Feature / Support act

Finance managers will be crucial players in the new commissioning structure in the NHS in England, but their role will be one of support and assurance to clinical commissioners. That was the clear message from the HFMA’s Commissioning in healthcare conference in May.

NHS Commissioning Board (NCB) national director of finance Paul Baumann welcomed the opportunity to share early thoughts on the future of finance. He said finance would have three roles in the new structure: facilitating decision-making through better information; sharing best practice and problem solving; and tracking risk.

Although GPs and other clinicians would lead CCGs, they would need support. Indeed, he said, there was evidence a partnership between clinical and financial leaders was not only natural but also a pre-requisite for successful organisations. ‘In the past there was a reliance on management consultants to do things that ought to be our core business,’ he said. ‘I intend to make excellence in strategic decision support the cornerstone of the financial strategy we are developing.’

In a Q&A session later, he said excellence in decision support could mean linking clinical outcomes to return on investment. Some emerging clinical leaders were keen to engage with finance on linking changes in outcomes delivered and funding, he said. A lot of academic work had been done in this area, but he was keen to find practical ways of doing it.

Mr Baumann said with its unparalleled network crossing organisational and geographic boundaries, finance was the ‘corporate glue’ that held the NHS together. It was best placed to promote solutions to common problems, working closely with clinical networks.

Finance managers could help the GPs at the helm of CCGs to track risks – flagging up the need for intervention at the appropriate time. ‘The government intends to give CCGs assumed liberty,’ he said. ‘For this to work finance leaders in every part of the system must quickly detect when things are going wrong and make decisions on when and how to intervene. Too early and clinical innovation will be strangled at birth; too late and the legacy could be lost.’

He outlined five priorities for finance over the time that remains until the new system goes live next April. The first is to ensure the new CCGs have sufficient financial support.

‘It is important to know finance is overseeing the delegation of resources, but as we move forward we need to clearly show the capability of each CCG to deal with the financial challenges they face,’ he said. ‘This means a system of governance and sophisticated risk management, particularly in the smaller CCGs.’

Behind every CCG success story there will be a chief financial officer (CFO) with a strong grip on the group’s finances and on the best way to deliver QIPP, he added. This was why the current CFO accreditation process was so important.

Building relationships

The second priority is the provision of excellent support services, Mr Baumann said. Finance had a role not only in delivering some services, but also in building close relationships with customers and ensuring the efficiency of emerging commissioning support services.

His third priority is to ensure the NCB has the capacity to support CCGs and directly commission services with a value of £20bn. It is understood local area teams, which will be overseen by four NCB regional offices, will take on a commissioning role. All will commission primary care services – GP, dental and pharmacy – while up to a third could lead on specialised commissioning. A small number could commission optometry and military and prison health services.

Mr Baumann said the local teams would be critical to the day-to-day relationship with CCGs. ‘The relationship with CCGs will take different moods on different days,’ he said. ‘Sometimes it will be friendly support, on other days the helpfully challenging bank manager, the performance manager and sometimes the troubleshooter.‘

Despite having three tiers, the NCB would be one national organisation, he said. ‘We can’t afford duplication or double running costs.’

Future of the tariff

Outlining his fourth priority, he said financial flows should facilitate and incentivise the QIPP agenda but not destabilise the system. He said this was the greatest challenge in shaping the tariff for the future. Finally, his fifth priority focused on the need for long-term planning – clinicians, supported by a robust economic analysis, should lead these plans.

‘These are a complex set of challenges that will test our capability and resilience. Inevitably, much of the focus is on the mechanism of the new system, but the key task is how to use opportunities, in particular the new partnership between clinical and financial leaders, to speed up the delivery of QIPP in all its dimensions for the benefit of patients.’

NCB director of commissioning support Joe Rafferty told the conference that commissioning support services (CSSs) would not be primary care trusts by another name. ‘CSSs will not take the decisions. This is one of the ongoing issues we face in terms of people’s understanding,’ he said.

‘Commissioning support is often described as the grunt work. If your CSS does not make your transactional work more efficient it will be unfortunate. They need to do great transactions but that is not sufficient.’

CSSs could provide data warehousing, for example, giving CCGs access to accurate data to support decision-making. But they could also mine that data to provide timely reports, adding value to their services.

Mr Rafferty acknowledged one of the biggest challenges for CSSs was developing a good relationship with customers – a new concept for the NHS that would grow in importance as CCGs became more sophisticated customers. He said the recent checkpoint exercise, which whittled down the number of CSSs to 23, had shown positive signs of customer focus.

Promising guidance on the next checkpoint would be published soon, he added: ‘The [CSS] offers are not as innovative as they need to be. They need greater commercial awareness and partnerships need to be explored more. But we have come a long way in a year and there is still a large amount of work to do. What’s different from April 2011 is the collective will of commissioning support staff to make it work and the understanding of the sophistication needed to ensure customers stay with them.’

In a speech challenging traditional thinking, HFMA Commissioning Finance Group chair Cathy Kennedy said a new style of governance was needed for CCGs. The NHS was used to the board being the decision maker, but CCGs are membership organisations and will be led by their council of members. ‘The members are at the top and they will decide what to delegate to the board that supports them,’ she said. ‘The council of members is the decision-maker and will be held to account by the NCB. We need to think about how we support it – to come to it at the right time and in the right way.’

Ms Kennedy is chief financial officer of North East Lincolnshire CCG, which aims to gain authorisation in the first wave this summer. She said the lack of rules about CCG governing is both ‘scary and exciting’. CCGs submitting authorisation bids had to get over the gaps in information – for example, on management allowances (which at the time had not been published).

‘We have to show how we plan in uncertainty,’ she said. ‘Isn’t that the reality of what we are dealing with anyway? The challenges we face in the next few years are going to look like this. There will be risks, assumptions, different plans at different times.’

Signs of strength

Mr Baumann said there were ‘difficult, challenging and exciting years ahead’. He was proud of the progress the NHS had made in creating greater financial stability. And though he acknowledged a small number of providers and commissioners faced significant financial challenges, overall the NHS was in a strong financial position.

The creation of 2% headroom in primary care trust budgets by spending the money

non-recurrently was one of the best finance interventions in recent years, he said. Overall NHS England would produce a surplus of just over £1.5bn in 2011/12.

He paid tribute to NHS deputy chief executive David Flory, who had made a major contribution to the transformation of the financial position. But he added: ‘We need to safeguard that legacy and meet patient demands in what is likely to be a prolonged period of tight resources. We need to create new ways of working and there is a central role for finance in making this happen. Our partnership with the HFMA will help us formulate a clear agenda together.’

Transformational change rather than short-term measures was needed to drive up quality and ‘structurally reduce costs’. ‘This is difficult stuff. It requires bold decision-making and the changes in commissioning will be the ideal vehicle for that rather than the distraction from the main task of QIPP, as some say,’ he said.

Finance staff will be vital in supporting clinical commissioners – whether advising on QIPP plan costs, setting up new and robust governance arrangements, providing efficient payroll services or offering timely and relevant management information. But first they must address Mr Baumann’s five priorities to ensure strong, stable CCGs emerge.