Lord Carter’s plans for saving the NHS £5bn a year

Lord Carter

It’s been dubbed the most ambitious ever plan for efficiency savings in the NHS. There has been speculation that it is undeliverable.

But amid all the debate about the planned £22bn of annual savings by 2020 in the NHS in England, one man has been rooting around the system working out how some of it might be achieved.

Now he has come up with a new set of proposals, some surprising, some controversial.

Lord Patrick Carter, a Labour peer as it happens, is advising Health Secretary Jeremy Hunt on how hospital budgets can be better spent.

‘Variations in care’

In June he said up to £5bn a year could be saved annually by 2020. In his first report then he argued that some of it could be delivered by smarter procurement of hospital supplies and some by better management of staff rosters.

Now he has attempted to put more flesh on the bone, outlining other areas which could contribute to that £5bn figure.

In a nutshell, Lord Carter believes that just as there is variation in levels of care around the NHS, as identified by the Care Quality Commission, there are also variations in the use of money by hospitals – some are doing it well and providing good value for the taxpayer, some are not.

He is a firm believer in good leadership leading to high-quality patient care and the most efficient use of resources.

If hospitals all adopted the best practice for different surgical procedures and treatments, he argues, then outcomes for patients would be better and money would be saved.

One Reply to “Lord Carter’s plans for saving the NHS £5bn a year”

  1. The Institute for Healthcare Management (IHM) has urged caution in response to the recommendation of the Carter report on hospital efficiency, that NHS acute trusts cap management and administrative spending at 7% of income by April 2018.
    Lord Carter’s report states that there is “inexplicable variation” in these costs between trusts, ranging from 6% to 11%, with the mean average management spend at 8%. The report estimates that £350-450 million could be saved nationally if all trusts operated at the recommended 7%. The report also contends that a total of £5 billion of efficiency savings can be made by acute trusts by 2020, including up to £1 billion through better procurement practices.
    We must be wary of applying a ‘one size fits all’ approach or setting arbitrary targets for trusts that may be operating in markedly different circumstances. We must be doubly wary of creating a ‘race to the bottom’ on management costs, and of casting management spending as waste that is necessarily to be minimised. Recent research has suggested the NHS is in fact under-, not over-managed. We should avoid creating a situation where trusts are prevented from investing in and developing the management talent that is crucial to their future success and sustainability. Management spending should only be capped if and when there is a demonstrable link with underperformance. However, the need to make further efficiency savings in the acute sector is clear for all to see, and Lord Carter makes a number of broad-ranging and helpful recommendations to this effect. Rectifying the ‘systematic failure’ of the NHS to utilise its collective buying power in procurement provides a particularly glaring opportunity.
    Shirley Cramer CBE, Chief Executive of IHM

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