Health and local government finance officers are learning about whole systems working the hard way, by applying it to manage the Better Care Fund.
It may be just ‘huddling together for warmth’ or a desire to transfer your risk to someone else’s budget line – but whole systems working, and with it the sharing of financial risks and benefits, is rapidly taking root as the modus operandi for local health and social care providers and commissioners. And of course, it’s absolutely imperative that it does so.
But that does not make it easy to do well. Indeed, as people are learning, it’s much harder to achieve in practice. Many of the rules and skills that we have deployed for years in individual organisations are no longer effective when applied collectively. Add the word ‘shared’ to key functions, such as financial risk management or achievement of outcomes, and the complexity of the task multiplies.
A case in point is managing the service and financial risks across whole health and care economies in order to design, agree and deploy the Better Care Fund effectively.
For many local systems, despite years of sitting round committee tables with joint plans and strategies a-plenty, the BCF has proved extremely hard to land. For some local systems, dropping a requirement to share financial risk into a less than functional set of low-trust interagency relationships was always going to prove incredibly challenging.
To develop solutions to this problem, CIPFA’s health policy team have been holding round table discussions with finance officers from health and local government across the country. And it’s encouraging how many of them have live examples providing insights into how they are tackling the challenge.
So, what’s to be done? The first task is to recognise, develop and improve the context into which shared financial risk and benefit approaches are deployed. Of paramount importance is:
- Establishing a compelling core shared purpose. What is this all for and is there agreement between all the parties?
- Having a shared understanding of where organisations are operating in collaborative mode and where they are competing, a particularly important consideration for providers.
- Agreeing a route for arbitration that is understood by all parties before there is any need to test it – so that one battle doesn’t end the war.
- Ensuring that plans are clinically defensible to service users and professionals. Short-term management carve ups rarely succeed.
- Establishing sufficiently strong interpersonal relationships between key leaders across the system to sustain it when it gets tough. It usually does, as separate regulatory and accountability routes pull organisations apart.
The second task is to be precise about where risks occur in complex systems, forensic about how to manage them, and comprehensive in ensuring that all the key risks have been considered and addressed. What do I mean by this?
The BCF affected the dynamic of shared risk between health and social care commissioners and between commissioners and acute providers. It focused on those two boundaries exclusively and yet in most systems there are at least six types of boundaries that are constantly in play.
These are:
Commissioner to commissioner – multiple clinical commissioning groups sharing risk; primary, secondary and tertiary care risks compounded by having separate health budgets.
Local authority to local authority – most systems have at least two, if not more, councils involved, especially in county authorities.
Health to social care – the risk between organisations that commission across boundaries, but also between the levels of health and social care expenditure.
Commissioner to provider – often thought of as the only risk in systems to manage, but certainly the most obvious in terms of the impact of a failure to share risk.
Provider to provider – not just acute hospital to acute hospital, but also hospital to community and primary, statutory to voluntary sectors, etc.
Service to service – older people’s care budgets in relation to children’s care budgets, where added emphasis on one can signifi cantly heighten risk to the other if not recognised and managed.
If leaders fail to identify the risks at each of these separate boundaries and to fi nd ways to share or manage the risks and benefits across them, then it is likely they will only achieve partial success. In these cases, the unidentified and unmanaged risks will come back to bite, and potentially undermine, other efforts.
I heard recently of a case where, after a year of working as a whole system leadership group, the commissioners agreed to share risk and both commissioners and providers agreed how to manage risk. But they failed to spot the tension between providers about the management of community services and their plan stalled as providers fought covertly for the right to supply.
It would have been a difficult issue to resolve anyway, but the fact it was unaddressed left a vacuum that couldn’t be filled by common sense once the issue surfaced. Lo and behold, confidence in whole system working also stalled as all the parties began to lose confidence in its ability to transform their system at the pace they had hoped and planned for.
Therein lies the rub – if whole system working is to be successful rather than a short-lived fashion, some key markers of success need to be defined. But it also needs forensic assessment and management of the risks and the benefits at each of the organisational interfaces and not just an overall, system-wide, fluffy commitment to shared working.
Mike Farrar is CIPFA’s strategic adviser on health
