Feature / The knowledge

How much do you know about the NHS outside finance? Do you know how an 80-year-old in need of a hip replacement makes their way through the system? Which clinicians are involved in treating a child with leukaemia? Where treatment is delivered? If you don't think you need to know the answers to such questions, new HFMA president Tony Whitfield is asking you to think again. He believes it is only by knowing the business – the theme for his presidential year – and working closely with clinicians that the NHS finance function can help achieve efficiencies, improve productivity and deliver better, safer services to patients.

The reasons for Mr Whitfield’s focus are clear. The gap between funding and demand is predicted to be £15bn-£20bn by 2015 – hence the £20bn Nicholson challenge. There is little hope in the current economic gloom that extra funds will be found to bridge the gap. Last November Bank of England governor Sir Mervyn King was downbeat about the next three years, predicting the UK economy faced a ‘long and winding road’ in the medium term.

This will come as little surprise to many. The chancellor has given assurances the NHS will see funding growth in the first year of the next spending review period. But commentators believe the best overall settlement the NHS can expect for 2015-2020 is a repeat of the current flat growth funding. Some are still predicting an overall real-terms cut. Either way, further efficiencies will be required after the current spending review period.

But the pressures will not just be economic. The Francis report on Mid Staffordshire will add to the focus on quality and patient safety, and how these can be balanced with savings.

Mr Whitfield believes finance managers can help address these issues through sound planning and the development of a financial model that underpins change, ensures quality and maintains sustainable service provision. ‘I believe the true financial professional has to be a warrior for clinical quality,’ he says. ‘In a world of constraint, seeking and supporting change in our operating models must be high on our list of core responsibilities.’

As evidence this can be done, he points to the transformation of mental health services in the 1980s. This was based on a thorough understanding of costs – a point today’s NHS must learn if it is to successfully transform services, he says.

His recollection of early HFMA annual conferences was that of a ‘near patient-free zone’. This has changed over the past 10 years, particularly since 2008, when then chairman Chris Calkin led a programme of engaging with clinicians and their representatives. ‘Chris’s work on clinical engagement was groundbreaking because of the importance he placed on understanding each other and what motivates us. When we don’t engage, motives can be misunderstood,’ he says.

‘It is my contention that more than ever in our recent history we need to know about the business we are engaged in,’ he says. Hence his theme, ‘Knowing the business’ – a logical extension of his predecessors’ initiatives to engage clinicians with finance and give them the skills and awareness needed as the service changes. The theme is relevant to all four UK nations struggling with similar problems.

To begin to know the business, he believes finance staff must look to the wider economic and political worlds, as well as gaining a greater understanding of how individual clinical specialties operate and the challenges they face. ‘It is important we understand the macro context – the flexibility a government has and how it decides between an army helicopter, a school or a health facility. This is especially true now with a flat-line economy as there are tough choices with no easy answers. With this knowledge we can contextualise especially when confronted with clinicians seeing a solution as “we just need more money”.

‘The main thrust of my theme is creating within finance a deeper understanding and empathy with clinical staff and what they do. I have a colleague who recently went through a very anxious time with his child. I asked him how his perspectives changed between being an anxious parent and a demanding finance professional. I believe his experience has helped him gain greater insight into what should and shouldn’t be changed. 

‘If we see healthcare as a value stream, it’s the attention to improving value that will deliver QIPP. You can only improve value if you understand what components of the system are capable of change. I’d like to encourage finance colleagues to commit to spending time seeing first hand how care is delivered.’

Before joining the NHS Mr Whitfield was an accountant for a manufacturer where the driving force was to make a product to a fixed quality for the lowest cost, ‘My job was to work with engineers and production managers to help find newer ways to reduce product costs. I found this exciting and was proud when we found ways of doing something differently for less. But when I joined the NHS, finance and the clinical service seemed physically separate, operating in parallel universes – something

I found most odd.’ As soon as he was able, he began working with clinicians to understand what they did and why. Having been a finance director for more than 20 years, he has gained an understanding of the healthcare business. But he says some staff never get this chance.

‘Many staff across all sectors of the NHS don’t work with patients and exposure to frontline services is limited. A clinical code boiled up into an HRG and transacted into a financial payment is miles apart from the anxious parent waiting to hear if the operation on their child has gone well. We find finance is often asked to offer a judgement on a business case without any real context of clinical service being understood.’

To begin to know the business, finance staff must liberate themselves from spreadsheets, returns and computers. HFMA Medicine for managers briefings, the first of which was published in December (see www.hfma.org.uk),  will provide an overview of clinical specialties – outlining the key activities, the staff involved and specific challenges faced by each specialty.

Building on the popularity of last year’s HFMA online seminars, Mr Whitfield has asked the association education team to develop webinars to help members understand the business of healthcare. Run over this year, they will be open to all members.

Finance directors can take a lead and he asks them to think about how they can free up time for their staff to learn about clinical issues. The HFMA will also act at a national level to engage clinicians. As a first step the association plans to speak to the Academy of Medical Royal Colleges about how they can build on the accord signed in 2008. ‘This will reinstate the commitment we all have to integrate fully into the lives of clinicians,’ Mr Whitfield says. The academy’s recent statement on the importance of providing a full set of services seven days a week (an aspiration endorsed by the NHS Commissioning Board in its 2013/14 planning document), is an opportunity for bodies to join forces to put forward the case for quality.

He admits he is a ‘huge advocate’ for seven-day-a-week working to be implemented at pace, but any move in this direction must be costed and evaluated to ensure it is financially sustainable. ‘The evidence for many specialities is that access to senior decision-making soon after a patient attends a hospital speeds up the treatment. This improves the patient’s opportunity for the best outcome alongside some potential to save resources. We owe it to patients to be part of a careful evaluation to ensure a fair-minded view can be taken.’

He is pleased Monitor, in its new role, has asked finance teams to pay attention to costing. ‘I’m also pleased the HFMA recognised this a few years ago and I’m proud of the work the association has done to support colleagues in responding to Monitor’s requirements,’ he says.

This work has included the development of clinical costing standards and a joint project with Imperial College, supported by Monitor, to understand approaches to costing in Europe. A report on this work, to be published shortly, will inform the HFMA’s future costing work.

Good costing requires strong financial skills aligned with a ‘true and deep understanding’ of the way patients flow through the system. This means developing partnerships with clinicians. ‘Having that deep understanding should matter as much as accounting standards if we are to make our full contribution to NHS reform and patient care,’ says Mr Whitfield.

With reference to ‘Knowing the business’, he adds: ‘Most of us understand fixed, semi-fixed and variable costs. What we know less about is the cost of delivering a patient benefit. So in our new world, knowing what each £1 does to add value and how to disinvest and reinvest in increasing value is impossible unless we can ensure costs truly reflect the cost of delivery.’

Getting costing wrong in today’s pluralistic provider environment will create instability for organisations and concern that doing the right thing might mean financial failure.  ‘This cannot be right,’ he says. ‘So it is fantastic to see Monitor being proactive in this area. For me costing needs to be seen as a mainstream, high-value activity. Following the Francis inquiry we’ll need to better understand costs that can guarantee a level of clinical quality.’

Another initiative focusing on education is the HFMA’s pilot of an e-learning course with 100 GPs in the West Midlands Deanery. He hopes this will provide lessons on how to embed finance into clinical training. ‘Education is our most important tool,’ he says. ’With our considerable experience in this area we are well placed to deliver better ways of understanding each other and how we combine our talents to achieve the goal of maximising quality and creating best value for taxpayers.’