Forward view analysis: The new Stevens deal

The NHS Five Year Forward View published by NHS England neatly demonstrates both the vital role and the strict limits of politics as a force for good in health and care.

First, the inescapable truth: politics determines resources.

No society on earth believes that health and care services should be provided exclusively on a self-pay basis.

In every country questions of funding, and therefore access, are overtly political: it has been the dominant political issue in the United States at least since Barack Obama first proposed healthcare reform in the 2008 presidential election; it played an important part in the manifesto of the Bharatiya Janata Party in this year’s Indian general election; and funding for NHS and social care services will be an important issue in the British general election in 2015.

Up against the “Nicholson challenge”

Simon Stevens played his cards skilfully on this highly political issue, building on ground that was prepared by his predecessor. The “Nicholson challenge” famously required the NHS (and, by implication, social care) to show how they were going to continue to meet growing demand without any increase in real resources.

Sir David Nicholson estimated that his challenge would require around £15bn of efficiency savings over the lifetime of this parliament. Mr Stevens has projected the same analysis over the lifetime of the next Parliament and, unsurprisingly, concluded that the cost of meeting rising demand through an unreformed system would rise to £30bn over 10 years.

‘In 2009 Nicholson could see no prospect of additional resources. Stevens seeks a different political deal’

There is, however, an important difference between the Nicholson approach and the Stevens approach. Writing in 2009, Sir David could see no prospect of additional resources, and challenged providers to meet rising demand exclusively by improving efficiency.

Mr Stevens seeks a different political deal. He argues that an improving economy can afford to make a contribution that meets around half the cost of rising demand; in return he offers a commitment by health and care providers to meet the remaining half through improved efficiency.

Seen in the longer view, the Stevens deal is that over the 10 years (2010-2020) roughly a quarter (£8bn) of the cost of growing demand for services should be met by the taxpayer, with three-quarters accounted for by sustainable efficiency gains delivered by service providers.

Decisions about the resource implications of the Stevens deal are exclusively political. They require elected officials to make choices between tax and spending priorities and commit the required level of resources to health and care services. No one should blur that message. It is overtly political and it is for the political system to give an answer.

Fitting outcomes, not structures

The clear implication of the forward view is, however, that - having accepted responsibility for the unavoidably political question - the political system should challenge health and care providers to deliver their side of the deal.

If the resources are available, it is for those providers to deliver the efficiency gains required to ensure they meet demand, and to do so while also delivering a quality of service that matches reasonable expectations.

It is the link between the requirement to deliver ambitious objectives for efficiency gain, and the requirement to improve quality levels in some services, that leads to the specific proposals in the forward view. It is simply not possible to deliver either the required levels of efficiency gain, or the required levels of quality improvement, by administrative tinkering.

‘It’s called a forward view and that is all it is; it’s not a plan’

Rhetoric about the need for more emphasis on community services, more collaborative management, and a higher priority for preventative activity is not new. Historians of the NHS can find references in the speeches of Aneurin Bevan himself; what is new is that delivery of these objectives has now become an existential challenge.

The forward view offers a menu of options; it recognises that different solutions will fit different circumstances and that it is outcomes that matter, not structures. It offers hope that there is a growing understanding that “no change is not an option”, and that form should follow function - not the other way round.

But it is called a forward view and that it is all it is; it is not a plan. It leaves the challenge firmly in the hands of service providers to deliver efficiency gains on a scale that is without precedent in any major healthcare system on the planet.

That is the sense in which it demonstrates the limits of politics; if the resources are provided, Mr Stevens says, it is for service providers to deliver. That is the “Stevens deal”.

Mark Britnell is chair and partner of Global Health Practice at KPMG