Comment / Scale issues

04 September 2023 Steve Brown

In England, ongoing industrial action continues to undermine attempts to recover following the Covid-19 pandemic – a recovery programme that was already demanding enough before the strikes. 

Workforce remains a key issue facing the whole NHS and the NHS long-term workforce plan provides a medium-term solution, rather than one that will ease the immediate staffing pressures facing systems.

Industrial action – initially by nurses but followed by junior doctors and consultants – has clearly exacerbated the staffing challenges and set back recovery. This was recognised in a reduction of the elective recovery target in England to take account of April’s strikes by junior doctors – though further reductions are surely going to be necessary to recognise the impact of subsequent days lost to strikes.

But there has also been a real financial cost as a result of the additional staff that need to be paid to cover for absent colleagues – often at premium rates.

These are not the only financial challenges facing the NHS. As we report in this issue (see ‘Drugs inflation drives ICB prescribing over budget’), prescribing costs have emerged as a key pressure across the country. English integrated care boards are seeing significant drug cost increases despite national planning assumptions suggesting budgets should be based on 2.4% volume growth and 0% inflation.

Continuing healthcare costs are also a key pressure. Again, real cost rises in care homes are outstripping the planning assumptions – driven by energy and staffing cost rises, with the NHS pay settlement setting a benchmark for care-related wage increases in general.

These financial pressures are in no way confined to the English NHS, with all parts of the UK facing broadly the same pressures (see ‘Health boards under pressure to reduce deficit plans’).

With such immediate challenges, the wider goals for integrated care boards – focusing more on health inequalities and population health and working with partners to address the wider determinants of health – must seem a long way off. However, some transformation activities may actually hold a partial solution to some of the current challenges facing systems.

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Most people agree that the NHS needs to put more of a focus on prevention – reducing demand on services by stopping people from getting ill in the first place, or detecting illness earlier and intervening to prevent the need for more serious treatment downstream. But there is a danger that systems see prevention as having only a long-term pay back while introducing further upfront costs.

In reality, there is growing evidence that investment in prevention can start to show a return in-year – not only in terms of improved outcomes for patients, but in reduced readmissions and lengths of stay (see ‘Upstream impact’).

There are NHS long-term plan initiatives on reducing alcohol and tobacco dependency and obesity. And while there are calls to protect these initiatives as a minimum, there are also arguments for the work to be expanded in some areas.

This reflects just a small part of the agenda facing NHS organisations and finance leaders at the moment. But there is one other issue that we flag up in this issue – the cost of fraud to the NHS. It is estimated that the NHS loses 1% of its budget every year to fraud and corruption and there is no reason to think that this isn’t reflected in all NHS bodies. The suggestion is that if an organisation isn’t finding these levels of fraud in its own organisation, it isn’t looking hard enough.

A recent HFMA roundtable (see ‘Let’s talk fraud’) called for much more transparency and communication around the potential for fraud and how to combat it, with finance managers having a key role to play. There is an argument that NHS bodies should view fraud prevention in the same way as they do cost improvement programmes. Returning 1% of any organisation’s budget to frontline care would at least start to help some of systems’ significant financial challenges.