NHS Savings: where they could really be made

Britain, with its quaint attachment to the style monarchical, likes to organise its medical professionals into “royal colleges”. And there is an organisation of these organisations, called the “Academy of Medical Royal Colleges.”

This morning, we learned about its report on a possible savings in the NHS.

It seems that as much as £2.3 billion a year are being wasted on over-testing and over-treating patients. £466 million is accounted for by over-prescription of cocktails of drugs – which are associated, according to the report, with 6% of hospital admissions and 4% of hospital bed days. So reducing this kind of prescribing, far from damaging patient care, should actually improve it.

From the Academy of Medical
Royal Colleges report

The report also identifies areas where savings can be made by changing working practices. For example, according to the Guardian, the Royal Liverpool hospital has halved lengths of stay simply by requiring senior medical staff (consultants) to switch from twice-weekly ward rounds to twice-daily.

On the other hand, I’m not so sold on the idea that we test too much. I’ve watched too many conditions fail to be diagnosed, in Britain, for want of carrying out simple tests. The price has been avoidable suffering or even death.

In any case, today’s Guardian quoted Dr Ian Wilson, of the doctors’ union, the BMA, who pointed out that the NHS is a world leader in cost-effective medicine. “The Commonwealth Fund, a respected American health thinktank,” the paper paraphrased him, “recently rated the NHS top for both value for money and patient care out of 11 healthcare systems worldwide it studied.”

So maybe there isn’t quite as much space for saving as the Royal Colleges believe. Perhaps only part of the £2.3 billion can really be achieved.

That’s why it was fascinating that it was also today that I read a letter sent by an MP to a constituent who had asked about the interest being paid by the NHS for “PFI” projects. The Private Finance Initiative was, shamefully, introduced by a Labour government. It was designed to push the NHS to raise finance from the private sector, for such projects as building new hospitals. It had the convenient effect of removing the loans from the total of government borrowing. 

Sadly, this wonderful advantage in pure bookkeeping was offset by a bit of a downside in the real world: it cost a great deal more in interest.

Labour introduced this wheeze, but the Conservatives, so keen on privatisation, though they denounced it in Opposition, haven’t touched it in office.

And what did the MP’s letter say?

In 2014/15, the NHS in England had an estimated £1.89 billion to pay in PFI unitary charge payments, and £1.95billion in 2015/16.

I’m sure there are savings to make by cutting out over-treatment and over-testing, or from changing work patterns. But how about eliminating that charge? It buys strictly nothing. And costs a lot.

So here’s an idea for government: suck it up and absorb that borrowing into the public debt, to free the NHS of the interest payments.

Don’t hold your breath.