chinese leader Deng Xiaoping, who masterminded China's recent astonishing growth. Deng ensured the process was centrally directed, with no challenge to the Party's authority; he worked by manipulating the incentives open to his underlings. The centrepiece of this dynamic in the NHS is the £20bn of savings that I described in my last post. This money isn't being cut from the NHS budget; it is being "redeployed", spent somewhere else, although it is very unclear where. What today's story suggests is that most of this pressure will be felt by hospitals. The drive is to take 25% out of their budget over a mere four years. Wow.
Regardless of where the chaotic process of commissioning takes us, the central leadership of the NHS (and it is not difficult to identify Sir David Nicholson as the driving force) has decided that hospitals are going to play a smaller role. This is pretty conventional thinking in the medical field. Hospitals are old-fashioned places where people are as likely to catch an illness as be cured. The idea is to reduce them to a smaller number of centres of excellence, with the very best professionals supported by the very best technology. Meanwhile more illnesses will be treated "in the community". I can't express an opinion on how valid this view is, though I instinctively feel that it is missing something.
Never mind. What it means is that many of the country's hospitals will be closed. Regardless of the chaos that has hit the commissioning side, the NHS bosses are turning up the heat. I don't know how ready our politicians are for it. It has Labour's fingerprints all over it, but it is the Coalition that will be in the firing line. The only upside is that it should release money that can be spent on other things. That and the knowledge that the government is doing the right thing. Probably.