What do we mean by integration and will it help meet the Nicholson Challenge?

“If commissioning is experienced by clinicians as something that’s done to them by managers, it won’t work,” Stephen Dorrell told Care Conversation delegates. This was why the Health and Social Care Act supported greater clinical and local authority engagement in commissioning, he said, alongside the transfer of public health from the NHS to local government.

None of this, however, came close to “justifying any of the rhetoric about the Act, either for or against”. Much of the Act was effectively “re-legislation”, he pointed out, and his main regret regarding “arguments we’ve had before” was that they were a diversion from the far greater challenges facing the sector.

“When the government published its spending plans in 2010, it said the NHS budget would, effectively, not grow in real terms over the course of the Parliament, and resources for healthcare delivery will not grow in real terms in the foreseeable future,” he told the seminar. “That’s the real challenge – an underlying annual growth of 4% in demand, met with a 1% trend growth in efficiency that’s been the same since 1948.”

This growth of demand would, as in comparable countries, continue at the same rate, as people were living longer and expecting more from services. “This inexorable rise in demand is a demographic fact. The rate of growth of efficiency, therefore, needs to be 4% per annum. We’re talking about the largest single sector of the UK economy and an organisation that in no single year in its history has increased productivity growth by more than 2%.”

No healthcare system anywhere in the world had ever managed 4% productivity growth in a year, he added. “This is a huge challenge that we’ve taken on” – the “Nicholson challenge”, as it was first articulated by NHS chief executive David Nicholson under the previous government. It remained, however, something that “people haven’t really begun to internalise or understand”, he said.

“So if you’re setting out to do something genuinely unprecedented, it needs to be about a fundamental change in the way care is delivered, and to recognise that it’s not just a challenge for the NHS, it’s a challenge for the health and social care sector as a whole.” To think about the health and social care sector as two separate functions was to “divert you from the experience of patients”, he told delegates.

The National Audit Office had estimated that 30 per cent of non-emergency hospital admissions were avoidable, he said, “if we made real the commitment to engaging in prevention and early intervention”. Instead, the system simply reacted to events. “If you end up in a fracture clinic because a grab rail wasn’t installed, then that costs the system £10,000 instead of £30, as well as causing needless pain and suffering.” Creating more joined-up thinking, linking the different parts of the system and engaging with early intervention were vital, he said, as was improving community-based services to ease the pressure on acute services.

One of the sector’s “big curses” was politicians coming up with new ideas and “thinking all the problems will go away as a result”, he said. “There’s no magic bullet, but equally there’s no point saying ‘we’ve got 28 priorities’, because then there are no priorities. The object is to change the way care is delivered, and that’s what commissioning is about. They hold the budgets. As long as you have different budgets – if what you want is a joined-up service that addresses the need for change – you’ll have perverse incentives.”

Service re-configuration would require a lifetime commitment, he stressed. “It has to be a way of life, and that means freeing the care model from traditional structures. Healthcare is part of the UK economy. It’s different because we want access based on need, but beyond that it’s another economic sector and it should be able to learn from innovation elsewhere. A commissioner is responsible for spending public money and should consider any alternate way of meeting the objectives of quality of care to patients and value for money for taxpayers – who are the same people.” These arguments also needed to be properly explained to the public, which was why engaging the clinical community and local authorities was so important.

There would always be people who held different views, he said. “But the price of failure is inability to deliver the objectives we all have for the system. This is not about managing the present system more cleverly. If you want to use resources more effectively, we need to re-shape the way care is delivered.”