Feature / Team for change

There is broad agreement that transformation of health services is needed if the NHS is to meet current challenges. The argument is well rehearsed. An ageing population, increases in long-term conditions, the rising costs of technology and a difficult financial context mean the NHS needs to find new ways of working that deliver better quality and outcomes from a broadly flat budget.

So transformation could mean supporting patients proactively in the community rather than waiting for them to turn up as an emergency admission. This should deliver better outcomes for patients and, potentially, reduce costs (if fewer admissions allow bed closures).

But transformation, be it at whole health economy or ward level, is far from easy. Major change projects focus on making a permanent and widespread difference to the delivery of services – a move away from the narrow focus of cost improvement initiatives that tend to look at doing the same for less.

A new briefing from the HFMA looks at the role of chief finance officers (CFOs) and finance teams in this agenda. Based on interviews with finance managers and clinicians in transforming organisations, the briefing identifies roles for finance in five main areas:

• Culture
• Planning
• Analysis
• Leadership
• Governance and accountability.

The need for a different culture was highlighted by all participants. Transformation needs to be clinically-led – everyone was clear on that – but fully supported by finance. This means finance staff must understand how services are delivered and the impact of new models, and it requires clinicians to engage properly with the financial context.

This new culture also means ‘balancing a more commercially focused attitude to payment for services’.  The briefing suggests that finance directors will need to take an ‘altruistic approach’, recognising when it is right to support rather than compete with other organisations for the common good of the health economy.

Financial planning may be core finance territory, but interviewees said long-term financial planning had a big part to play in maximising the chances of success for transformation projects. Such planning should set the parameters of available resources and cover revenue and capital considerations. As one clinician put it: ‘Clinicians do not normally think 10 to 15 years down the line; chief finance officers bring finance vision to planning conversations about services.’

Crucial link

Linking financial plans to clinical and quality strategies is seen as a must. Great Western Hospitals NHS Foundation Trust in Wiltshire, for example, has carried out detailed planning work to support the transfer of some services to community settings. It has used evidence on ambulatory care-sensitive conditions to decide the most appropriate setting for treatments and how to fund them.

Finance staff’s analytical skills are also seen as a huge asset to transformation projects. They can help to turn a clinical vision into a business strategy and develop the business cases to support change. And while change needs to be clinically led, finance can and should provide challenge to the clinical approach, where there is evidence.

High-quality costing accountants should have a prominent role in helping to understand the economics of change. A robust understanding of the costs and benefits of new practices  can provide the confidence to proceed and ensure organisations go into schemes with their eyes open.

‘Costing the benefits is hard – it’s a real challenge to measure the savings arising from patients not arriving in the first place,’ says one interviewee. ‘But if the transformation approach can be demonstrated to reduce infections and length of stay, which saves money, you would be unlikely not to do it.’

Finance staff’s cross-department view is also identified as an asset in spreading savings opportunities from team to team.

CFOs in commissioning organisations can also bring their skills to bear. For example, programme budgeting data – promoted by NHS RightCare – can underpin transformation decisions, perhaps helping to build a case for how investment is made in different services. While finance teams are key to getting the core data right, the briefing says they also have a role in using local and national spend information to help organisations understand where they could make changes.

Part of a CFO’s leadership role is as a board member with shared responsibility for quality of services. But the CFO also has specific skills for transformation – project management being the prime example. They can also play a big part in getting the environment right. Operational leads need to know they have the board’s backing, but should also receive robust challenge to their plans. CFOs attending transformation team meetings, for example, was seen as a way of signalling the importance of the work to the organisation.

Good governance and internal control are also identified as key to transformation. Risks need to be identified and monitored, there need to be clear lines of accountability and an appropriate contracting and procurement framework needs to be in place.

Finance staff will not lead transformation projects. Clinicians need to take – and be seen to take – this role. But by playing an active support role, finance teams can significantly improve a project’s chances of success.

The HFMA briefing Transforming healthcare: the role for the finance team can be downloaded by clicking here.