Anita Charlesworth: Austerity and quality

© 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


-15%

-10%

-5%

0%

5%

10%

15%

2000-09 2009-11

Source: OECD 2013

Average annual growth rate in health spending across the OECD


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


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


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


Funding gap in 2021/22 under three scenarios from the IFS


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


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


The link between overall spending and outcomes

Source: Joumard and others 2010


Potential gains in life expectancy at birth through efficiency

Source: Joumard and others 2010


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


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


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


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23 October 2013

www.qualitywatch.org.uk

Anita Charlesworth: Austerity and quality

Health & Medicine

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