Rough transcript

Unlike Ed Miliband forgetting to mention the deficit, I'm going to spend a lot of time talking about financial pressure. Thank you for having me back. It was a closely fought election, thrilled to be back. HSJ's Shaun Lintern tweeted that he was "strangely relieved", which is the closest thing to a compliment I'll get from HSJ.

I want to pay tributes, to Andy Burnham on his passion for health and social care integration and to Norman Lamb on mental health: rest assured we will build on that legacy and put mental health centre stage (Applause).

Despite incredibly challenging winter, we only missed performance target by 2.1%. We have a faster A&E turnaround than any country in the world. Each year, we do a million more operation than 5 years ago, and 18 weeks barely moved. Cancer survival's up from one of the lowest in Europe 5 years ago. We do many more tests and 700,000 more people have been treated for cancer.

We have the toughest turnaround regime in world, mixed sex wards practically eliminated: all that together, can understand why Commonwealth Fund voted us best system in world. Proud of real progress in NHS. Please go back to your organisations and thank all your staff for their contribution to that success. Commitment to NHS absolute, non-negotiable: we saw that in the general election. Our staff do our country proud, each and every one.

After elections, the debate recedes, and the time for words and action is now. Your leadship matters more to the NHS than any of my policies. Going to announce things that hope will help, but none will be as important as the leadership you show. Matters more in healthcare than anywhere else. Interaction between financial, social and moral is what brings people into NHS. Value-based leadership matters, as your shared values with staff proves.

Challenges remain. The bad news; face a triple-whammy due to huge financial pressures due to deficit; ageing population (one million more over seventies by 2020); and raised consumer expectations of 24/7 care and new technologies.

The good news, is that now we have a plan: the FYFV, and government backing and funding for the plan. I argued inside my party that we should commit to £8bn in our manifesto. And FYFV is a good plan, put together by someone incredibly smart and has backing of all of you. Now taxpayers have shown commitment to NHS, & the 8bn is now £10 bn with the extra money we announced in the autumn statement.

The time for discussing whether the money is right is past. Now it's about the £22 bn efficiency gains. Which are not cuts.

To quote Gary Kaplan, CE of Virginia Mason "the path to better care is the path to lower cost". VM saw an awful patient tragedy, injection of antiseptic fluid into brain. He emailed all staff to inform them and VM took the reputational hit. And then they started to improve everything in the hospital. Some of their reforms were done by adopting Toyota lean manufacturing techniques.

As VM have done this journey, they moved from persistent deficit to persistent surpluses. One clinic went surplus for the first time in three decades. One back procedure went down in cost from 1500 dollars to 150 with better patient satisfaction. Costs are now lower than their competitors'.

In Salford, David Dalton is saving £5mn a year due to safety. See the same in other industries, like air: halving number of deaths and costs over 30 years. Car industry, road deaths down five times. Government, Home Office budget down 23% and crime down.

Gary Kaplan's key point is that this is not about two parallel processes: not about eliminating waste to spend more on patient care, it is one and the same.We need to adopt that.

A word about Mid-Staffs. I want to pay tribute to staff at the new County hospital, turning it around in tough circumstances. All of you also responded. You could have said 'Mid-Staffs was a problem unique to one hospital'. You all told me something different, and in fact admitted 'we may have some of the same in our trust'. As a result, we've transformed the approach to safety and quality in the NHS.

I don't want Mid-Staffs to be usual NHS tragedy, public inquiry and move on. Want Mid-Staffs to be the moment when the NHS changed to be the world's safest health system.

It's just wrong we put wrong prosthesis on weekly; twice a week leave in foreign body during surgery or do wrong-site surgery. I'm proud that the NHS in England is asking tough questions and is determined to be the best in the world. Safety must be the core, as it is in other industries: nuclear, oil air, and then we can get those benefits of safety and quality, helping with the money.

What needs to be done. Most efficiencies will take huge effort from people in this room. Can't all be me or Simon Stevens. Ronald Reagan said the nine scariest words in the English language are "I'm from the government, and I'm here to help", and I and we at the centre need genuine humility. I hope the past week's announcements on resetting the market in agency staff, VSM pay and management consultancy spend helped.

Procurement and costs - we can save by more fixing rostering of staff. Lord Carter has done huge work, and many cooperated in sharing data to understand potential benefits of procurement and rostering. Some findings staggering. One major hospital had 650 sales reps targeting them, with 65 sales reps on site at any time.

We pay their salaries, and not by good at buying those products. Syringe unit cost ranges from £12 to £4. Toilet rolls box costs one NHS hospital £66, another £30. Best practice in procurement should have 7,000-9,000 product lines: the NHS has 500,000. Price variation exceeds 35 percent. Variation up to seventy eight hours per annum in nurse admin time. Two whole weeks of work. We waste £500,000 on adverse reactions.

We will make a Compact with you to try to find those efficiency savings. Lord Carter will publish a model hospital procurement aim. By September, he will share with you sum of money he estimates you could save in trusts if you adopt it in full. We'll work through that with you to get to an agreed sum by December, then in January 2016 you'll have to do it. I hope this will help you release a lot of extra savings

The NHS needs to improve at the sharing of best practice. Sheffield saved £3m improving bed flow and reducing death rates. GSTT got their inpatient LOS down from 13 days to 7. Other countries diffuse best practice via hospital chains.

So we have accepted Sir David Dalton's recommendations about FT provider chains. By September, we will have competitions and Monitor and NHS England will choose the first four nascent FT hospital chains.

If you are selected, the Government and NHS England will do all we can to remove obstacles in your way.

Third way we can help is to publish performance data. The new Bruce Keogh letter points out that data publication is inconsistent, and he recommends that in future, we do it all monthly on same date including safety statistics.

The final area I want to support you today, recognise improving productivity and efficiency not just front door of hospital, also outside. Simon Stevens' comments being 'lippy' on scandal of childhood obesity are right, and the Government will publish a national obesity framework before the year end.

It's also about transparency: the Kings Fund's Chris Ham will help us develop transparent metrics to cover all parts of country, assessing CCG performance. We'll look at global best practice, and move one step nearer to outcomes based performance metrics.

I think we will look at performance of CCGs, not just secondary care, and at specialist, primary co-commissioning and community. 5 key patient groups
Older people
Long term conditions
Petrol with mental health conditions
Mums and children
Mostly healthy

Wee'll measure performance in quality, experience and prevention. Clearly, we need to get right how we'll weight different factors. Also , we need to understand where we don't collect data we need.

And we'll measure two other categories: resilience and transformation. Readiness for crisis; and the longer term transformation stuff even if not immediately apparent.

This publication can let us move beyond targets, to transparency and peer review and help the NHs become the world's largest learning organisation. If we can do that it will be transformational for the NHS. The system lives or dies by quality of care we offer. Nearly 70 years ago, Nye Bevan set up NHS using the phrase "universalise the best". It's really important we remember that vision.

One of the big challenges of tax-funded system is that healthcare resources are tighter, though we do avoid insurance cost-inflation. We've been good at universalising access, and we can be the first in the world to universalise quality. The NHS is already the most transparent about care quality variations in the world. No other country put 10% of hospitals into special measures over the last year.

Primary care matters too, and one of my priorities for this term is treasuring and valuing GPs. Electronic patient records in primary care can now 97 percent of patients now have access.

Values section
A Buddhist monk advised me that we should seek 'leadership by values'. And values are not just something of the NHS big names: they're what the people we see every day do.

Clinicians going the extra, in many ways: that is leadership by values, and what in the end our entire NHS is built on: safer care, higher quality, lower costs. It's about being patient-led and patient-driven. It's about a dream not just of universal access, but universal quality. Not just my dream: that of over a million staff in NHS mustn't let them down.