News / News review - Seamus Ward assesses the past month in healthcare finance

It's taken almost two years, white papers and discussion documents, a listening exercise and hours of parliamentary debate, but the government's reforms of the NHS in England have passed their final stages and become law. Late attempts by Labour and rebel Lib Dem peers to sabotage the health and social care bill came to nothing. Now comes the hard bit.

The wide-ranging legislation will hand control of around £60bn of NHS England spending to GP-led clinical commissioning groups (CCGs), abolish primary care trusts and strategic health authorities and give new duties to Monitor.?With implementation of many of the changes in 12 months' time, a great deal of work is under way – new bodies such as the NHS Commissioning Board and CCGs have been set up in shadow form – and the service can expect a welter of guidance and direction over the next few months. The Commissioning Board, for example, is expected to publish CCG authorisation requirements shortly.

As well as implementing reforms, the NHS must also deliver £20bn of savings that will be recycled into patient care by 2014/15 and it could face a further challenge of at least £20bn in the next spending review. According to the Financial Times in March Department of Health director of policy, strategy and finance Richard Douglas (left) told a meeting of NHS chiefs that they were fooling themselves if they thought the pressure on budgets would be relaxed when the current spending review period ends.

The story will come as no surprise to those who have heard NHS chief executive Sir David Nicholson and his deputy David Flory speak at recent HFMA conferences – over the past few years they have warned the NHS has entered a new paradigm of minimal growth backed with annual efficiency targets. The new financial year effectively marks the beginning of the pre-spending review period and with the economy continuing to show little sign of sustained growth, austerity could be with us for a number of years yet.

One sign that the reforms and the efficiencies are beginning to bite came in the latest workforce figures. NHS management staff numbers fell by 8.9% in the year to September 2011, according to the latest figures from the NHS Information Centre. In the same period there was a small increase in professionally qualified clinical staff. However, numbers of managers and senior managers were still 10,790 (39.3%) higher than in 2001 – an average annual increase over the period of 3.4%. Provisional figures for December 2011 showed that numbers of managers and senior managers continued to fall after September 2011 with a reduction of 279 (0.7%). ?

The efficiency drive is not simply about staff cuts – one study suggested the NHS could save £700m a year simply by cutting the number of missed GP appointments. Up to six million appointments are missed each year, but a study published in the Journal of the Royal Society of Medicine found this could be cut by almost a third by helping patients remember their appointments. Simple, cheap measures such as asking patients to write down their appointment time themselves or asking those who booked over the phone to repeat the time and date cut 'did not attends' by 18% and 3.5% respectively. Replacing practice posters displaying how many people missed appointments with the number who had attended made a further 10% reduction.

Operational efficiency was to the fore in a King's Fund report on sustainability. Sustainable health and social care: connecting environmental and financial performance said the NHS is unlikely to become more environmentally sustainable through operational efficiency alone. It said a more fundamental transformation in service models would be needed, with a greater emphasis on prevention, shifting care upstream, better integration and co-ordination of care, and an ongoing focus on maximising value for patients.

Further encouragement for the health service to adopt telehealth and telecare came from health minister Paul Burstow (left). He said widespread implementation could save the NHS £1.2bn over five years. In a speech to
the International Congress on Telehealth and Telecare, he said the initiative was
not about technology, but about empowering patients to live independently, though he added it may not be right for every patient. He acknowledged there would be substantial upfront costs, but believed the Department of Health and the industry could agree new payment mechanisms – such as through ongoing contracts, similar to the monthly contract for mobile phones. ?

NHS trust and foundation trust annual reports lack quality, clarity and accessibility, according to financial adviser Grant Thornton. It studied more than 100 2010/11 annual reports and while it was aware of many examples of good governance this was not reflected in the standards of reporting. Its report, Delivering good governance, said some reports presented an incomplete or inaccurate picture. Only 13% of trusts and 2% of foundations make disclosures about gifts, entertainment and hospitality received by senior staff and clinicians, for example.

The dispute between sections of the clinical professions and the government over the reforms may be all but finished, but round two will be fought on pensions. In March health secretary Andrew Lansley (left) wrote to NHS bodies outlining the government's final proposals on amendments to the NHS Pension Scheme. The headline points of last year's 'heads of agreement' have not changed and Mr Lansley insisted that the deal was the best offer staff would be getting.

The British Medical Association is to press ahead with a ballot of members on industrial action. BMA consultants' leader Mark Porter said doctors would rather be planning improvements in clinical services than being in conflict with the government. ?Royal College of Nursing members voted to reject the government's plans. More than 62% voted against the proposals, while 37% were in favour of accepting them. However, the RCN was disappointed only 16% of members chose to vote, adding the union would be meeting with other unions to discuss the next steps.