Looking past the reshuffle

David Cameron held his “big” cabinet reshuffle this week. But as attention focused on Ken Clarke, William Hague and Michael Gove – and the Mail’s oh-so-tasteful “catwalk” of the new women in the cabinet – one name was conspicuous by its absence.

That name was “Jeremy Hunt.” There wasn’t so much as the hint of a suggestion that the health secretary might be moved on. That has to be a tribute to the way Hunt has managed to calm the health service and get it out of the headlines.

These are not mean achievements. Hunt’s predecessor, Andrew Lansley, inflicted an unexpected, unnecessary, and incoherent reorganisation on the NHS, and Hunt has had the sense to leave the new organisations to try and make it work.

He has also handled the scandal at Mid Staffordshire NHS Foundation Trust well; bringing in recognised quality experts to advise trusts on what to do next and (more surprisingly) following up on their recommendations (see below).

Some policy wonks, though, are starting to agitate that “it’s quiet – too quiet” on the NHS front, given the huge financial and performance challenges it is facing.

This week, the King’s Fund held a breakfast meeting to discuss its latest quarterly monitoring report on these issues, and the likely political response. The think-tank warned just a few weeks ago that an NHS financial crisis is now “inevitable” sooner or later (see ‘there may be trouble, ahead’ below). So report was, predictably, gloomy.

A quarter of NHS finance directors expect to end the year in deficit and three out of five expect to miss the cost improvement plans, or CIPs, that they need to hit if the NHS as a whole is going to meet the ‘Nicholson Challenge.’

This is the challenge set by the former chief executive of the NHS, Sir David Nicholson, to find £20 billion of efficiency savings by 2015 to bridge the gap between flat funding and rising demand; without the rationing, longer waiting times, and unpainted and uncleaned wards of squeezes past.

In that context, it is also bad news that the NHS waiting list has gone over 3 million for the first time in five years, and that pressure is building further back in the system. For example, the number of patients who get diagnostic tests within six weeks has gone up spectacularly over the past year.

Logically, the NHS now needs to do one of three things; reduce demand, secure more money to cope with that demand, or deal with that demand more effectively.

Reducing demand looks to be out. England’s population is not only ageing, but ageing in poor health. Yet there is little or no political or public appetite for action to, say, tackle obesity or chronic stress. Instead, A&E activity from January to June this year was 4% higher than last year, emergency admissions were up 6%, and GPs are continuing to refer more people to hospital.

Immediate injections of cash also look unlikely. Paul Johnson from the Institute for Fiscal Studies pointed out that while the NHS is under pressure because it its funding is flat when it needs increases of around 4% a year, it is still doing better than other departments.

Given George Osborne’s determination to sink the size of the state, any increases in spending for the NHS would further distort government spending towards welfare (pensions) and health. And, as Mary Riddell of the Telegraph pointed out, “even if that happened until no bin was emptied or children’s playground was opened” it still might not be enough.

That’s why there has been some interest recently in new taxes or national insurance levies for the health service. But politicians are unlikely to be keen; and NI would be highly regressive. So that leaves dealing with demand more effectively.

In essence, this is what the NHS has been trying to do since Sir David laid down his challenge in 2008. So far, it has done quite well by holding down prices and wages, but it is running out of rope. Not only is Unison threatening strike action over wages, trusts are being forced to take on nurses to improve ward staffing levels in response to Mid Staffs.

So the great hope is that rationalisation and reorganisation will do the job; in other words, that fewer and more specialist hospitals, combined with more ‘integrated’ health and social care, will on the one hand deliver a safer service for those who really need hospital treatment and a cheaper one for those who don’t.

Politicians of all stripes are signed up to these ideas (see the NHS Confederation conference post, below); even though the evidence base for integrated care is thin and watchdogs are sceptical (see the NAO post, below). But if they can work, they will take time and money.

The King’s Fund’s chief economist, John Appleby, used the breakfast meeting to reiterate his view that the NHS needs a cash injection now to stop “otherwise viable” trusts going bust, and to create the space for some creative thinking. But none of the parties have taken him up on this.

Labour’s Andy Burnham and the Lib Dems’ Norman Lamb have suggested that NHS and social care budgets should be combined. This wouldn’t tackle the separate (but even scarier) social care crisis or provide more money for the NHS, but it might remove some pinch points in the current system.

Burnham will get a chance to put his virtual money where his mouth is at Labour’s upcoming policy conference; but the odds are that he won’t take it.

This kind of move would require huge political leadership. It would mean convincing an electorate that loves hospitals and knows little or nothing about nursing homes, mental health institutions and virtual wards that it is worth having fewer of the former in order to have more of the latter.

It is exactly this kind of leadership that those gathered at the King’s Fund want politicians to show; and which they feel they are not only not showing but actively avoiding by keeping quiet about the scale of the challenges ahead.

If things don’t change, Richard Murray, the King’s Fund’s director of research warned, the electorate will be in for a nasty shock, as trusts lay off those lovely nurses or find themselves pushed into shot-gun mergers with larger institutions.

Unfortunately, Mary Riddell argued, “politicians only want to win elections” and “if Labour can get through the election talking about Nye Bevan’s legacy” and “the Conservatives can keep things quiet until May” then “they will do it.”

By the look of it, they’ll also reap the reward in reshuffles that attract the eye and effectively divert attention from what is really going on.

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