Covid offers chance for reset, says HFMA

by Seamus Ward

Healthcare Finance news, 30 November 2020

The HFMA has recommended changes that could be made to the financial regime to support the post-Covid NHS.

The association said the Covid pandemic offered the chance to reset how the NHS operates, as it has changed significantly how services are delivered to patients.news_EmmaKonwles_pt

The financial regime has also changed, with simplified payment mechanisms based on block contracts, ensuring finance does not act as a barrier to patient care. The temporary regime has removed many of the financial obstacles to collaboration and innovation, allowing providers and commissioners to develop new care pathways quickly.

An HFMA briefing, which builds on an earlier discussion paper, says the NHS and the finance profession must not allow the finance system to regress to the previous regime without considering how beneficial changes made during the pandemic can be adopted permanently.

According to the briefing, systems will be at different levels of maturity and this must be taken into account when designing new ways of financial control. Any new financial regime must be based on transparency and understanding the financial allocations to each integrated care system. National contract models should be based on aligned incentives contracts, which may be compatible with the proposed approach on blended payments, as long as there is local discretion over the variable element of any payment.

System ownership of finite resources should be encouraged through the new regime,
while each system should have an officer charged with providing healthcare within the financial envelope – similar to a local authority’s section 151 obligation to manage financial
affairs effectively.

A detailed national tariff will no longer be required to support payments, but a mechanism for reimbursing out-of-area care and specialist treatments, as well as private and charity providers, will be needed. A streamlined tariff should be used to support payments between systems and spot purchases, the briefing says. And the processes around payment of low-value non-contract activity should be reviewed with the intention of adjusting host organisations’ allocations rather than payment following the issue of multiple invoices.

Current costing requirements should also be reviewed. While robust costing information is vital, costing standards must be proportionate, achievable, and deliver easy to understand, high-quality comparable data that is useful locally and nationally. The briefing adds that the current arrangements do not meet these principles. It also calls for a review of cost data collections.

The HFMA backs changes in financial governance and in the capital regime, with transparent, multi-year capital allocations published several years ahead. Capital approval processes should remain streamlined, as they have been during the pandemic.

HFMA director of policy and research Emma Knowles (pictured) said: ‘The Covid pandemic has been tough on the NHS, but there are positives to be taken from it, from collaboration and system working, to simplified financial and contracting arrangements.

‘Doing things differently during the pandemic has been made easier by the relaxation of financial constraints, which we recognise is not sustainable. But we need to take this opportunity to build on what has worked and remove things that will not support the collaborative model to which we aspire. And we need to it quickly.

‘We look forward to supporting NHS England and NHS Improvement in delivering this.’