Comment / A harsh reality

A little system management is a small price to pay in the move towards a fairer, more accurate financing system

The Chinese have a proverb: ‘May you live in interesting times.’ And surely we are now living through such a period.  One minute we witness the worst winter weather for a generation and are told to prepare for the ravages of global warming; the next we see another banking crisis and start debating the subtle differences between recession and depression.

But has any of this changed behaviour? Based on my own experience, the answer appears to be a resounding ‘no’. At a national quality event, I was amazed to hear senior clinicians bemoan the fact that the CQUIN (commissioning for quality and innovation) scheme in particular and the quality agenda more generally will be hampered by too much emphasis on financial incentives. If this is a typical view from clinicians when the global economy is experiencing such difficulty, have we been successful in engaging our clinical colleagues

on the financial realities of modern healthcare?

And so to payment by results (PBR) and the tariff.  We have undeniably seen much greater levels of clinical engagement in the development of the new currency, HRG4.  Why then, have we read about so much concern from providers and commissioners of the potential impact, when everyone agrees the new tariff is more sophisticated, more granular and, given the changes to the market forces factor component, ultimately fairer than the version it replaces? Is this perhaps an inevitable consequence of the changes that can occur when a rules-based system such as PBR is in place? And what should we expect from strategic health authorities as system managers?

The operating framework for 2009/10 makes it clear that SHAs have the ability to manage the impact of tariff changes and the volatility these create. This could, however, be seen as a retrograde step when we consider the requirements of new contestability rules in the NHS. It could even be seen as anti-competitive. One interpretation could see this process as providing financial support to organisations that would otherwise be in financial difficulty.

My view is that these are second-order issues when set against the alternative: NHS policies deemed unviable or commissioners disinvesting in some services to pay higher prices for the same volume of activity – both the result of a technical exercise.

Is this the death knell for service line reporting? I don’t think so. It is always right that we understand the cost drivers of delivering activity and, through service line management, we can make the most informed decisions at the appropriate level.  But I don’t think it necessarily follows that we should take investment or disinvestment decisions purely on this basis when the tariff is still a developing mechanism that will become more accurate as its detail and scope increase over the coming years.

Returning to that quality conference, how do we engage clinical colleagues when what we offer are uncertainties and volatility, rather than scientific truth? As ever, the key is in focusing on effective working arrangements within our organisations, gaining a real understanding of service delivery and ensuring we make a significant contribution across organisations and not just in the narrow world of NHS finance.

By doing this, we show our role is greater than simply creating individual profit centres that are subject to the vagaries of reference cost returns, and we can play a key part in the delivery of high-quality care for all.