Innovation in European healthcare – what can Sweden learn? - LIF

The NHS, must deliver efficiency savings of up to £20
billion by 2015 in order to remain economically
sustainable
• These savings have to be delivered through the NHS quality and efficiency improvement work, known as
the Quality, Innovation, Productivity and Prevention (QIPP) challenge, or the Nicholson Challenge
• In order to support the Nicholson challenge, the DH has worked with SHAs to develop savings plans at a
regional level. It has also used national policy tools such as a two year pay freeze for NHS staff and the
reduction in hospital tariffs.
– At a local level, providers and commissioners are encouraged to work together to increase productivity and reduce input costs by
redesigning services to achieve the same or better outcomes, or by securing the same services for a lower cost.
Concerns about the Nicholson Challenge
• In the financial year 2011/12, the first year of efficiency savings, ministers have claimed that the NHS in
England has achieved productivity gains of £5.8 billion, including from freezing staff pay and cutting back
fees that hospitals receive.
• However, the National Audit Office (NAO) who monitors public spending, has recently raised doubts about
these claims, indicating that it can only verify £3.4 billion of the £5.8 billion supposedly achieved.
• The King’s Fund concludes that the NHS is unlikely to meet the Nicholson Challenge after surveying 45
NHS finance directors about the performance of their organisations.
• Regardless of the current year’s achievements the major savings were achieved through the easiest means
of reducing hospital tariffs and freezing pay. It is next year (2013-2014) that is of concern.
• The two year pay freeze will end in April 2013, and an average increase of 1% in staff pay is expected,
adding 400-500 million in NHS expenditure.
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