Minister calls for NHS to trim costs by £10bn

UK Health Secretary Jeremy Hunt has challenged NHS leaders to rethink the way its £113bn budget is spent, outlining a series of measures that he says could save the service up to £10bn year.

In a speech delivered at the King's Fund yesterday, Hunt said that 10 critical measures could address a sizeable chunk of the £22bn savings drive promised in the NHS Five Year Forward View by NHS England chief executive Simon Stevens.

Published last month, the Five Year Forward Review warned that without extra funding and new service reforms, the NHS faces an annual £30bn shortfall by 2020.

The additional savings can come from a variety of sources, including the sale of unused NHS land and facilities, reducing the use of agency staff, cutting back on waste in the drug's budget and making sure visitors to the UK pay for healthcare services, Hunt told the King's Fund.

"Every pound racked up in deficits is a pound taken away from patient care, which is why maintaining financial balance is vital," he said. "True financial sustainability means rethinking how we spend money not just day-to-day but more fundamentally."

Avoiding poor quality and unsafe care in the NHS - for example by preventing falls or bedsores - could slash costs by £1bn and £2.5bn a year, pointed out Hunt.

Adverse drug reactions cost the NHS £466m a year in additional bed days and some can be prevented by avoiding prescribing errors, while another £85m could be saved if current guidelines on statin use are adhered to. Moreover, £300m is wasted every year in primary care from unused medicines which could be improved through greater use of electronic prescribing systems.

Procurement is another target area, and Hunt would like to cut the £15bn spent on medical supplies by £1.5bn by tackling issues such as variations in the price paid for essential items, while savings can also be made on agency staffing through the use of clear hiring rules and electronic rostering that can be used to prevent agencies " ripping off the NHS and the taxpayer".

Repurposing or selling NHS-owned land and estates could reduce overheads and generate cash for reinvestment, while enough cash to pay the salaries of 10,000 nurses - some £500m - could be garnered by ensuring "visitors and migrants pay a fair contribution to our NHS," said Hunt.

Reducing back-office costs and the money spent on management consultants could add another £1.5bn and £500m respectively in savings, and making better use of IT - such as electronic healthcare records (EHRs) will also inject efficiency into the system and save money, he added.

Hunt also wants all CCGs to collect and analyse expenditure on a per-patient basis so the data can be used 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."

"These challenges will only be achieved if we construct and implement them with the full support of NHS organisations and their frontline staff," he warned.

The Health Secretary also announced that Dame Fiona Caldicott has been named the first ever National Data Guardian.

Creating a "patient's champion" to keep an eye on the security of personal medical information is essential given the government's pledge to deliver digital health records for every UK patient by 2018.