Comment / Eyes wide open

We need to step back from current pressures and see the bigger picture and finance needs to ensure its focus is on value, not just cost

By Sue Jacques

I had the pleasure of attending a public lecture by Professor Peter Taylor-Gooby at Durham University recently. His topic was ‘The real reasons why the coalition government is cutting the welfare state so hard’. While it is impossible to do justice to this thought-provoking lecture in such a short space, I would like to share some of the points he made. First he highlighted the growing discrepancy in the UK between the richest and poorest. He said this could grow even further over the next five years or so with the biggest impact on the poorest in society. Times might currently feel hard, he said, but only about 20% of the cuts in public spending are being felt by our population now. In short, the greatest impact is still very much ahead of us.

Perhaps most shocking to me was his assertion that there is reducing sympathy for the poorest in society – a trend that has been growing since the late 1980s. He pointed to predictions that the UK will fall down the G7 league table in terms of spending on public services as a proportion of GDP over the coming years (spending even less than the US).

It is society’s lack of sympathy for those they see as a burden on the state that professor Taylor-Gooby suggests is a contributory factor to the overarching policy response. But while he perceives the state of affairs to be gloomy, he cites three reasons for us to be optimistic. First we should see some attitudinal change. As the cuts kick in and more of society struggles, we will all know more people in difficult circumstances and will become more sympathetic.

Second, social interventions and movements such as minimum pay legislation and restrictions on, or increased  awareness of, executive pay – for example, through the pay multiples disclosures – will create a higher awareness of the dispersion of salaries. This should create a movement towards reducing the growing inequalities between rich and poor.

Third, history teaches us that the intended public sector cuts of various governments of the 20th and 21st century have never been achieved as set out. In essence, time moves on, context changes. In our day jobs, we rarely have opportunity to look at the bigger picture. But it is important that

we do, particularly given that the NHS has been relatively protected from cuts to date – not that it always feels like that on the ground, given the increases in demand.

It is clearly our responsibility to ensure the poorest and most vulnerable in society can access healthcare when they need it. Equally we must ensure that the public health spend is directed to reduce, not allow, a widening of inequalities in respect of healthcare.

One of our roles as finance professionals, especially in times of economic constraint, is to define value and not merely cost. Only by doing that can relative worth be attached to the health interventions we undertake and the right thing prioritised.

Colleagues in HFMA US have been exploring value for some time and its website is worth a visit. Don Berwick, formerly head of both the US Centers for Medicare and Medicaid Services and the Institute for Healthcare Improvement, is a leading authority in this area – perhaps the leading authority. It is timely – and a coup for the HFMA – that he has been lined up to speak at our annual conference in December. His message will be well worth listening to.