Keep the wheels moving

by Steve Brown

Healthcare Finance comment, 27 March 2020


Money mustn’t be an obstacle to frontline delivery, says Healthcare Finance editor Steve Brown

Steve BrownKeep things simple and ensure that money is not a barrier to providing the best frontline response to Covid-19 coronavirus emergency. That is the overriding goal of the new ‘temporary’ financial regime put in place for the start of 2020/21.

This simplified framework will see the operational planning process replaced with a regime based on block contracts giving providers a guaranteed minimum level of income. All finance team efforts are to be directed towards supporting the frontline.

Other distractions have been removed – the IFRS 16 leasing standard has sensibly been deferred for another year – and timelines for accounts have been adjusted.

But there can be no doubt that the finance community still faces a huge agenda in supporting the coronavirus efforts – see HFMA president Caroline Clarke’s comment.

Cash will be absolutely vital so that hospitals can pay their staff and suppliers. There is a clear message that NHS providers should in fact be looking to significantly improve on existing payment performance for suppliers. Ensuring providers have two months’ worth of funding by mid-April should support this aim. But finance teams will need to check that they can keep these functions running in the case of significant increases in staff absences.

Finance staff will also be busy ensuring that capital expenditure is enabled for equipment or modifications related to Covid-19 – the purchase of pods, medical equipment or works that will enable theatres or other areas to be put to different uses. This will be supported by rapid assessment of claims where needed by the centre.

Keep the wheels moving is the clear instruction. Ensure the money isn’t an obstacle to the frontline response.

But while there is an emphasis on keeping the money flowing, there is also a clear message that financial control remains vital. Spending decisions have to be quick, but these still need to be taken within a robust financial governance framework.

The lack of plans for this period mean that there are no budgets against which performance can be compared.

But the calculations used to set commissioner funding and provider reimbursement will provide the basis of the financial monitoring framework – even recognising that costs are very likely to exceed the baseline assumptions.

The guidance stresses that all costs incurred in responding to the outbreak will also need to be recorded accurately and reported monthly. In part, this will help ensure providers receive adequate top-up funds to cover their exceptional costs.

However, the service will also have to give an account to Parliament about how the money was spent, why it was spent and that it was spent properly.

As finance staff themselves become ill and are forced to take time off work, finance directors will have to find ways to move staff around the team to keep the most essential activities working efficiently.

And there is also the likelihood of staff being asked to take on more general covering roles to support the frontline response.

No-one is in any doubt that the efforts to respond to the Covid-19 coronavirus are being led by the multidisciplinary frontline staff. But this is a team response, with back-office staff all having vital roles to play in what will be a sustained challenge.

Finance staff, with some important specific functions, are a major part of that team.