Comment / The heart of the matter

I was talking to friends outside the NHS recently about what I do. The fact that I can spend my whole time writing about healthcare finance – that there is a ‘healthcare finance’ community even – is difficult for some people to grasp.

My rehearsed response on such occasions starts with establishing agreement that we all want a health service that provides universal healthcare, irrespective of age, race, social status or ability to pay. No problem there.

Then I ask how they are going to make that happen. I talk about the complicated system of allocating resources to different areas, trying to take account of not just the age mix of their local populations, but also relative need and levels of deprivation.

Even once you’ve got the ‘right’ money to the right areas – which I explain we haven’t yet for multiple reasons – how do you decide how much to spend on mental health, community or hospital services? How do you divide your budget between maternity, asthma and mental health, for example? And how do you cope with ‘unpredictable’ demand for emergency services alongside the day-to-day job of responding to less urgent illness within a fixed budget?

I talk about how much of what the media likes to call bureaucracy is really the delivery of transparency and accountability. And I talk about why efficiency and waste reduction is not just about saving money, but really about getting better frontline care. If we spend more than we need to delivering care in one place, we don’t have the money to spend on other services, new treatments or ensuring we have the right staff.

Finance is absolutely at the heart of delivering the aims of the NHS. And it will be at the heart of delivering the five-year vision set out in the Five-year forward view (FYFV) published by the key leadership bodies in the NHS, spearheaded by NHS England.

Of course, the headlines have been all about finance – and the end of the pretence, at least within the NHS, that the service can deliver the required efficiency gains without additional real-terms funding increases.

But the real role of finance will be much more local than the overall decision about national funding. The ambitious efficiency gains that remain within the plan – up to 3% a year – will demand close working between clinicians and finance teams.

Good patient-level cost data, driven by Monitor’s push on costing – we expect to hear more about this this month – will hold the key to understanding some of the cost implications of the ‘unacceptable variations of care’ referred to in the FYFV, and in some cases help to focus in on those variations.

Sound business cases and great project management will be needed to take forward the concentration of specialised care, where appropriate.

Finance will also need to be fully involved in any plans to set up new multi-specialty community providers – in their scoping out, setting up and subsequent management. Primary and acute care systems – creating the vertically integrated accountable care organisations that many commentators and foundation trust leaders have called for – will also need to be built on completely solid foundations, not least in their governance.

Wrapped around all these changes will be new payment and incentive systems – again, making the best possible job of getting the money to the right places in the most equitable way possible.

These payment systems cannot be
designed properly without the input of finance professionals, with their unique view of how previous tariffs and payment approaches have encouraged or acted as an obstacle to improved care.

The finance role in delivering healthcare services – and in the transformation challenge that lies ahead – may not be widely acknowledged. But this is a team game – the front line and support services both have parts to play. The vision set out in the FYFV simply won’t be achieved without the vital input of NHS finance professionals – and any friends of mine can expect me to be making that point in future conversations.