In a word
by Mark Orchard
09 February 2018
Joint NHS England and NHS Improvement refreshed planning guidance for 2018/19 was released last Friday, with supplemental organisation specific control total letters arriving earlier this week for both the commissioner and provider sectors. How does this look from the perspective of one of the health economies working towards an integrated care system?
The Dorset health and care system is one of the eight nationally announced accountable care system (ACS) pilots working towards the fast track implementation of improvements set out in Next steps on the five-year forward view. Locally this is being taken forward, following public consultation, through implementation of the Dorset clinical services review.
Within this, the Dorset NHS group – comprising four provider foundation trusts and a countywide clinical commissioning group – is already working within an initial two-year financial framework for 2017/18 and 2018/19. This Dorset collaboration agreement suspended payment by results as an activity reimbursement mechanism from April 2017 and committed all parties to ‘flat activity’ based on prior-year contract envelopes and whole system demand management.
Further, the Dorset NHS group is focused on delivering the aggregation of its individual financial ‘control totals’, not least to maximise the receipt of related nationally available income into the local health system.
Year one has not been without its operational and financial challenges. But the group looks set to deliver within overall planned parameters – critically, for both activity and on the money.
Year two operational planning commenced as early as September. And so by the time the refreshed planning guidance was issued last week by NHS England and NHS Improvement, Dorset already had a robust set of financial models. (The key points of the planning guidance are summarised in an HFMA briefing Refreshing NHS plans for 2018/19: a summary).
Dorset’s task now is to overlay our share of an additional £1.6bn, as announced in the autumn Budget, plus the further £540m made available by the Department of Health and Social Care. This challenge rests with the finance directors in the first instance to create a proposed financial framework for sign-off by our system leaders and boards.
So how do the 2018/19 Budget refresh announcements stack up in terms of helping an ACS pilot move to ‘go live’ on the next stage of our journey? If I had been asked to write the guidance myself, I don’t think I would have ended up with a materially different model.
What’s in a word? The refresh certainly creates a new brand of identities including the transition from ‘accountable care system’ pilots to ‘integrated care systems’ (ICSs); and ‘sustainability and transformation fund’ (STF) income to both provider and commissioner ‘sustainability funds’ (PSF and CSF).
But most importantly, the refresh both signals and provides a national solution for binding patches together, at least as local NHS groups, against which to formally align system priority objectives.
The collection of a single ICS operating plan, together with the option to agree net neutral control total offsets from the beginning of the planning year to reflect local circumstances, puts the focus on where it needs to be. Further, the guidance puts commissioners on a level playing field with provider partners in creating aligned incentives through amendments to the quality premium for non-elective demand and an STF equivalent offer for those CCGs most financially challenged.
For Dorset – and I hope for most of England – the refresh package is helpfully light on surprises and gives whole systems a higher degree of prominence than was otherwise the case through the normal course of collaboration. Delivery during 2018/19 will again stand or fall on our collective ability to create capacity – not just in service terms, but in our roles as leaders balancing operational delivery while at the same time creating the future.
For Dorset, this includes at least one organisational merger and a significant capital investment programme to enable an ambitious clinical service redesign across the acute, community and mental health sectors.
There is a lot going on and much to already be proud of. Most importantly, the refreshed planning guidance reinforces the journey we are on and provides further legitimacy to strengthen the governance within which we operate. The days of ‘fortress FTs’ may be over. But for as long as the model relies on a cluster of individual organisations working together to optimise service delivery at a system level, the role of sovereign boards, centred within the context of a larger population footprint, remains as important as ever.
The clarity provided within the refresh confirms 2018/19 as being the third year of nationally set financial control totals with a major focus on sustainability. The arrangements originally intended to provide a ‘fire break’ year have become, for now, the new normal.
This package is broadly welcome and creates further conditions for local system change. But let’s hope that plans to mark the 70th NHS anniversary later this year will also be matched with the beginnings of a longer-term sustainable plan for health and care.
Refreshing NHS Plans for 2018/19: an HFMA summary
Funding boost in planning guidance (HFMA Top stories)
What finance data is required to drive value at a population level?
20 June 2019
NHS corporate governance map - Updated June 2019
18 June 2019
Education and events
HFMA summer conference
04 July 2019
Annual mental health finance conference 2019
17 October 2019