NHS Outlook: Spending Review Announcement


NHS England Chief Executive Simon Stevens, has given an update of his five-year strategy, which was launched in autumn 2014 and is now half-way through. He announced that he is leading a review of low-value prescription items from April 2017. The intention is to work with clinicians and clinical commissioning groups (CCGs) to look at an initial selection of 10 medicines of relatively low clinical value, or priority, or ones which are readily available over the counter (in some instances, at far lower cost, such as treatments for coughs and colds, antihistamines, indigestion and heartburn medication) which together cost the NHS £128m per year.

This is welcome news to many as there has been growing concern over the justification for many low-value prescriptions which absorb millions of NHS funding every year, funding that could be spent on care, which has a bigger impact on improving outcomes for patients. While this move is an overdue and much-needed costs-saving exercise, it does not go nearly far enough.

I am a believer in the NHS and, like many, have an often-irrational reverence for it as a sacred institution. This does not make it perfect, however. Indeed, it is far from perfect.

Petronius Arbiter, a Roman official at the time of Nero, wrote: ‘We tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralisation’. Little has changed in 2000 years. From 2010’s Vision for Public Health, the establishment of NHS England in 2011 and the 2012 Social Care Bill, there have been some very unhealthy costs-saving exercises executed by hosing money at management consultants, over-administration and management restructures.

Then it all changed with the ‘New NHS’, with the formation of Public Health England and another eye-wateringly expensive change from the regionally-focused Primary Care Trusts to CCGS at local level. In 2014 we are off again with the Five Year Forward View to outline how the NHS needs to further change to improve the quality of care and meet an estimated £30b in funding by 2020/21. Not enough though; a £3.8b above-inflation increase is announced in 2015 for the NHS in England, along with measures for easing pressure on local authorities with responsibilities for delivering social care. And then, a further set of high-profile interventions are announced to ‘reset’ the NHS finances to tackle an increasing provider deficit of £2.45b.

There does seem to be some costs-saving potential derived from the Five Year Forward View, however, Stevens’ announcement may mark a real sea change in NHS streamlining. As well as cutting funding for fish oils and suntan lotions, the announcement includes a £20m-a-year cap on new drugs cost. This means that both widely-used and expensive but effective drugs that breach the £20m a year threshold will face a secondary review process. Not great news for drug makers or innovation but it is a move that will certainly save money, at least in the short-term. The NHS will be able to stop the 90-day timeline and extend negotiations with the drug provider to lower the price. As a safety net, NICE will have the power to allow restricted use to patients deemed most in need during this process.

Reality is biting the NHS harder each year as people are living longer and more treatments come available to keep them doing so. Last year, £16.8bn was spent on drugs by the NHS, up from £13bn in 2011. As well as introducing the cap, NICE has also agreed to a fast-track process for cheaper drugs.

Progress? Possibly, but it remains to be seen. Throughout so much change and despite the thousands of meetings, advisory panels, advisers and change management gurus, homeopathic medicine remains available free in some areas, paid for by the NHS . You do the math.