Feature / Looking forward – and back

Taking up the role of the HFMA’s 60th honorary leader, Paul Assinder is acutely aware of the history of the association. He tells Steve Brown that finance can learn from the past as it looks to meet today’s challenges 

New HFMA president Paul Assinder, finance director at Dudley Group of Hospitals NHS Foundation Trust, believes finance managers should be looking for the positives

in the current widespread financial gloom. ‘In the NHS finance profession, we need to view the next six to nine years as an opportunity as well as a challenge,’ he says.

‘The opportunity is to make sure the fundamentals of our organisations are in good working order so that we have got proper clarity of decision-making and proper accountability frameworks and a proper view of risk. We need to ensure we have good assurance frameworks so that our boards can make increasingly difficult decisions in the certainty of the risks they will be carrying.’

The current economic difficulties mean that good governance and good financial control are at the top of the agenda. Daily news about the economic difficulties and the likely impact on public sector spending can leave staff in no doubt as to the importance of these issues. The NHS needs to use this to its advantage.

‘Private sector organisations are getting to grips with the recession and they are turning their businesses around,’ he says. ‘Part of what they are doing is getting back to basics – strengthening their basic control systems and questioning the need for every pound of expenditure in the same way as if it was their own money.’ The NHS needs to take a similar ‘sole trader’ mentality, he argues. 

Private sector lessons

Mr Assinder believes the private sector will also provide other useful ideas. ‘There is a lot of good evidence about how companies are tackling the recession,’ he says. ‘Networking with the outside world has never been more vital. Every senior finance manager needs to buddy up with the commercial and industrial world to understand what they are doing.’

The NHS has been here before. While real growth since the service’s inception 60 years ago has averaged just under 4% a year, there have been periods of low and even negative growth – a 3.9% cut in health spending in 1977 and real terms cuts in the mid 1980s and 1990s. And it has only been five years since many parts of the NHS were either in formal (imposed by the Department of Health) or voluntary turnaround.

Mr Assinder’s theme for the coming year is ‘Looking forward, looking back’ to mark the association’s 60th anniversary year in 2010. But he says it also relates to the need to apply the lessons of the past to the current challenge. In particular he says the skills learned in that most recent turnaround period – in terms of improved governance and strengthened cost control – will prove invaluable going forward.

So what are the lessons the NHS should heed on surviving a recession? ‘First, we can’t compromise on service quality,’ says the new HFMA president. ‘Doing the right thing at the right time in the right way, and doing it only once, has to be cheaper than the alternative.’ He points to the indiscriminate cuts in building maintenance and staff training in the 1980s and 1990s as examples of how not to approach productivity improvement.

Second is the need to maintain the improvements of recent years in service access. ‘These have been achieved at great financial cost to the taxpayer and as a result of great effort by the clinical community,’ he says. Using access as a financial pressure valve doesn’t work and in any case Mr Assinder says it is not an option. ‘UK citizens in the 21st century will frankly not tolerate a return to waiting times for routine procedures

measured in years and months rather than weeks or indeed to a third-world standard of emergency care,’ he adds.

Best practice backing

A return to price competition should also be ruled out, says Mr Assinder, suggesting that GP fundholding led to compromises on quality and equity.

‘Such a response has undeniable short-term attractions but in these unprecedented circumstances they would, I suspect, result in a race to the bottom, with a consequent deterioration in quality and access,’ he says.

He backs the move to best practice tariffs as long as they are designed to incentivise the right collective behaviours. And in the new year he will oversee work at the association to examine the options for using the tariff to support changes in service delivery.

However, Mr Assinder says the single biggest lesson from the past is that the only way to realise productivity gains of the scale needed is by working systematically across the entire patient pathway. ‘We need to work across organisational boundaries, unlock the creativity of clinicians and produce a model of provision that is faster, safer and cheaper,’ he says. ‘This is the task that now lies before us.’

His own trust has made progress in this area. It has created a respiratory assessment team to work with known respiratory disease patients before they have an acute episode. ‘It is an outreach service that aims to keep people out of hospital,’ explains Mr Assinder. Run outside of payment by results, the service provides a better service for patients and frees up hospital capacity for more appropriate activity. Like many trusts, Dudley has to date used the freed-up capacity for other activity that can generate income. But as the NHS moves forward into its new economic reality, the trick will be to remove acute capacity – something that is even more challenging in a private finance initiative hospital where capacity is largely bought and paid for through an unvarying unitary charge.

Mr Assinder acknowledges this is a key challenge moving forward – changing the way clinicians work and then turning reduced acute demand and activity into cash savings rather than theoretical efficiencies. There is a big onus on commissioners to manage demand – so that reduced length of stay and freed up capacity is not simply filled up as a result of lower referral thresholds and increased patient flows.

And he believes the tariff system has to help providers by helping them deal with the fixed costs that don’t reduce as beds are taken out. This is an area the HFMA is planning to look at in 2010.

Vertical integration is often seen as an answer to the pathway issue, with integrated acute and community organisations having total control of the pathway and better able to manage the impact of changing the time and place of intervention. Mr Assinder describes this as a ‘no-brainer’ for patients with chronic conditions. The argument for integration on specific pathways is compelling, he says, with the NHS unable to ‘afford the luxury of border disputes between organisations’.

Clinical engagement with service redesign and financial management in particular will remain key to improving services and eliminating waste, says Mr Assinder. The issue was highlighted by Chris Calkin during his year as HFMA chairman (2008) and has been pursued further this year under the chairmanship of Bill Shields. Mr Assinder says he is aware of increasing levels of engagement both within organisations and across organisational boundaries.

He suggests service line management, built on patient level costing data, can only help further this agenda – giving clinicians an insight into where unnecessary costs may be arising. Although he believes data is better than it has ever been, he recognises information systems and data are still a work in progress before they become fit for purpose. ‘Clinicians have to accept that this is a developing science and have to work with us,’ he says.

Mr Assinder insists the HFMA has a big role to play in supporting members through the coming challenges. The service needs its finance function to be at the top of its game as it aims to improve quality and productivity and the HFMA needs to offer the right support.

The HFMA’s e-learning has already proved an attractive alternative to more traditional forms of training for large staff groups. With money tight but an even more important need to spread financial awareness among all staff, he believes e-learning could be much more widely used in the coming years. Services such as the new Performance Network will also play a role in helping trusts benchmark performance and identify areas for improvement.

Beyond this he says the HFMA will continue to represent the finance function at the highest level, ensuring it has a voice in policy development and providing feedback on the impact of those policies. It will seek to ensure its education programme is tailored to the function’s immediate needs. And, through its branches, it will provide the means for staff to network and share approaches to shared challenges. It promises to be a busy time.