The scale of cuts required of the NHS is unprecedented and possibly unachievable. Normal efficiencies just won’t do and finance professionals need to bring doctors on board
The recently announced changes to the Health & Social Care Bill have deferred any radical reform of the NHS for at least the lifetime of this Parliament. Unfortunately, the state of UK public finances still leaves the health service with the task of finding £20bn of efficiency savings by the end of 2013/14. This is an unprecedented and possibly unachievable challenge.
NHS managers have been making ‘efficiency savings’ for decades, but it would be a grave mistake to see the current exercise as a continuation of the past. The sheer scale of what is being attempted means that radically different approaches will be needed.
Given that such savings are financially oriented, it is inevitable that NHS finance professionals will have a leading role to play. But health service staff at all levels and from all backgrounds will also have a major contribution to make. The key is getting them ‘on board’.
There are a number of aspects to NHS financial management that can aid the hunt for efficiencies. These include cost improvement programmes; budgeting systems; service line reporting and management; and costing systems.
But to meet this latest challenge, trusts need to do three main things:
• Ensure they have sufficient and appropriately experienced finance staff. This might be difficult to achieve in a time of financial austerity.
• Rigorously review the ‘fitness-for-purpose’ of their main financial management systems. For example, does the budgeting system properly address departmental priorities? It is too easy to be complacent about this. A recent report by the Audit Commission on strategic financial management in local authorities identified issues that were major weaknesses in the current financial context.
• Perhaps most importantly, the key to success and the most difficult task will be getting an organisational culture that has the active involvement and engagement of a wide range of service managers and professionals on financial management issues. Of particular importance is the role of senior doctors and their involvement with finance.
This is vital for many reasons. Medical staff are responsible for the commitment of large swathes of expenditure and often have major roles in facilitating the success or otherwise of cost improvement programmes. For many years, senior doctors have also been involved, to a greater or lesser degree, in the operation of the budgeting system and more recently in service line reporting and management. However, research suggests there are concerns about obtaining the long-term engagement of doctors in the latter and in providing incentives for their involvement.
Much greater participation of senior medical staff in NHS financial management is needed. It is not always easy but it cannot be ignored.
Looking across NHS trusts, there are clearly variations in the level of involvement but the reasons for this are not obvious. What are the factors that might encourage or inhibit the involvement and engagement of senior doctors in NHS financial management?
Furthermore, even where there is a degree of interest and willingness, senior doctors do not always have the necessary knowledge and capabilities to discharge that role effectively.
Thus, while financial systems and methods are important in the quest for efficiency, perhaps the main task for senior finance staff is to build an understanding and a working relationship with doctors about what needs to be done and how improvements can be made.
Without this, the future of the NHS could be bleak.
Malcolm Prowle is co-author of a report on the effectiveness of budgeting systems in the NHS, which is to be published shortly
