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Think tank report reveals 'make or break' year for NHS

A study published by think tank, Reform, has revealed that increasing costs have not been dealt with and that investment in modern services has failed

A study published by think tank, Reform, has revealed that increasing costs have not been dealt with and that investment in modern services has failed, leading to an NHS that is weaker in the long-term than just two years ago.

The report, entitled 'NHS reform: the empire strikes back,' provides a solution in the form of a three-year programme whereby the government would write off NHS debts and reform the way patient services are managed.

The programme would introduce 'rigorous financial discipline' to keep the NHS in the black. By the end of 2006, the NHS was over £500 million in debt, despite an increase in its budget. The report further warns that the NHS could be spending over £100 billion annually, which equates to more than £4,500 per household.

The lack of reform so far has markedly increased the pressures for the NHS to invest in new services, the report continues, warning: 'If services are simply closed down, this shifts patients and costs to other locations, threatening quality, access and financial stability. Reductions in some deficits could then lead to increases in others, in a kind of deficit see-saw.'

The report outlined key failures in 2006:

  • Failure to control costs

  • Rising deficits

  • Deceleration of reform

  • New evidence of cutbacks on innovation, increased rationing and lengthening waiting times

    • A six-point programme to bring choice, competition and pluralism was set out by the report:

    • There should be a general move toward Independent Foundation Trust status for providers

    • Monitor's role should be expanded to that of an economic regulator

    • The funding of primary care services should be turned into a payment or voucher, which an individual could take to any approved primary care provider

    • Patients would sign up for three-year periods and could freely change after that.

    • There would be new kinds of private/public partnerships in certain care areas where the NHS was not providing a credible service, as in audiology where there would be use of direct payments

    • There would be a changed approach to staffing with moves towards a smaller, better supported workforce and in capital which would stress smaller projects related to immediate income

    • The Department of Health reacted to the report by saying that there would be no question of deficits being wiped out and that it would be unfair for overspending organisations to be bailed out by those that underspend.

      4th January 2007

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