Finally, politics is changing faster than the NHS. We went from downsizing NHS England to abolishing it. ICB budgets are being halved. Providers are cutting hundreds of staff. And the tariff wars are tightening what little fiscal headroom the economy had left.
The honest premise is now unavoidable. There is no more money.
Gainsbury's Law tells us that the cost of healthcare is on a forever trajectory of cost growth: advances in drugs, devices, diagnostics, digital technologies, and shifts in demographics and demand collectively drive health spending up by about 4% a year. Almost all of that growth happens in hospitals.
In Austerity I (2010 onwards), the NHS got more money and a bigger workforce. The way the NHS is organised meant it absorbed both without any meaningful improvement in productivity. We are now in Austerity II. The question is not where the new money comes from. It is where the existing money is going.
The Iron Triangle
If we carry on blind to the economic realities, something will have to give.
Speed of care: slow down access and accept longer queues. Politically unacceptable and the one measure keeping the Labour Party at the next election.
Scope of offer: restrict the products and services available. The NHS already does this, but the list of exclusions could grow.
Quality: accept even poorer outcomes. Outcomes in the UK are already among the worst in the developed world.
Balancing the Iron Triangle without new money requires something the NHS has never seriously attempted: finding and releasing the value trapped inside its own system.
Follow the providers, follow the money
There is trapped value in all parts of the NHS provider landscape. Not a single finance board paper calculates value, speaks of value, or points to trapped value. The 80-20 rule means the acute sector is where to focus.
The three shifts the government wants (hospital to community, analogue to digital, cure to prevention) are the right direction. But the funding to make those shifts has to come from releasing what is currently trapped in the acute sector, not from new money that does not exist.
At STRASYS, the Decision Intelligence engine for healthcare, we have done this work. Our approach to releasing trapped value follows a clear logic:
Take a cluster of hospitals in an ICB geography as a provider collaborative or existing group and map the entire spend. Understand population needs set against what is offered and what needs to be offered to meet those needs. Then use the principles of scale, learning, volume, and focus, to redesign how services are delivered across that geography.
The Strasys Value Index provides the analytical framework, measuring how effectively trusts deliver high-quality, timely healthcare relative to cost. It accounts for population need, not just raw activity, and benchmarks value across acute, specialist, and integrated care settings.
Through our analysis, including the work Naeem Younis published on why Cost Improvement Programmes consistently fail, we have shown that salami-slicing costs without changing how work is done produces a rapid decline in quality. The same number of units, doing the same things in the same way, with fewer people. A recipe for harm, dressed up as a savings plan.
The Consultant Workforce Optimisation System targets the single largest source of trapped value: the consultant workforce. Since 2018/19, consultant headcount has grown by 28.5% while productivity has declined by 12.1%. CWOS uses forensic data triangulation to reveal where clinical capacity exists but is not reaching patients, and how to release it.
The strategic commissioning opportunity
Provider groups and collaboratives are forming across the country. Whether through formal mergers or softer collaborative models, the question for every group CEO is the same: what is the return on investment from scale?
The answer depends entirely on whether scale is used to share back-office costs (marginal) or to fundamentally redesign how services are delivered to meet population need (transformational).
The reshaped ICBs, now focused almost entirely on strategic commissioning, need the analytical capability to direct providers towards that second path. Population Need Segmentation provides that capability: understanding what the population actually needs, set against what is currently offered, to inform where resources should shift.
For the NHS to still be here, free at the point of use, meeting needs and getting the best outcomes, we have to be honest about the economics. There is no more money in the economy for the NHS. But there is trapped value in the NHS that could fund the future.
It takes real leadership to admit you need help to do that different thinking. It takes real leadership to then act on it.