Austerity and quality?
Anita Charlesworth
Chief Economist
Nuffield Trust

23 October 2013
© Nuffield Trust and Health Foun...
Public and private UK healthcare spending,
1997-2011
160

20%

140
120
10%
100
80

5%

60
0%
40
-5%
20
0

-10%
1997 1998 1...
Average annual growth rate in health spending across the
OECD
15%

10%

5%

0%

-5%

-10%

2000-09
-15%

Source: OECD 2013...
The financial gap by 2021/22, assuming English NHS funding
rises as set out in the 2010 Spending Review to 2014/15 and is
...
Funding pressures on acute services in England attributable to
population change and to the rising probability of admissio...
Closing £13 billion Funding Gap: 2010/11 to
2014/15
£105

Funding pressures on the NHS in England

Funding (£billion in 20...
Funding gap in 2021/22 under three scenarios from the IFS

© Nuffield Trust and Health Foundation
Meeting the Challenge – the NHS approach
• Reducing input costs
• National public sector pay policy
• Reducing administrat...
Staff Changes in 2011-12 (Whole-time equivalents)
Change 20102012

% Change 201112

Change April
2012-April 2013

Total NH...
The link between overall spending and outcomes

Source: Joumard and others 2010
© Nuffield Trust and Health Foundation
Potential gains in life expectancy at birth through
efficiency

© Nuffield Trust and Health Foundation

Source: Joumard an...
The relationship between quality and cost at the patient or
provider level – results of a systematic review of US evidence...
Healthcare productivity growth rates: comparison of ONS UK
estimates and York University England estimates
5%
4%
3%
2%
1%
...
UK Review – Does improving quality save money?
•Poor quality is both common and costly – hospital acquired
infections cost...
www.qualitywatch.org.uk

Sign-up for our newsletter
www.qualitywatch.org.uk/newsletter
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Twitter.com/Q...
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Anita Charlesworth: Austerity and quality

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Anita Charlesworth: Austerity and quality

  1. 1. Austerity and quality? Anita Charlesworth Chief Economist Nuffield Trust 23 October 2013 © Nuffield Trust and Health Foundation © Nuffield Trust
  2. 2. Public and private UK healthcare spending, 1997-2011 160 20% 140 120 10% 100 80 5% 60 0% 40 -5% 20 0 -10% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years 1997 to 2011 © Nuffield Trust and Health Foundation Average annual real growth in Average annual real growth in public spending private spending 4.9% 3.7% Growth rate £ billions, 2012 prices 15% Private Public Private growth rate Public growth rate
  3. 3. Average annual growth rate in health spending across the OECD 15% 10% 5% 0% -5% -10% 2000-09 -15% Source: OECD 2013 © Nuffield Trust and Health Foundation 2009-11
  4. 4. 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 £137 Funding pressures on the NHS in England £132 Freeze in NHS funding beyond 2015/16 Funding (£ billion) £127 £122 £44 bn (£54 bn) £117 £112 £107 £102 £97 £92 £87 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Year Source: Roberts and others, 2012 © Nuffield Trust and Health Foundation
  5. 5. Funding pressures on acute services in England attributable to population change and to the rising probability of admission for chronic conditions Funding pressure on hospitals in England (£Bn) £68 £63 £58 Additional acute spending due to pay increases Additional acute spending due to rising probability of admission for chronic conditions Projected acute spending due to population growth 4.1% a year £53 £48 2.7% a year £43 1.3% a year £38 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Year Source: Roberts and others, 2012 © Nuffield Trust and Health Foundation
  6. 6. Closing £13 billion Funding Gap: 2010/11 to 2014/15 £105 Funding pressures on the NHS in England Funding (£billion in 2010/11 prices) Funding pressures after for pay restaint £100 Funding pressures after pay restraint and managing hospital activity for chronic conditions Pay reduction: £5bn Funding pressures after pay restraint, managing hospital activity for chronic conditions, and productivity savings Funding allocation based on 2010 spending review Disease management: £3bn £95 Acute QIPP Actions: £4bn £90 £85 2010/11 © Nuffield Trust and Health Foundation 2011/12 2012/13 Year 2013/14 2014/15
  7. 7. Funding gap in 2021/22 under three scenarios from the IFS © Nuffield Trust and Health Foundation
  8. 8. 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 © Nuffield Trust and Health Foundation
  9. 9. Staff Changes in 2011-12 (Whole-time equivalents) Change 20102012 % Change 201112 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 © Nuffield Trust and Health Foundation
  10. 10. The link between overall spending and outcomes Source: Joumard and others 2010 © Nuffield Trust and Health Foundation
  11. 11. Potential gains in life expectancy at birth through efficiency © Nuffield Trust and Health Foundation Source: Joumard and others 2010
  12. 12. 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 © Nuffield Trust and Health Foundation
  13. 13. Healthcare productivity growth rates: comparison of ONS UK estimates and York University England estimates 5% 4% 3% 2% 1% 0% 2006 2007 2008 2009 2010 -1% -2% -3% CHE Productivity © Nuffield Trust and Health Foundation ONS Productivity ONS productivity 1995-2010 Annual average growth
  14. 14. 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 © Nuffield Trust and Health Foundation
  15. 15. www.qualitywatch.org.uk Sign-up for our newsletter www.qualitywatch.org.uk/newsletter Follow us on Twitter: Twitter.com/Quality_Watch 23 October 2013 © Nuffield Trust and Health Foundation
  16. 16. www.qualitywatch.org.uk
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