News / Work as one system, conference urged

NHS organisations need to cooperate more and operate as a system not a market, a PCT chief executive told finance managers attending the HFMA annual conference.

Speaking at a fringe session on ‘Managing the income’, Stoke on Trent Primary Care Trust chief executive Graham Urwin raised fears about the business drivers in the current set-up. He said that foundation trusts, for instance, were being pushed to make a surplus and grow their businesses. ‘Either they take [work] off the competition or they get the PCT to pay more money,’ he said. ‘That doesn’t sound like working together.’

‘If someone attends accident and emergency to get primary care, there is a cost factor of three. If they go to outpatients [for treatment that could be more appropriately delivered in primary care], the cost factor can be five,’ he said.

‘If we can unleash those costs, we’ve got a real opportunity to make a difference. I suggest we are in the business of managing a system not a market.'

Mr Urwin added that commissioning, rather than competition, was the dynamic needed to drive change and that payment by results was what made it possible.

Giving a provider perspective to the debate, Andy Hardy, finance director at University Hospitals Coventry and Warwickshire NHS Trust, called for better incentives for capital investment. With a tariff set on average costs, including average capital costs, there was a major disincentive to invest. He added that new capital could also increase the efficiency challenge.

With £56m of turnover tied up in the trust’s private finance initiative contract, a 3% national efficiency target equates to 3.5% of the trust’s remaining ‘influence-able’ £324m expenditure. Mr Hardy pointed out that 3.5% was Monitor’s high-risk trigger for cost improvement programmes.