Innovation and efficiency

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Health Secretary Jeremy Hunt's speech to the King's Fund.


Here at the King’s Fund, in November 2012, I made the most important and difficult speech I’ve made as Health Secretary.

It was in the run up to the publication of the Francis report.When I described the problems at Mid Staffs and across the NHS I used words never used by a Health Secretary before – I spoke of the ‘normalisation of cruelty.’

But rising to the challenge of Francis has not been the only thing the NHS has had to cope with.

We’ve also had the deepest recession since the second world war with unprecedented austerity. At the same time an ageing population has given us nearly one million more over 65s than at the time of the last election.

This triple whammy has created perhaps the toughest financial climate for the health and social care system in its history.

Four pillars

Big challenges. Which call for big solutions.

Solutions that involve us all, owned not just by politicians and NHS leaders, but by doctors and nurses on the frontline.

Solutions that improve care and reduce cost at the same time - better care for patients and better value for the taxpayer.

And solutions that are sustainable because they go with and not against the grain of core NHS values.

So today I want to outline the four pillars of the government’s plan for the NHS – and how we intend to make a reality of the NHS England

Five Year Forward View

And I will be brave: by saying I am increasingly optimistic that working together we can build a historic new compact across the NHS which not only achieves the Forward View’s £22 billion of efficiency savings but also delivers higher quality and safer care to an ageing and increasingly demanding population.

So what are the four pillars of our plan?

Firstly to recognise that a strong NHS needs a strong economy.   This is not a political point but economic reality. Much of the current pressure was caused by an economic crisis. The way to relieve that pressure is both to end the crisis and to make sure it is never repeated. As the Forward View makes clear, the only way to grow the £113 billion NHS annual budget is to make sure we have an economy generating the tax revenue to finance it.

The second pillar is something you have championed for many years at the King’s Fund: the need for integrated care closer to home as the heart of our response to an ageing population.

Within the next 2 decades the number of over 80s will double to over 5 million. The care they need is different: proactive, out of hospital care focused on prevention and management of illness – rather than a narrow focus on emergency care when it is too late.   So in the last year we have been taking important steps: a proactive care programme which commits GPs to additional care for their most vulnerable patients; named GPs personally responsible for the care of individual patients, starting with over 75s this year and rolling out to everyone next year; and two weeks ago the £5 billion integration of health and social care through the Better Care Fund. 151 local plans to improve out of hospital care including sharing medical records, jointly commissioning social care and jointly working to reduce emergency hospital admissions.

The third pillar of our plan, is something I want to spend some time on today. How do harness innovation and value for money to improve care and make the Forward View’s £22 billion of savings?


Innovation is not alien to the NHS.

It has had more “world firsts” since its creation in 1948 than any other publicly funded health system, including the first baby born by IVF in 1978 at Oldham General; the first ever heart, lung and liver transplant at Papworth in 1987; and the link between lung cancer and smoking, discovered at NHS hospitals by Sir Richard Doll in the 1950s.

But scientific innovation has not been matched by process innovation. We have not built a system that is good at adopting and rapidly diffusing new ways of doing things. Given that much innovation saves money as well as lives, we need to change the NHS from a lumberingly slow adopter of new technology to a world class showcase of what innovation can achieve.

Today I am taking an important step towards making that change.

Alongside colleagues across the health and care system on the National Information Board, I am setting out a plan to achieve personalised, 21st century healthcare for the whole NHS. We will not do this through bureaucratic top down initiatives but by encouraging and diffusing local clinical innovation. And harnessing the most powerful driving force for innovation we have: the power of individual citizens who care about their own health.

From next spring you will have online access to a summary of your own GP record, and access to the full coded medical records by 2018. By 2018, as well as access, you will be able to record your own comments. This means everyone will be able to create and manage their own personal care record.   From next April you will be able to book GP appointments online and order repeat prescriptions without having to go into your local surgery.

By 2018 a paperless NHS will ensure you only have to tell your story once: if you consent, your electronic care record will be available securely across most of the health system, and by 2020 across the whole of the health and care system, so that, when you need care, different health professionals have instant access to the information they need. This has already started with one third of A & E departments now able to access GP records and one third of ambulance services able to do so by the end of this year.

From next 2016 NHS England have said you will also have access to trusted NHS health ‘apps’ and social networks – so that you can monitor your own health, or join a virtual community of friends, family or other patients who can support you.

Personalisation and prevention

We know in other sectors technology has made personalised service economic to deliver – whether it is home banking, on-demand TV or personalised Christmas cards.

But in healthcare that is only the tip of the iceberg.

More personalised, responsive and joined-up care becomes possible with shared electronic health records.

But in healthcare, technology also unlocks personalised cures for illnesses. We know that diseases like cancer and dementia are not single diseases, but infinitely complex variations on a theme. We also know that it is often not economic – under current models – to develop cures for rarer diseases like pancreatic cancer or infantile epilepsy.   And that is why this government has committed to make the UK the first country to sequence and make research-ready 100,000 whole genomes. We want the NHS to spearhead a global revolution in personalised medicine based on individual genetic characteristics.

But in healthcare it is not just personalised care and personalised cures that technology unlocks. It is also a revolution in prevention.

If you are a vulnerable older person being cared for by Airedale Hospital in Yorkshire, you may well be given a big red button. This sits on your armchair and to use it, there is only one thing you need to do: and that is to make sure your TV is switched on. Then if you press the button – anytime, day or night, a nurse will appear on your TV screen to ask how you are.

Incredibly simple – but incredibly effective at reducing emergency admissions by making good care accessible from inside your own home. Airedale estimates a 14% reduction in such admissions for these patients – while NHS Gloucestershire, where I was yesterday, estimate they have reduced the cost of emergency admissions by 35% for patients with long-term conditions using a similar remote monitoring system.

And this is not just about the frail elderly. Google and Novartis are collaborating on a new contact lens to help people with diabetes monitor their blood sugar levels through analysing tears.

7 million people now wear devices or use apps to monitor their own health. My own FitBit One says that today I have done 8553 of my 10,000 daily steps. In the US Kaiser Permanente are looking to integrate pedometer data into electronic health records to give physicians a better understanding of people’s prevention regimes.

Too often, though, the NHS has lagged behind other countries in offering access to these kinds of products even though the NHS itself is the winner if costs are contained by preventing illness. This will not change until healthcare is commissioned holistically, so that the budget holder who pays for innovative prevention sees the financial benefits that accrue as a result.

So today I can announce that as part of a step towards becoming accountable care organisations, all CCGs will be asked by NHS England - with support from HSCIC - to collect and analyse expenditure on a per-patient basis.

CCGs will then, as co-commissioners of primary and specialist care with NHS England, and co-commissioners of social care and potentially public health with local authorities, be able to pinpoint more clearly where there is the greatest potential to improve patient outcomes by reducing avoidable costs through more innovative use of preventative measures.


But alongside personalisation and prevention, there is a third “p” that is vital if we are to embrace innovation – and that is the protection, protection of personal medical data. If we lose the confidence of the public that their data is safe none of this will be possible.

So we need to be as robust in protecting personal data as we are ambitious to reap the benefits of sharing it.

This year’s Care Act put in place a number of measures, controls and independent oversight of the use of personal data. New data security requirements will be published by October 2015 and mandatory for all providers of NHS care.

But today I am going further.

Just as we now have a Chief Inspector of Hospitals to speak without fear or favour about standards of care, I am today announcing the establishing of a new National Data Guardian to be the patient’s champion when it comes to the security of personal medical information.

I am delighted that Dame Fiona Caldicott, who has done so much outstanding work in this area, has agreed to be the first National Data Guardian for health and care. She has agreed that it will be her responsibility to raise concerns publicly about improper data use. And organisations that fail to act on her recommendations will face sanctions, either through the ICO or the CQC, including potentially both fines and the removal of the right to use shared personal data.

I have already asked Dame Fiona to provide independent advice to me on care.data. No data will be extracted from GP practice systems – including during the ‘pathfinder’ pilot phase of the programme – until she has advised me that she is satisfied with the programme’s proposals and safeguards.

I intend to put the National Data Guardian on a legal footing at the earliest opportunity, but even before that the CQC and the ICO have committed to pay special attention to her recommendations, including sanctioning organisations where they find breaches, that do not comply with Dame Fiona’s recommendations, even before any new legislation is passed, so patients will benefit immediately from a much tougher and more transparent regime.

Reaching the £22 billion

A more personalised service that helps people stay healthier is not just what people want: it also reduces cost.

The banks have persuaded more than half of us to bank online. And in doing so cut their own costs by an impressive 20%. By embracing the lower costs of virtual shopping, websites such as Amazon deliver products more conveniently but also more cheaply too. Skype is not just handy – it means international calls are free. Higher quality and reduced cost at the same time.

And likewise this has happened in healthcare, where the Veterans Association estimates that a fully integrated, digital system including accessible electronic health records, remote monitoring, and online consultations has saved $3 billion over 6 years.   It is, now difficult, of course, to predict exactly what the savings might be for the NHS – but to give you one example, if better care at home reduced the cost of emergency admissions by 30%, we could save £5 billion by 2020. A one year delay in the onset of dementia would save £1.5 billion. Money that can be reinvested in more frontline staff and more preventative care, creating a win-win for patients and staff alike.

The Forward View £22 billion savings challenge

But there is also a lose-lose which we are grappling with now.

Because every pound wracked up in deficits is a pound taken away from patient care, which is why maintaining financial balance is vital.   But true financial sustainability means rethinking how we spend money not just day-to-day but more fundamentally. Just as in 2009 Sir David Nicholson set up the Nicholson Challenge to save £20 bn this parliament - something that has largely been delivered - so the Forward View sets up a £22 billion challenge for the next parliament.

The challenge may be similar but the way we deliver it will change. As the Forward View makes clear, long-term pay freezes are unlikely to be viable if the NHS is to retain the staff it needs. But as before we will need a combination of national and local initiatives, so today I want to outline 10 savings challenges we can help NHS organisations deliver, challenges which between them could save between £7 billion and £10 billion by 2020.   The first challenge is safer care. Last month, at Birmingham Children’s Hospital, I spoke about the huge cost that is placed onto the NHS by poor quality and unsafe care. A single avoidable fall costs the NHS £1200 because of the longer hospital stay it causes; but we also know avoidable bedsores cost the NHS £50m and orthopaedic surgery infections cost between £2-3m every year. A report by Frontier Economics, bringing together the available evidence, suggested that the total cost of preventable harm in the NHS may be between £1 and £2.5 billion.   One of the areas identified by the Frontier report forms the second challenge: ensuring the safe, effective and optimal use of medicines. Last week, the Academy of Royal Medical Colleges estimated that adverse drug reactions resulted in costs of £466 million through additional bed days. This may be the result of prescribing errors. Or clinicians may not know that a patient has an allergy. And some patients, particularly those taking multiple medicines, may find it difficult to take the right doses at the right times. The report argued a further £85 million of savings could be found by prescribing lower cost statins, without impacting on patient care.   So poor use of medicines is connected to the third challenge: the £300 million of waste each year in primary care from unused drugs, half of which could be avoided according to a study by the University of York and the School of Pharmacy. We have already started to help systems tackle these issues through the roll out of e-prescribing systems using the Safer Hospitals, Safer Wards fund, and through more one-to-one pharmacist consultations as part of the New Medicines Service. But there is much more to do to support patients and clinicians to get the best outcomes from medicines.   The fourth challenge is procurement. The NHS spends almost £15 billion each year on medical equipment, devices, office supplies and facilities. Prices for surgical gloves vary from £2.43 to £5.44 across the NHS, and the NAO found variation of up to 183% in the prices paid by Trusts for the 100 most commonly ordered products. So we have established the Procurement Efficiency Programme, led by Lord Carter, which aims to deliver savings of at least £1.5 billion from the NHS procurement budget from next year.

Mid Cheshire Foundation Trust made savings of 9% on their orthopaedic wards and reduced clinical time spent on stock management by 74% by embracing modern procurement and stock control principles, and I am confident we can make similar changes across the NHS by collecting and sharing data, getting a grip on stocks and supplies, and helping providers with central frameworks and core lists to purchase common products.

My fifth challenge is agency staffing. Agency staff can be an essential way to fill difficult gaps quickly and to ensure that services continue to be delivered. But we know that a Band 5 agency nurse can cost three times more than a permanent member of staff. And data from University Hospitals Birmingham suggests that high use of temporary staffing can be a sign of poorer quality care, something that Professor Sir Mike Richards has also noted during his inspections. The amount being spent by trusts on agency fees has gone beyond a sensible response to new staffing levels required by Francis and become an unacceptable waste of money.

So we are supporting Trusts by publishing a new toolkit to help reduce spend on agency staff. And we will bring down these costs further by working with providers to improve their processes and challenge agencies that are ripping off the NHS and the taxpayer. We know it is possible - Taunton and Somerset Foundation Trust, for example, saved £2.5 million by introducing clear rules for hiring agency staff and using electronic rostering.

The sixth challenge is on surplus land and estates. In many areas of the country the NHS owns buildings and land that it no longer requires, as care is increasingly delivered in the community or in people’s homes. There is huge potential for that land to be used for better NHS primary care facilities or indeed housing and schools – whilst at the same time, reducing NHS overheads and generating cash for reinvestment in NHS services. The London Health Commission estimated that the total value of surplus estate in the capital alone was worth £1.5 billion.   The seventh challenge is to ensure that visitors and migrants pay a fair contribution to our NHS. Government and the NHS need to ensure that, where people need to pay for their care, every effort is made to recover the charges. Independent research from Prederi suggests that up to £500 million can be recovered from visitors and temporary migrants accessing NHS services. That would be enough to pay the salaries of almost 10,000 nurses. To do this we are providing financial incentives to trusts to promote the identification of people who should be paying for their healthcare. Identification will also be made simpler through details listed in healthcare records of visitors and migrants. 

The eighth challenge is back office costs. The health system is on track to reduce its administration costs by one third over the course of this Parliament, which will save £1.5 billion – and we are committed to save a further £300 million in next year including through shared services and bearing down on estates costs in the department and its agencies. All of these savings go back to supporting frontline care. But it is vital that the NHS continues to look at how it can reduce back office costs in order to support better patient care and these could produce an around £0.5 billion of savings.

The ninth challenge is to come up with more solutions ourselves by reducing the £500 million plus we spend a year on management consultants. We have the ideas and people inside our NHS to deliver the change we need. It is our doctors, nurses, healthcare assistants and managers who will create a sustainable NHS but we won’t grip this if we try to subcontract the challenge of working out the solution. The final challenge is a personal priority of mine: making better use of IT to free up time for frontline staff. A study by the Health and Social Care Information Centre found that 66% of a junior clinician’s time is spent finding, accessing and updating patient notes – compared to just 24% on patient contact. Electronic records systems could make a real difference in freeing up time to care for patients. And that is why I want all clinicians in primary, urgent and emergency care to be operating without the use of paper records by 2018.

Taken together these changes could save a significant part of the Forward View’s £22 billion - and combined with local innovation we can surely find the rest. But some of them are not new - so why am I optimistic we can deliver them this time round?   Because I think the Department of Health has learned that simply coming up with an initiative and hoping to “roll it out” from the centre is rarely successful. These challenges will only be achieved if we construct and implement them with the full support of NHS organisations and their frontline staff.

So I want to do something different this time.

I want to build on the consensus around the Forward View to develop a compact around both the amount and the way we embrace innovation and efficiency to deliver the savings needed. A compact between the bodies leading the NHS and NHS organisations themselves. And a compact that goes on to be translated at a local level to agreements between Trusts and their own staff as to how we are going to improve both care and efficiency at the same time.   ##Fourth pillar

So that’s the third pillar is a compact to deliver real change in the way the NHS embraces innovation and efficiency.

But there is a fourth pillar, perhaps the most difficult and important of all. And that is to make sure we get the culture inside the NHS absolutely right. We can make the investments, find the efficiencies, we can even invent new cures – but if those changes are delivered without the right culture of safe, compassionate care they count for little.

I will return to this on another occasion, but let me leave you with a thought about the two biggest areas of culture we still need to improve. First of all safety: why in healthcare is it somehow acceptable that one in twenty deaths are avoidable? In the NHS in England that is 1000 avoidable deaths every single month. I want us to be the first country in the world that aims to eliminate avoidable deaths in healthcare with the same standards of safety they have in the airline, nuclear or oil industries.

And we will do that by nurturing a new culture in which the main driver of performance improvement is not endless new targets, but a culture of openness, transparency and continual improvement through peer-review.

And the second area we need to think about is accountability. Still too often in the NHS it is hard for patients to see where the buck stops. Whether it is frail elderly with complex conditions, adolescents with severe mental health trauma, inside hospital or outside we still have a system where corporate goals trump responsibility for individual patients. Patients will never be at the heart of our system until we have professionals truly accountable for making that happen patient by patient, person by person.


So ladies and gentleman it has been a longer speech than normal, even for a politician.

But I wanted, in the wake of the Forward View, to put some flesh on the bone with respect to the government’s response and the plan we want to work with you on for delivering for the NHS.

I’d like to finish then on a note of optimism: we are not alone as a country in facing these challenges. But if we implement the plan I have outlined this afternoon, we will be the first country in the world to do so across an entire health economy.

A properly funded healthcare system backed by a strong economy.

New models of care appropriate for an ageing population with the safe sharing of data.

Innovation and efficiency that both saves money and puts patients in the driving seat for their own healthcare.

And a culture of safe, compassionate care where patients always come first.

And an NHS that turns heads across the world as it blazes a trail for 21st century healthcare.

Thank you very much.