Comment / Straight talking

You couldn’t miss the media headlines about the NHS provider year-end deficit position of £2.45bn. However, we all know that the underlying position was much worse.

There is no doubt that the NHS can improve productivity and efficiency. The work by Lord Carter provides opportunities trusts must explore to satisfy themselves they are delivering as much value as they can. But a lot of this improvement will take time. 

Even where we discover real local opportunities, we can’t fix everything overnight. And, as other commentators have said, the current level of overspending in providers is not down to mismanagement and inefficiency in trusts.

Despite the difficult year-end numbers and reliance on technical measures, NHS bodies put in an amazing shift last year to constrain costs. Finance directors and senior finance managers need to keep doing all we can to improve productivity and support transformation. But we also need to maintain our professional integrity and the sovereignty of our boards.

That means continuing to produce plans based on informed assessments of demand and financial flows. And it means plain talking about real savings potential, the impact on services and realistic timescales.

June sees the submission of both sustainability and transformation plans and local digital roadmaps. It is increasingly clear that while these planning tools may have been devised at different times, they are now rightly being linked.

Without the correct technology in place, we simply won’t be able to transform services in the way we need to deliver sustainable services.

It is hard to see how we might move to more networked and integrated services without having ‘digital, interoperable and real-time patient and care records’ committed to by 2020. This programme is about far more than eliminating paper – the roadmaps need to be fully aligned with broader system plans.

These programmes of work are all about future-proofing the service – and they are vitally important.

But in terms of the transformation the NHS needs – revised patient pathways and new models of care – this will also take time. It is the right thing to do – eliminating variation, ensuring patients are treated in the most appropriate environment, supporting patients to stay well rather than catching them when they fall acutely ill and matching facilities to the right-sized catchment areas.

And there is a good argument for suggesting that more prevention, better quality, less rework and economies of scale will also deliver savings.

But it is still not clear what the financial impact of this transformation will be. Will it fill the gap between expected healthcare spending (if no changes are made) and current levels of committed funding?

There is also an argument that holding the level of funding to what has been announced and then establishing sustainability and transformation plans to review services is really an exercise in rationalisation. 

Analysis shows that UK public spending on health has fallen in recent years and, comparing planned additional spending to expected growth in the economy, will reduce to below 7% of gross domestic product by 2020.

It is not straightforward. Comparisons with other countries need to take account of both public and private spending on healthcare, and the link between changes in GDP and health spending is not completely clear. But it provides a good check on general funding levels.

Both NHS Providers and CIPFA have recently questioned whether current funding as a proportion of GDP – behind many European countries – is really where the UK
wants to be.

One thing is certain. The balance between funding, efficiency, transformation and service rationalisation is a topic that demands discussion by politicians, within the NHS and by the public.

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