Acute services in the NHS in England are facing a year of particular financial pressure in 2015/16, when changes to funding arrangements will see £2 billion transferred to community health and social care provision, a parliamentary report has warned.
The House of Commons Health Committee highlighted a warning from the chief executive of health regulator Monitor, David Bennett, that the reduction in funding resulting from the introduction of the Better Care Fund from April next year will present a "huge challenge" to NHS providers of acute care - medical and surgical treatment mostly provided in hospitals.
In its report on Monitor's work, the committee warned that the current model of care is "not changing quickly enough" to cope with demand and funding pressures, resulting in a threat to both the quality of care received by patients and the financial stability of individual providers.
The cross-party committee called on both the regulator and NHS trusts to "address the need to develop different structures to meet changing needs". It warned that Monitor must not get in the way of necessary change by imposing "heavy-handed regulation" on trusts.
"At a time when NHS providers face an unprecedented need to change the care model, Monitor must be a facilitator of change, not an obstacle," said the report.
The report quoted evidence given by Dr Bennett when he appeared before MPs in November: "In 2015/16... there is an additional £2 billion taken from the NHS to be put into the integration transformation fund. That is expected mostly to come out of the acute sector, which means that the acute trusts in particular are going to face a very significant funding squeeze in 2015/16.
"Just dealing with 2015/16, I think, is going to be a huge challenge... We are in intensive discussions now with NHS England, with the TDA (Trust Development Authority) and with the Department of Health to try and work out how that gap between underlying costs and funding can be closed in 2015/16."
Responding to his concerns, the committee concluded that: "The model of care provided by the health and care system is not changing quickly enough, with the result that pressures continue to build, threatening the financial stability of individual providers, and therefore the quality of care provided;
"These pressures are likely to be particularly marked in the acute sector as plans are prepared and implemented to achieve the resource transfer required by the introduction of the Better Care Fund from April 2015."
Health committee chair Stephen Dorrell said: "The Committee has argued on many occasions that traditional methods need to change if the health and care system is to meet the demands of the modern world. More emphasis on prevention and community support, and proper use of digital technology, among many other changes, will allow tomorrow's generation to enjoy not only a length of life but also a quality of life which has never been possible before.
"But the system has to change faster if these opportunities are to be realised; the pace of change is often too slow and the obstacles to change are often too powerful. Monitor has a vital role to play in promoting change and removing obstacles to change. It must identify problems earlier, and act quicker to resolve them."
The Committee said that, as the NHS financial situation tightens, the challenge for Monitor in supporting trusts in financial difficulty is likely to increase.
It warned that the system of paying NHS trusts according to a "tariff" of rates for different treatments created "perverse incentives" and said that Monitor's response to the problem was not "adequate" . It recommended that the regulator and NHS England should conduct an urgent review of the arrangements, with the aim of using tariffs to encourage necessary reforms to NHS structures.
Responding to the report, Dr Bennett said: "The NHS is not changing quickly enough to meet the fundamental challenges it faces.
"In future the quality of care must be consistently high and delivered more efficiently, so that the money available for patients goes as far as possible. We are determined to use all the regulatory levers at our disposal - including pricing incentives - to help providers develop new models of care to meet patient needs, and enable local health economies make the service changes necessary to support them."
A Department of Health spokesman said: "We know that, with an ageing population, we need to be looking after people much better out of hospitals. That's why we've already agreed a £3.8 billion Better Care Fund to join up health and social care and are putting GPs at the heart of a more personalised proactive system of care based in the community.
"This radical change of the healthcare system won't happen overnight but significant progress has already been made and - as this report notes - Monitor has a 'vital role' in supporting this."