Comment / Collaboration key to firm foundations

No-one needs telling the NHS is in the middle of a major financial challenge. Foundation trusts are not immune. More and more are getting into financial trouble – 40 of the 147 FTs (27%) ended 2013/14 in deficit. This was double the number in 2012/13.

FTs may be the better organised providers in the NHS, having passed Department of Health and regulator authorisation standards. However, if a health economy is in trouble, it is not easy for any provider to deal with the resulting significant financial pressure.

The only way we can meet this pressure is together – and I don’t mean collectively as FTs or even just the NHS. We need to develop relationships and collaborate across our whole local health and social care economies – and wider local government – to maximise the value from the combined assets we have and develop the right services.

This is not straightforward. It is perhaps a little easier in rural areas, where there is more of a one-to-one relationship between councils, commissioners and hospitals. They have their own unique challenges connected to rurality, but they are all at least talking about the same patients and service users.

But for bigger city hospitals with large specialist portfolios, this shared focus doesn’t necessarily exist. Yet decisions taken and funds shifted by one commissioner for just some services could have wider ranging impacts for other services.

We need to see the whole picture. That means developing a shared understanding of our financial positions, services and challenges and it means starting to plan our long term resource use together. We need actions that deliver real change across whole local economies, not changes that simply shift costs from one organisation to another.

The better care fund (BCF) is a start, though we need to take this collaborative approach across our broader resources, not just at the margins. The focus has to be on value at the local economy level. If BCF funds do not lead to real change in demand for hospital services and demand continues to rise, it is hard to see how the hospital sector could cope with a reduction in income. That doesn’t benefit anyone.

The fund transfers have to be coupled with real change and we’ll only get that change by working closely together across all the partners. I’m not convinced there will be a dramatic change in the financial profile of hospitals, particularly where they are delivering acute and community services side-by-side. But that doesn’t mean there won’t be major changes in the way we deliver services, and there is certainly huge potential for better sharing of assets. Ownership isn’t important, better utilisation is.

Robust data will be key to the whole transformation process. At Guy’s and St Thomas’, we are already starting to see links that were invisible to us before we delivered community services. For example, we can see how recruitment difficulties for community service teams in one patch lead to an increase in demand for hospital services. This is vital intelligence as we look to get services delivered right first time in the right location and avoid the costs of unnecessary hospital care.

We need to have this visibility across the whole economy, not just within single organisations. We need to understand the links between pressures in GP services – especially out-of-hours – and social care services and hospital demand.

So while foundations may be feeling the pinch alongside the whole NHS, the answer is to share the problem. We are committed to working to make things better together across health, welfare and social care with all partners locally. Our top priorities are collaboration, collaboration, collaboration.

Martin Shaw is chairman of the HFMA FT Finance faculty and finance director of Guy’s and St Thomas’ NHS Foundation Trust. The HFMA FT conference takes place in Brighton 3-4 July