Recession brought an unexpected silver lining: it’s no longer taboo to reveal the costs of healthcare as a means to reshape public behaviour and NHS priorities
Much play is often made of the need to make public financial management more transparent and the political narrative about the state of the public finances more honest. It’s the kind of thing that representative bodies say loudly, but which can too easily be discounted in practice.
Behind this call lies a hugely important and potentially transformative opportunity – to better engage taxpayers and service users in the stewardship, priority setting and utilisation of the resources we deploy. For the health services, the subject of a recent CIPFA roundtable event in Leeds (If truth be told, Public Finance, July/August 2014), there are added incentives to be more open.
These include restoring the public’s trust; exposing the variability of financial performance as a driving force to improve overall quality; revealing sources of financial pressures; making the case for clinically necessary reconfiguration of services; and acting as a catalyst for healthier lifestyles and demand reduction.
One silver lining of the economic recession arguably was the ability to reveal the costs of healthcare as a means to reshape public and professional behaviours in areas such as alcohol-related accident and emergency department attendance, hospital admissions as a consequence of poor medication compliance and readmissions to hospitals from failure to adopt clinical best practice. However, little happened in response to the economic pressures on the transparency of NHS finances and costs.
Parallels could be drawn with the field of energy conservation where, unlike in the NHS, there has been a genuine correlation between improved data transparency and changes in the behaviour of individual consumers. Reinforced by local council policies, this has led to increased recycling and installation of solar panels and influenced motorists’ choice of car. All of these predated the extreme recent increases in the price of energy.
The lesson here is the impact of producing data that the individual consumer can understand and use to find ways of making a personal contribution while potentially receiving a share of the benefit. But it is a lesson still to be learned in the NHS. Service users have little knowledge of the specific costs of treatments such as hip or knee replacements, for example. If they had, might it influence them to take more exercise to strengthen core muscles, or to support more expenditure on fall prevention?
Even when the costs to the NHS of avoidable treatments are revealed, it is at such a level of abstraction (for example, the billions spent on alcohol-related illness and injury), that it fails to connect to anyone at a personal level.
This failure to be more transparent also hurts the NHS when it comes to arguing the case for change. Shouldn’t the public be told the costs of keeping people in hospital when they could be cared for at home? And to have this information before deciding if they wish to march on the streets to keep that money with the local acute provider, rather than reducing hospital capacity and spending the cash on better primary and community services?
All of this plays strongly to CIPFA’s mission – to secure more financial transparency – without which it is infinitely harder for the public to understand and determine the kind of public services they want.
This month, for example, the NHS has published seven sets of data about the quality of care. They have made transparent the variability of performance in the reporting of serious untoward incidents to friends and family. Yet is there any acknowledgment in those data sets of the underpinning financial issues for the trusts that influence care quality? The answer is no, and the consequence is that the public are rightly better informed about, for example, nurse staffing ratios on hospital wards, but not the financial consequences of them. Again the public has only one side of the story. As was once said to me: financial balance without quality – unthinkable; quality without financial balance – unsustainable.
It’s often said that the burgeoning of personal debt came with the increased availability of credit and the opaque nature of loan terms. Before this, households ran on metaphorical jam jars which made visible to all family members the cash available and helped to balance expenditure within budgets. Behaviourally, this meant that people curtailed demand during times of austerity. Is it not time for the NHS and public financial managers to rediscover their jam jars?
Mike Farrar is CIPFA’s strategic adviser on health. CIPFA is holding a conference on Social Care and Health in London on 30 September
This opinion piece was first published in the September edition of Public Finance magazine
