Comment / System solutions

A report on the sustainability of acute hospital trusts was published by the Public Accounts Committee in March. It was informed by an inquiry to which the HFMA gave evidence. It was great to be able to talk about how the financial challenges feel at the coal face and our regular temperature check results meant we could back up our comments with evidence.

There is increasing recognition that the problems facing the NHS – and pushing providers further into deficit – are systemic rather than due to the failings of providers.

Some organisations will have responded better to the pressures than others – and there remain significant opportunities to drive further efficiency and to spread best practice. But it is good to see recognition of circumstances the service already understands.

Efficiency targets have been unrealistic in recent years, the payment system needs an overhaul and wider workforce planning issues need to be resolved alongside measures already introduced to reduce agency spend.

We increasingly need to take a system focus – and fix the system – rather than expecting organisations to deliver against unrealistic individual targets. That is not to say the NHS and individual bodies shouldn’t be challenged. We should. And the recent Carter report is a good example of an initiative that both challenges us and offers us tools to improve. But the challenges need to fair and the expectations realistic.

The sustainability and transformation planning process – and the work to establish health economy-wide footprints – demonstrates a sensible approach to work as whole economies to address the current challenges. We need to ensure that politics and ‘old system think’ does not get in the way of tackling some real knotty issues.

Commencing local procurement exercises for local services at this time makes it difficult for stakeholders to work together, leads to less transparency and adds a further level of complexity into a process that will be complicated enough. Our system leaders will need to give a clear steer on this.

The planning guidance for 2016/17 and beyond hints at taking this system-wide approach to another level with NHS England and NHS Improvement identifying a willingness to explore a ‘single financial control total across local commissioners and providers’.

In many ways this is appealing. How often has one provider’s poor financial position been related to the underfunding of its commissioner, or a provider’s poor finances undermined the performance of its commissioner? Yet this will not have stopped these organisations facing scrutiny or sanctions for issues partially out of their control. This often leads to inefficient spending to address short-term issues rather fix the long-term problem.

Taking a system-wide view has to make sense. We have been moving (slowly) towards a system based on complete transparency. Yet this is not always how things have worked, with central or local commissioner support for local providers – or different approaches taken on sanctions and incentives. This has only masked the true underlying financial positions of organisations.

A system-wide approach would in theory enable a simpler approach with system-wide balance being the common goal.

Yet how would this operate? A system approach would require complete openness around shared data and a rethink of the contracting framework and tendering requirements. And what would happen to tariff?

And we mustn’t lose the good work that has come out of the existing systems.

The HFMA has a big role to play in helping to think through how such a system would work and what governance arrangements might look like. It is a major undertaking, but it must be explored – and soon 

Contact the president on [email protected]