QIPP FOCUS
Professor John Hutton, director of the York Health Economics Consortium at the University of York, focuses on the ‘I’ in QIPP. In
the May/June edition of NHE we wrote about NICE and the future of
NHS innovation. Innovation is a central plank of the Department of Health’s QIPP (Quality, Innovation, Productivity and Prevention) programme, designed to free up around £20bn over fi ve years to help the NHS to meet increasing demand with no extra resources.
The programme was launched two years ago by the previous Government and is broadly designed to promote improve- ments in the NHS that will enable services to be provided more effi ciently while main- taining the standards and quality to which patients and the public have become accus- tomed.
There is a growing recognition that the NHS needs to innovate to ensure its sus- tainability in times when budgets are no longer growing signifi cantly year on year. The Government and other observers are
correct in their analysis that the signifi - cant effi ciency savings required will not be achieved unless major changes are made to the way in which services are delivered. Whether or not greater competition will promote this remains to be seen but there is no doubt that signifi cant change will have to occur to ensure that the quality of patient care can be maintained in future. How this change can be achieved is the key question.
The need for improved productivity
In the decade from 2000-10, real growth in funding for the NHS was running at about 5% annually. Much has been made about how productivity in the NHS – crudely, outputs measured against inputs – has failed to keep pace with this growth in funding. The reasons for the shortfall in productivity are many and complex but a signifi cant element has been infl ationary pressures specifi c to the NHS, such as the
growth in the costs of drugs, rising costs generated through PFI schemes and most importantly, the cost of new pay deals across the NHS. This has meant that 5% growth has felt more like 1-2% in any given year.
One of the current Government’s key com- mitments is to continue to maintain the NHS budget in real terms. Many commen- tators have pointed out that because of the ongoing cost pressures the NHS faces through for example growing numbers of older people, even providing funding to cover the cost of infl ation will only effec- tively equate to around 97% of the previ- ous year’s funding. Real effi ciency savings therefore need to be found if the NHS is to be able to maintain the quality of its ser- vices into the future.
In 2009, the previous Government com- missioned a report by management con- sultants McKinsey which identifi ed a pos-
30 | national health executive Jul/Aug 11
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