News / News analysis: Positive response

In the wake of the Francis report, it is clear the public want action. They want to know their hospitals are safe; that staff are compassionate; concerns can be raised without fear and investigated quickly; and that the regulators are working together to provide the expert eyes and ears that safeguard the public. But where does finance fit in? After all, financial problems at Mid Staffordshire NHS Foundation Trust were at least partly responsible for its failures.

Grant Thornton has been running a series of workshops for HFMA branches to consider the effect of Francis on finance departments. Points have included the importance of balancing the needs of quality and compassion with financial goals. The seminars have also explored the makeup and culture of a top-class finance department, which they said should be outgoing, taking finance to the frontline and based on the needs of stakeholders.

Separately, a HFMA conference in April gathered senior finance managers, leading academics and clinicians to focus on the future of NHS finance post Francis. And it was clear that finance was expected to play a full role in addressing the issues that were raised by the inquiry.

The Mid Staffordshire trust has recently been placed in special administration. NHS Trust Development Authority chief executive David Flory said this was the consequence of action taken around four years ago when the trust was given additional funds. ‘In a pure business sense, it would have been right and responsible at the time to identify the services that you couldn't resource properly, financially or in workforce terms,’ he said. ‘It would have been right to acknowledge that in each of these services, you cannot provide a safe, high-quality service with the workforce and financial resources available to you. The right business action would have been to stop the service provision.’

Learning lessons

But such a course of action would have been unthinkable at the time, added Mr Flory. ‘This is a big lesson for us when we think about the challenges that we face in an increasingly tight financial environment. It compels us to go deeper than we have previously managed.’

While accepting he was making sweeping generalisations, Mr Flory said the NHS did not have a good understanding of the interplay between workforce, activity and finance. ‘My view is that there are only a few places that could tell us in a clear plan how these factors will interplay; how they will manage the dynamics of this; and how they will respond when an assumption made about the availability of one element of that triangle changes. If you can’t describe that, you can’t manage it; and if you can’t manage it, you can’t control it.’

The days when NHS organisations should carry on providing under-resourced services in the hope and expectation that something might turn up were gone, he added. ‘The places that are working through the financial constraints, or more often the constraints on availability of workforce, will lead us to a place where they acknowledge they can’t provide services to the right quality or to a set of standards patients have every right to expect because they haven’t got the resources.’

But he warned. ‘Saying that is one thing. But it is not credible if elsewhere in your organisation there is evidence of inefficiency.’

Some finance directors expressed concern that the renewed focus on quality was coming at a time when providers were losing 4% of their tariff income each year and pressure on some services, particularly A&E, was growing.

Francis inquiry solicitor Peter Watkin Jones, who participated in the HFMA conference, had some sympathy. ‘I don't think any one of us on the inquiry team believe there is a simple solution to this. Throwing money at the problem will fail. The government threw money at Mid Staffordshire and it still failed. The system is still target-driven and there will be penalties against you if you don't meet those targets. People at the top are saying: “Here’s a target, are you meeting it? And if not, why not? In fact, forget about the why not, just do it”.’

And he added: ‘I am constantly asked why there is no recommendation in the report for a fixed ratio of nurses to patients. Benchmarking is good but one size fits all doesn't work.’ He explained that the National Institute for Health and Care Excellence must work with the royal colleges and others to produce benchmark numbers for each discipline.

Mr Watkin Jones repeated the widely held belief that major reconfiguration of the way services are delivered to patients was imminent, but that such change must take account of quality and efficiency. ‘There will be huge changes, but it will take time. If A&E is struggling the most, why is that? Is it that the GPs aren’t doing what they could be doing to alleviate that?’ he said.

HFMA president Tony Whitfield said finance must contribute to the reconfiguration of services. ‘As the finance community, are we going to let somebody else redesign the system for us or are we going to be part of the redesign? We are working with the 1948 business model. Are we at the point where we redesign everything we offer to serve the public differently? We know the public will find that difficult, but it’s part of our job to cost that.’

No harm, no waste

Mr Flory said traditional methods of cost saving, such as procurement efficiencies, would still be important as the NHS faced the ongoing QIPP (quality, innovation, productivity and prevention) challenge. But the way forward on clinical and financial sustainability was to address the ‘no harm, no waste’ agenda.

‘Make sure the clinical and financial consequences of cost imporvement programmes (CIPs) are fully understood,’ he said. ‘I would hope that every board in the service, in the run-up to the start of the new financial year, has spent sufficient time in an open, public forum ensuring that the consequences of their cost reductions are fully understood.’

But a board’s responsibilities did not end there. They must also track the impact of their CIPs to ensure it was successful and that there were no unintended consequences.

 ‘Look five years ahead to what your organisation will look like once 20% more has been taken out. Think about how we get from where we are now to there, and most importantly what the governance arrangements will be,’ said Mr Flory.

Salford Royal NHS Foundation Trust chief executive David Dalton described how his organisation – for which Mr Whitfield is executive director of finance and deputy chief executive – was on a journey to minimise harm to its patients. Six years ago it set out to become the safest NHS provider in the country after it discovered it ‘harmed’ 850 patients a month – everything from delays in medication to more serious events. He said doing nothing about poor performers reinforced mediocrity.

Mr Watkin Jones said providers must be candid. ‘Candour means telling a patient that they have been harmed, even if they don't ask. That may mean the provider will have to pay damages, but they will have to do that anyway if they get sued. Pay the money up front and learn the lesson.’

This type of cultural change was at the heart of the report. Boards, including finance directors, must lead by example, Mr Watkin Jones said. The inquiry had spoken to finance directors who would ask only how a problem would affect the delivery of cost improvement plans. In some cases, directors accepted a failing service on the grounds that it could not be improved and the best staff could not be recruited or retained. ‘If you can't make it better or safer, you should say so,’ he said. ‘If it means closing it and moving to a centre of excellence, people will live with the consequences if there is an open debate. But they won’t stomach decisions being made behind closed doors.’

The way services are provided and the culture of the NHS must change – and finance managers cannot step back and let others take the lead.