What next for the NHS?

15 July 2016

As Jeremy Hunt returns to his desk, Quentin Cole, PwC Health Industries Leader, reflects on the key issues facing the Health Secretary.

Jeremy Hunt has been running the NHS for four years now. He knows the Service inside out. There are many great things happening in the NHS. It has a fantastic workforce delivering world class healthcare and all around the country people are trying to do things differently, to use technology to improve both systems and patient care and to work with partners across health and social care to transform delivery. We have a health service with high levels of public satisfaction and one that is admired and copied throughout the world.

But there are also urgent issues that need addressing and that no doubt he will already be considering. The NHS closed last year with a deficit of circa £2.5bn. This year a large number of trusts are again forecasting significant deficits and many of these trusts are likely to run out of cash in year without support.  A large number of organisations are missing key operational targets particularly in A&E.

Up until now there has been a heavy focus on quality to ensure standards are high and to continue to improve. While this is welcome, we now face a situation whereby the Service will undoubtedly have to take significant action in order to become financially viable. Deciding what that action is, and how it is carried out will be key.

PwC works across all areas of the health service with a range of national and local organisations in areas such as operational efficiency, turnaround, transformation and strategy planning. Our work is enhanced by our Advisory Board which includes former Health Secretary, Rt Hon Alan Milburn (October 1999 – June 2003).

“Jeremy Hunt will need to get firm reassurances on the EU workforce working within the NHS - remember 10% of our doctors are non-UK EU nationals. But whether or not that happens, something dramatic is going to have to take place. New models of care mean new types of worker, new types of training and that we will have to find a way of harnessing technology so that it improves labour productivity.”

Alan Milburn

Critical to this is determining how we move from financial stability to financial sustainability. Post Brexit there are discussions around the economy and what may or may not be possible and/or necessary. The NHS would welcome obviously a further cash injection to support the pace of growth. But even if new money were to be made available it is highly likely that, given the scale of the deficit, there will need to be a reduction in the workforce pay bill over the next couple of years.

PwC’s health and care system architecture project is exploring the role of national bodies in enabling the vision of localised sustainable health and care systems that are integrated, population-based and outcome-focussed.  The project will set out a 10 year vision, describing the shape of a new settlement between national health bodies and local health and care systems.

This work has raised questions around the role and function of the national bodies and how they work together in the best interest of the local care system. It is clear that the split between quality and finance is causing difficulties and needs resolving. There is also likely to be a need for a tier of management to replace the Strategic Health Authorities (SHAs) whether that be Sustainability and Transformation Plans (STPs) or something other.

None of these changes are going to be possible without incredibly high quality, motivated and sophisticated management. The changes the care system is going to have to go through are extremely complex. For that good management is critical.

“If you are going to get high quality people to run these effectively huge organisations, then pay and reward becomes key. We need more focus on how we grow the capabilities and competencies of leadership within the system and we have to think about where we draw NHS leaders from, i.e. from outside the sector. The future is not going to be about running a local institution - it’s about running a local system and that will require a much more nuanced set of leadership skills.”

Alan Milburn

It is not an easy task ahead for Jeremy Hunt and there are many things to consider amongst them workforce, structure and leadership. But we have reached a critical moment where action will need to be taken urgently and a new and different route taken. We need to get a better balance between quality and efficiency. It has been said that efficiency without quality is unthinkable but quality without efficiency is unsustainable. We need to make the changes needed to bring sustainability back into the NHS. He will need to lead from the front.

“The most important thing is to give the NHS clear direction and clarity because clarity creates permission and then permission leads to action and hopefully the right behaviours.

Alan Miburn

Quentin Cole | UK Health Industries Leader
Email | +44 (0)20 721 26784

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