Comment / Feeling the pressure

As increasing demands on the service, major restructuring and budget restrictions bite, financial control will be more important than ever.

In many senses the proposed winding down of strategic health authorities and primary care trusts in England can be seen as a classical management de-layering response to a tough economic climate.  It mirrors the response to challenges in the commercial and industrial arenas over the past two years.  

But what marks out the NHS as different is the separation of our customers (the public) from our commissioners (the government). Since the latter has signalled that the size of total NHS spending will fall in real terms (the headline might creep above the GDP deflator but this doesn’t begin to reflect NHS pressures), there is no future in providers making a dash for greater market share, in spite of growing demand.  Indeed, it is worth dwelling for a moment on the pressures facing the NHS across the UK.

First, recession itself is shown by epidemiologists to significantly increase the population’s demand for healthcare. Providers in England are reporting an 8% rise in activity in the first quarter of 20010/11, in spite of record spending on demand management strategies by PCTs.

Second, the downturn has hit local government sooner than the NHS. Net spending on social services has almost certainly reduced and even talk of a possible £400m top-up from NHS funds will do little to meet a major increase in demand for social care.

Third, it is important to acknowledge the expectations of so-called generations X and Y of an instant response by the NHS and of service quality way in excess of those tolerated by their parents.

These phenomena have all contributed to a more challenging summer period than finance directors have endured for years as spending has outstripped plan without the comfort of top-line growth.

It illustrates the nature of the pressure on the

NHS, which comes at a time when attention is focused on the need to save £20bn and to embed QIPP (quality, innovation, productivity and prevention) programmes in England and their equivalents in the other home nations.

The coalition government has of course recognised some of this by relaxing the 18-week and A&E waiting times targets. But the sheer pressure on emergency departments throughout the summer, combined with a downturn in social care provision, has almost certainly slowed the QIPP programme and compressed the timescale for delivering true productivity gains. 

While many of these pressures were predictable, the size and pace of structural changes announced by the government was not.  If delivering unprecedented levels of improved productivity, against a backdrop of unprecedented demand (and need?) for healthcare, is the overwhelming imperative for NHS leaders in this Parliament, is structural reform a step too far?

Again, the accepted academic evidence is that structural change of such magnitude has a habit of distracting managers from their main objectives as their attention is diverted to concerns about their immediate organisational and personal future.

For HFMA members, all of this will be well understood and members will be experiencing such pressures on a daily basis. Delivering productivity improvements is not an optional extra – a point that will soon be underlined by the comprehensive spending review.

It is more important than ever to remind ourselves why we work in the NHS. The long-term sustainability of patient care in the UK demands that financial control is maintained through the turmoil.