Q&A: The NHS shake-up

The government is planning a major shake-up of the NHS system in England.

GPs will be given much more responsibility for spending much of the budget, hospitals are to be set free from central control and an independent board will allow the service to escape political meddling.

It has, unsurprisingly, been dubbed the most radical plan in the history of the NHS.

The NHS budget is more than £100bn a year in England

About 80% of the budget is held by local managers working for primary care trusts.

There are 151 of these in England and they are effectively in charge of commissioning local services, such as hospitals, GPs, mental health units and community clinics.

Ministers want to transfer much of that responsibility to GPs working in consortiums across the country.

Both primary care trusts and regional bodies known as strategic health authorities are to be phased out over the next few years, with funding going directly to GPs.

Yes, although not quite on this scale. During the 1990s, the Tories created GP fundholding which allowed doctors to take charge of local budgets. Only half of them signed up in the end and the budget was limited to only the most basic parts of hospital care such as elective operations like knee and hip replacements.

The latest model is far more wide-ranging.

When Labour came to power, they scrapped fundholding, believing it had divided the profession. But within a few years ministers were launching their own version.

This was called practice-based commissioning and encouraged GPs to work in partnership with neighbouring practices.

However, many doctors said they have found it too bureaucratic and so it has not taken off across the country.

Why does the government want to do it then?

Health Secretary Andrew Lansley sees it as the key to making the NHS more responsive to patients.

He believes GPs know what works best and wants to tap into their entrepreneurial spirit to drive improvement from the front-line.

If it is successful, it may also help to save money. The NHS has been told to make up to £20bn of savings by 2014.

Getting GPs to take on some management responsibility could help the health service cut the number of managers it employs.

The British Medical Association, the medical profession's trade union, has said it is "ready, willing and able" to meet the challenge.

However, doubts do remain about whether there will be enough interest in every area to get effective consortiums of GPs set up across the country.

It is also acknowledged that the policy is not without risks. Sceptics have questioned whether it is wise to give what are effectively independent businesses - GPs are not employees of the NHS in the same way other doctors are - such vast amounts of money.

Some are also critical of the idea because they see it as unnecessary upheaval and reorganisation at a time when the NHS is under pressure to become more efficient.

The initiative has long been championed by the Tories. They have hailed it as a way of setting the NHS free from political interference.

It is likely to be created from the current NHS management board which sits in the Department of Health and includes regional health chiefs.

The board will be given responsibility for setting standards and holding GPs to account. It is also expected to take charge of paying for some services which are not being given to the GP consortiums. These include dentistry and specialist services such as paediatric intensive care, which are only done in the largest hospitals.

In the future, the Department of Health could be renamed the Department of Public Health to concentrate on issues such as obesity and alcohol abuse.

Are hospitals changing too?

Yes, and potentially quite radically too. The White Paper talked about creating a "vibrant" industry of social enterprises.

Key to this is getting all trusts to attain self-governing foundation trust status - nearly two thirds have so far.

What is more, the cap on private income is to be lifted, allowing them to compete with private firms in a host of areas. This in itself is quite a significant step.

But, what is more, the government has talked about hospitals going a step further and becoming employee-led bodies as the retailer John Lewis is.

However, that would be complicated to achieve. For one thing, hospitals have considerable assets, such as buildings, which are owned by the state and would need to be bought. This would prove too expensive if they were valued at market prices.

What changes will patients see?

Visually, none. They will still walk through the doors of their local GP surgery and talk to the same staff they always do.

However, if the government achieves its aim they may find themselves with more control over their care.

Mr Lansley has said the reforms set out a vision for an NHS led by patients and professionals, not by politicians. He has said patients will be handed more choice over how and where they are treated.

They can already choose which hospital they want to go to for non-emergency operations, such as knee and hip replacements.

In the future, this choice is to be extended to GPs. Practice boundaries will be scrapped, enabling a patient to register with any family doctor they wish to.

Patients have been promised more and clearer information. Central to this will be HealthWatch, a patient body which will collate information on performance and feedback from patients themselves.

What happens now?

The government says it will be carrying out a consultation, but it already seems to be in a hurry to get going.

The White Paper includes a fairly detailed timescale for action.

This year will see GPs start piloting the plans, before full roll out is completed by April 2013. The existing management structure - primary care trusts and strategic health authorities - is likely to be abolished within three years.

All NHS trusts should gain foundation trust status by 2013 as well.

What is the situation elsewhere in the UK?

Health is a devolved power and as such the plans only affect England. None of the other countries have given responsibility to GPs on this scale.

They have traditionally relied on more input from the medical profession for the management of local services.

In Scotland, there are 14 health boards with doctors given senior roles.

Wales has something similar following a restructuring last year which saw 22 health boards and local NHS trusts merged into seven larger health boards in charge of delivering and monitoring services.

Northern Ireland has an integrated health and social care system with four boards in charge of monitoring the performance of NHS trusts.

Tory doubts over NHS funding pledge

By Norman Smith Chief political correspondent, BBC Radio 4

For all the reforms in the NHS White Paper, the one defining policy of the government towards the health service is the ring-fencing of its budget.

The Tories pledged to ring-fence health and international aid spending

Of course the NHS will not be a cuts-free zone - it is expected to find efficiencies of £20bn by 2014 - but as other government departments groan and stagger under whopping great cuts of up to 40%, the NHS will enjoy real terms increases in spending.

It is for David Cameron, seemingly, a non-negotiable policy, one designed to reassure sceptical voters that the health service is safe in Tory hands.

And yet privately many Tories think it is daft and should be dropped.

How, they argue, can the government get to grips with the deficit if the second biggest spending department, with a great hulking budget of more than a £100bn which employs a quarter of all public sector workers, does not have to bear its share of the pain.

Indeed, given the health service enjoyed a three-fold increase in spending under Labour, disgruntled Tories believe there must be much more fat to cut in the NHS than in other leaner, more efficient areas of government.

Not surprisingly, ministers in other departments are also not huge fans of a NHS ring-fence that forces them to take a chainsaw to some of their own treasured spending projects.

But it is not just about the money. It is also about the reform agenda.

How do you encourage innovation and change in the health service if you have already guaranteed NHS managers extra money for just carrying on as normal?

Even some health service experts, like the former head of NHS London Sir Richard Sykes, are critical, warning it will lead to "business as usual - thank you very much!".

And yet for all this unhappiness few Tories are willing to go public with their misgivings for fear it would be interpreted as an attack on Mr Cameron.

They have, however, not entirely given up hope of getting rid of the ring-fence. Or rather they are hoping their Lib Dem partners might be able to do the job for them.

The Lib Dems, it is noted, have always been highly critical of the policy.

Before the election Vince Cable said: "There can be no ring-fencing if we are serious about getting the public finances back on track."

So, muse Tory MPs, if it proves impossible to find the necessary savings in other departments and the markets get restless then perhaps Nick Clegg could be encouraged to tell Mr Cameron it is time to revisit ring-fencing.

After all, Mr Clegg has taken a big hit on VAT. Perhaps Mr Cameron, for the good of the coalition, should be prepared to do the same on the NHS.

And anyway, if the markets scent the deficit reduction plan is not delivering, then maybe Mr Cameron will have no option but to cut NHS spending if he wants to avoid a bit of Greek-style financial surgery.

More cautious Tories say the NHS pledge is too important to Mr Cameron. For him it is an issue of trust. They say he believes that the electorate would not forgive him if he broke the ring-fence promise.

But then again, argue Tory critics of the policy, couldn't Mr Cameron just say that the financial situation was much worse than he thought; that Labour have left the cupboard bare and the City are threatening higher interest rates unless the deficit is brought down faster?

And, oh yes, couldn't the prime minister say: "We're all in this together?"

11 June 2010 Last updated at 01:39

Are GPs up for the challenge?

By Nick Triggle Health reporter, BBC News

The government wants GPs to take on more responsibility

It was not long ago that GPs were the poorer cousins of the doctor fraternity.

Hospital specialists such as surgeons and cancer specialists have traditionally been both better paid and wielded more power than family doctors.

But now the tide is well and truly turning.

During Labour's 13 years in power, GP pay rocketed. With a new government in place they are now being asked to take centre-stage as the NHS gears up for the "age of austerity".

Andrew Lansley, the new Health Secretary, has made it clear he sees GPs as the lynchpins of his vision for the NHS.

He wants them to take responsibility for local budgets, believing they know more about what works than managers working for England's 152 primary care trusts.

It is an ambitious plan. It would mean GPs taking charge over deciding which services - both hospital and community - to fund.

Something similar has been tried before, but the profession has shown little appetite for it.

Weekend care

Mr Lansley also has his sights set on out-of-hours services. He again wants GPs to take charge, although this is not the same as providing them.

Instead, he wants them to oversee the groups - both private and NHS-staffed - delivering the night and weekend care.

And what is remarkable is that the profession, which has after all received its fair share of knocks in recent years after bumper pay rises left them open to attacks from the press and politicians alike, seems to be remarkably optimistic about the future.

The proposed changes are dominating the British Medical Association's annual conference of GPs which is being held in London on Thursday and Friday.

GOVERNMENT PLANS

Continue reading the main story

• The budget - Plans being drawn up to put GPs in charge of local budgets, allowing them to decide which community and hospital services to fund
• Out-of-hours care - GPs likely to be asked to sit on boards which will oversee weekend and night care
• Choice - Ministers want GPs to agree to scrap their boundaries to encourage more competition

They figure prominently on the agenda and are the subject of much speculation in the exhibition hall and coffee bar.

There is a real belief that the new health secretary is serious about getting doctors on board.

Dr Laurence Buckman, the chairman of the BMA's GPs committee, set the tone when he said doctors were "ready, willing and able" to meet the challenge in his speech to open the conference.

Others went even further. Avon GP Dr Mark Cocoran described Mr Lansley as the "kind of man" GPs could work with.

And Dr Brian Balmer, a GP based in the north of Essex, like many others, was excited about the prospect of holding the financial purse strings of the NHS.

"It is right that these decisions are made locally. GPs are in a great position. They are there on the front line and many have patient participation groups so can involve patients in the really tough decisions.

"There is no reason why it can't work."

But he warned the government not to force the issue on to GPs, adding: "That is sure to put people off."

However, that is not to say doctors are unanimously behind the government.

There are still many issues to be resolved, such as how GPs will be held to account if they are given this extra power and what to do in areas where doctors do not want the responsibility.

Concern

But it is the third plank of reform directly affecting GPs that is causing most concern.

The government is keen to abolish practice boundaries.

Much as the coalition has talked about freedom of choice over schools, ministers want patients to be able to register with any doctor they want, in the belief this will drive up standards by encouraging competition.

But Dr Anthony Warren, a GP from Cambridgeshire, warns it could destabilise general practice.

He says some practices may find themselves "overwhelmed", while rural centres could be harmed by losing commuters - considered essential to many practices as they tend to be the least reliant on GPs, and thus help to cover the costs of treating more complex patients.

Continue reading the main story

“Start Quote

We are optimistic, there is a new government and new opportunities”

End Quote Dr Laurence Buckman British Medical Association

"This would affect the most vulnerable," he says.

Dr Mark Sanford-Wood, from Devon, agrees. He believes the move could fragment services, as GPs work in close partnership with other community staff such as physiotherapists and district nurses.

"Locally co-ordinated teamwork is the heartbeat of the NHS. We shouldn't undermine this."

The BMA has already recognised this as an issue and has asked the government to consider what are being dubbed "fuzzy borders".

This would not entail a wholesale scrapping of the current restrictions, but would instead allow some blurring around the edges to allow some shopping around, and end cases where a move across town automatically means a change of doctor.

Perhaps the last word should go to Dr Buckman, who in his role acts as the direct link between the government and profession.

He says: "We are optimistic, there is a new government and new opportunities. But we are reserving judgement. We felt optimistic in 1997 and that did not work out as we would have wished."

How the Tories and Lib Dems could change the NHS

ANALYSIS By Nick Triggle Health reporter, BBC News The NHS has been told to make savings A fortnight ago, then Conservative health spokesman Andrew Lansley addressed hundreds of nurses at the annual conference in Bournemouth. He said his only remaining ambition in politics was to "serve the NHS to the best of my ability". He now has the chance in England as the new health secretary - but with the added complication of being part of a coalition government. While the differences in health policy between the Tories and Lib Dems - and for that matter Labour - are not what they were a decade or so ago, there still look to be a number of tricky hurdles for Mr Lansley and his yet-to-be appointed team of ministers. In the short-term much of the reform programme will be put on the backburner. Instead, it is likely the only issues that future ministers will spend time hammering out in the next few months will be those that affect the budget. Coalition policies Conservative pledge of real term increases in spending on the NHS every year maintained - but expected to be little above inflation No mention made of how to pay for future care of the elderly The NHS has already received its allocation for this financial year - it has got a rise in excess of 5% bringing the budget over the £100bn mark. But the fact remains the health service is responsible for nearly a fifth of government spending - and so cuts and savings will have to be made in coming years to help the wider economy. The Conservatives were actually the only party to promise to increase the NHS budget above inflation after 2011. However, in reality any increase would be small. Indeed, none of the parties have disagreed with the head of the NHS, Sir David Nicholson, who has asked the service to make up to £20bn of savings by 2014 to help keep pace with the rising demands from new drugs, the ageing population and lifestyle changes such as obesity. That is about 5% of the yearly budget - quite a challenge for a service that has seen productivity fall each year over the past decade. Michael Sobanja, chief executive of the NHS Alliance, which represents NHS staff who work outside hospitals, says money - or rather the lack of it - is the over-riding challenge. "The most significant area that affects this is staff - headcount, pay and pensions. There is no getting away from it." But if the coalition does continue in the longer-term - the two parties have said they want to serve a full five years - the scope for joint policy formation does expand. Potential conflicts A quick glance at their current positions however does not throw up too many possibilities. Areas of conflict Public health - Disagreement over alcohol minimum pricing GPs - Shared vision of giving people greater choice but the Tories, unlike the Lib Dems, want to give family doctors a much greater role in commissioning local services Targets - Tories want to scrap so-called process targets, but Lib Dems share Labour's desire to see them remain Social care - Tories want a voluntary system, but the Lib Dems favour contributions from everyone The Tories wanted to create an independent NHS board to run the health service and change the Department of Health into the Department of Public Health. But that is at odds with the Lib Dem vision of putting the power into the hands of local people through directly-elected health boards. Meanwhile, the Lib Dems have supported minimum pricing for alcohol. The Tories are, however, implacably opposed. On targets, there is disagreement too. The Lib Dems, like Labour, back the idea of creating patient guarantees for cancer treatment and hospital operations. Andrew Lansley, now health secretary, spent much of the election campaign criticising them as "damaging and perverse" and promising to abolish them. Social care Perhaps the biggest casualty - and probably most far-reaching - will be social care. Lib Dem health spokesman Norman Lamb has worked hard in recent months to try to build consensus over the issue of funding. His team indicated he had been willing to support the Labour plan for a compulsory levy to create a National Care Service. But the Tories have made it clear, particularly in recent weeks, that they were opposed. They want to see a voluntary insurance scheme despite Lib Dem insistences that such models never get high enough take-up to work. The result could be that the status-quo - the means-tested system - remains in place. Jeremy Taylor, of National Voices, a coalition of charities and patient groups, says that would be a disastrous situation for some of the most vulnerable people in society. "The system is unfair and chaotic. People can't get access. But it is a difficult, expensive and politically sensitive issue and the danger now is that the momentum gets lost." Nonetheless, others are hopeful that once the government settles in changes may happen. Professor Alan Maryon Davis, president of the UK Faculty of Public Health, says: "Both parties have talked a lot about public health and I think in time we could see something happening." Professor John Appleby, chief economist at the King's Fund health think tank, agrees. "There are very few policies that are the same at the moment, but you can see some areas where they could find common ground. You could imagine something being done to stop below cost pricing for example rather than a minimum price. We will have to see." But he says the big unknown, events, as Harold McMillan famously said, could end up determining the actual areas of agreement. "You never know what will happen and it could be that new issues which crop up will be where they find themselves really working together."   Page last updated at 12:38 GMT, Thursday, 22 April 2010 13:38 UK E-mail this to a friend Clashes over hospital cuts By Nick Triggle Health reporter, BBC News Money is expected to be tight in the coming years Cuts to hospitals took centre stage in a health-themed election debate. Maternity, children's and A&E units are currently being revamped in England. But health secretary Andy Burnham accused the Tories of being insincere by promising to put a temporary ban on changes if they win power. Shadow health secretary Andrew Lansley had argued that some of the plans were against patients' interests while the Lib Dems wanted local residents to be given more of a say. The three health spokesmen were sharing a platform in an event jointly hosted by the British Medical Association, Royal College of Nursing, Kings Fund and NHS Confederation. Reform of hospital services has been underway for a number of years to create centres of excellence which are supposed to be more efficient and provide better care at the same time. It involves locating special lists of services in fewer places and is leading to some smaller hospitals losing high profile departments. Mr Lansley said he was not against change but said proposals needed reviewing to ensure they were not "against the interests of patients". But Mr Burnham said, "you are saying what people want to hear". As Mr Lansley tried to explain his stance, Mr Burnham said "he had got himself into a large hole". Tough decisions The health secretary said his party had made difficult decisions while in power including making changes in his own back yard - in reference to changes to children's and maternity care in Greater Manchester. Lib Dem health spokesman Norman Lamb suggested local residents needed to be more involved in decisions. "The decision should be taken by bodies that are democratically elected." Clear differences also emerged in other areas. Mr Lamb gave his backing to minimum pricing for alcohol, but both of the others were against such a move. Meanwhile the Tories defended their policy of proposing a voluntary insurance system to provide care to elderly and disabled people. Both Labour and the Lib Dems favour a compulsory levy. Tories rule out forced NHS closures By Branwen Jeffreys Health correspondent, BBC News Mr Cameron says he wants to give patients "a real choice" Conservative leader David Cameron has ruled out the forced closure of A&E and maternity wards in the party's manifesto for England. It is a move likely to be popular with local campaigners, but which will dismay some health experts. Reorganisations of hospital services which have already happened would remain unchanged. Others in the pipeline, including several large-scale plans for London hospitals, would be reviewed. In August 2007, David Cameron promised the government a "bare knuckled fight" over the future of local hospitals. But critics say some closures are needed. The new chief executive of the King's Fund, Professor Chris Ham said: "It's pretty clear to most people you can't freeze existing services in their current pattern. This is not primarily financial, but about patient safety and to ensure they get a good experience, and that the NHS delivers the best possible results." The promises The manifesto confirms several plans already announced including scrapping top-down Government targets, such as waiting times for treatment. The Tories have previously said they would instead move to outcomes - in essence a target that is about results not about how much the NHS done. These have included increasing five-year survival of cancer to above EU average by 2015 - something that could only be measured with time. The Conservatives say that by making NHS staff more directly accountable for their performance, NHS administration costs can be cut by a third as "expensive layers of bureaucracy" are removed. Elsewhere the creation of an independent NHS board is confirmed for the day-to-day running of the NHS, which will have power over how money is spent. So is the policy of a one off £8,000 payment for residential costs. The Tories also pledge a Cancer Drug Fund to allow doctors to prescribe new medicines which might fail to pass the cost restrictions of the rationing body the National Institute for Health and Clinical Excellence. This would benefit patients with rare cancers, for example. They promise to ensure every patient in England has access to a GP 8am to 8pm seven days a week. This is something already happening or is due to soon with every area in England having a GP-led health centre is either open just those hours. And they say it would be up to GPs to organise how they offer care out of hours - something many doctors gave up when they signed a new contract for family doctors in 2004. This would mean renegotiating the GP contract. Commenting on the manifesto, Dr Hamish Meldrum, Chairman of BMA Council said: "The idea of being able to see a GP from 8am to 8pm, seven days a week is bound to be popular, and patients deserve good access to GP services, but this shouldn't come at the expense of the quality of a patient's overall care, which is at risk if services become fragmented. "It's also a luxury that we may not be able to afford in these financially straightened times." He said all the political parties needed to move away from a market model for the NHS in England, which wasted NHS money. Page last updated at 14:09 GMT, Tuesday, 13 April 2010 15:09 UK Labour pledge on NHS reforms Every patient going into the NHS will be screened for MRSA Gordon Brown has confirmed that every NHS hospital in England will become a foundation trust by 2015, later than originally planned. Launching the party's election manifesto, he re-affirmed pledges to give patients legally-binding rights on treatment and waiting times. The manifesto says failing trusts could be taken over by others that are more successful. Some experts suggested this could potentially be a problematic strategy. Nigel Edwards from the NHS Confederation said: "There is a lot of evidence that these are risky undertakings. "If the problems are structural rather than just bad management they can cause difficulties for the organisation doing the take-over. They would want to do very careful due diligence." GP services It also sets out commitments to more personal healthcare, and greater access to GPs at weekends and evenings. Foundation trusts Not for profit public organisations Have greater freedom to run their own affairs They only exist in the NHS in England and there are currently 129 Another 93 are yet to follow In each area of England, a GP led health centre is either already open or opening soon to provide care from 8am to 8pm seven days a week. Labour also plans to work with charities to give cancer patients end-of-life care in their own homes, if they wish. Everyone with a long-term condition will have the right to a care plan and an individual budget. However, patients who fail to turn up for pre-booked appointments will lose the right for fast-track treatment, the manifesto says. The general election manifesto confirms announcements already made that people suspected of having cancer will be referred to a specialist within two weeks, and get their test results within one week. The promise of faster test results, which was announced at the last Labour party conference, will take until 2017 to be fully available to all patients in England. A legal right for patients in England to receive hospital treatment within 18 weeks from referral by their GP came into force at the beginning of April. The target for urgent suspected cancer cases to be seen by a specialist within two weeks also became a legal right at the same time. Commenting on the launch of the manifesto, Dr Hamish Meldrum, Chairman of BMA Council said: "Patients deserve the right to have prompt treatment, but this must not override clinical priorities. "Patients should always be treated on the basis of clinical need and not according to the latest target."   Page last updated at 07:51 GMT, Wednesday, 17 March 2010 Hospitals 'should axe thousands more beds' By Nick Triggle Health reporter, BBC News The hospital bed count has been falling for decades Thousands of hospital beds in England should be axed to save money and improve care, a think tank says. Centre right group Reform said in some areas up to a quarter of beds could go. It said advances in technology and rising rates of conditions like diabetes meant the focus should shift towards more community services. The government said local health chiefs could decide, while the British Medical Association said cuts made for purely financial reasons would be "immoral". The hospital bed count has been falling for decades, but Reform's call represents a more rapid programme than has been seen in recent years. There were just under 300,000 beds in 1987, but by last year that had fallen to 160,000 as advances in treatment have meant patients do not need to spend as long in hospital. WHY BED NUMBERS KEEP FALLING Keeping people in hospital is costly. So it is unsurprising that successive governments have tried to wean the NHS away from them.. But they have only been able to do this because of medical progress which has meant patients no longer need to spend so long in hospital. For example, cataract surgery used to require a patient spending a week immobile in hospital. Now it is done in 20 minutes as day case surgery. Indeed, the rise in operations where the patient returns home the same day has been staggering. There are now about 200 different operations that can be done on a day case basis compared to only a handful 30 years ago. What is more, thanks to developments such as key hole surgery the length of stay in hospital in cases where patients are kept in has fallen dramatically too. However, the majority of the closures happened during the 1990s and the think tank believes politicians now need to be brave about pushing ahead with reform - even if that led to some hospitals being closed or downgraded. It criticised ministers and opposition parties for interfering with hospital restructuring - the Tories have even said they would have a temporary ban on closures if they won power. And Reform called for consideration to be given to cutting the NHS budget to get the public finances on a stronger footing. Patrick Nolan, chief economist at Reform, said: "Health systems around the world are gearing up to shift care out of hospitals and into the community. "Politicians would be best to engage local people in the choices facing their NHS services rather than foment short-sighted opposition to them." 'Nonsense' The think tank suggested that more than 30,000 beds could close in the coming years if all areas matched the bed to population ratio achieved in the south central region. This would mean London, the north east and north west removing about a quarter of their beds. The Department of Health said it was not opposed to reducing the bed count, but it was essential patients were put first when considering restructuring. A spokeswoman added: "The local NHS is best placed to decide how best to meet the needs of patients in their areas." The Tories agreed, adding that it was important that doctors were given a key role in the process. But Dr Mark Porter, chairman of the BMA's consultants committee, was sceptical about the suggestions. He said that, while cutting bed numbers was perhaps necessary, carrying out such a programme so quickly was "nonsense". And he added: "Cutting beds for purely financial reasons would be immoral and catastrophic for patient care."   Page last updated at 17:22 GMT, Thursday, 10 December 2009 Hospitals 'to feel funding pinch' By Nick Triggle Health reporter, BBC News Hospitals are facing a squeeze on their funding Hospitals are facing the prospect of cuts over the next four years as part of a squeeze on NHS finances. The amount they are paid for treating patients is to be frozen until 2014 as part of the government's productivity drive in England. Health Secretary Andy Burnham said hospitals would have to start working differently, but added it would not necessarily mean hospital closures. Hospital bosses described the task facing them as a "pretty tall order". The freeze in hospital income was included in a five-year plan set out by Mr Burnham following the pre-Budget report on Wednesday. It is going to be tough... hospitals will have to change Andy Burnham, health secretary He said the NHS was facing an "unprecedented productivity challenge" in the coming years. Many predict between £15bn and £20bn needs to be saved from 2011 to 2014. The budget will rise by more than 5% next year, but after that rises look likely to be much smaller as the government seeks to curb its spending to pay off debts. The health service has been told it will get above inflation rises after 2011, but that could still feel like a cut for the NHS as it struggles to cope with demands from an ageing population and higher than inflation rises in the cost of equipment and drugs. But while the NHS will be getting more as a whole, hospitals are facing a freeze in a major part of their income. About 70% of hospital funding comes through a system known as payment by results. It means hospitals are paid per patient treated rather than under the old method whereby they would get a lump sum based on traditional levels of activity. The government introduced the system to make the NHS more competitive and it now applies to everything from hip operations to doctor consultations - only the most unpredictable parts of treatment, such as intensive care, are excluded. 'Tough' Mr Burnham acknowledged the move was designed to ensure more patients are treated in the community, which is much cheaper than caring for them in hospitals. "It is going to be tough... hospitals will have to change." He suggested they could start working with other parts of the NHS to take services into the community - some senior doctors already run clinics in community health centres. But he added it was "not correct" to assume there would be hospital closures. Among the other measures set out by the health secretary was a plan to link NHS funding to patient satisfaction. From 2012, the budgets of hospitals, GPs and other parts of the health service will be directly dependent on patient surveys. Mr Burnham said he hoped in time patient ratings could account for up to 10% of the budget to help create more "patient-centred" care. He also said he wanted to explore the idea of job guarantees for staff in return for accepting pay caps and the need for greater flexibility. Nigel Edwards, of the NHS Confederation, which represents health managers, said: "The NHS has never before been asked to do something like this. "It is a pretty tall order and we haven't got all the answers yet." He said hospitals may have to close beds and even buildings, but that did not necessarily mean there would be poorer care. "If general practice and hospitals work more closely we can reduce emergency admissions among patients with conditions such as diabetes. It is about working differently."