03 October 2003
Think ahead, NHS chief tells boards
Health service boards must begin to think strategically about the impact of soon-to-be-implemented changes, NHS England finance and investment director Richard Douglas told the annual CIPFA health conference in Bournemouth last week.
He said the NHS had made 'real progress' on improving outcomes, building capacity and reducing waiting times. It had also introduced new systems, such as three-year financial allocations and budgets, as well as organisational change. But he added that other changes had not been taken up so universally.
'We have taken the first step on the road to introducing payment by results but I get a different impression about how much people have taken it on board. Some are really using it while others are just playing with it. I would also ask: "Are we planning for the impact of Patient Choice?" I worry that some of the long-term planning is based on an old world view.'
An example of this 'old world' thinking had come up in the planning stages of Private Finance Initiative hospital schemes, he said. Some trusts were still discussing the level of funding that primary care trusts would agree to give the new hospital as part of the PFI affordability process.
But payment by results and Patient Choice would mean that PCTs would not be able to guarantee this funding as patients may choose other hospitals.
'We must start thinking about how we can use financial flows, how to make foundation trusts work, how Patient Choice will work. We need to be planning on this basis,' he added.
Bob Dredge, the Department of Health programme manager for financial services reform, told the conference that some NHS organisations were failing to take payment by results seriously
'There has been no change in the timescale. We are going ahead from 2005. Some people ignored it because they thought 2005 was a long way away and others thought it just might go away; but it is not going to go away.'
Payment by results was not just an issue for accountants, Dredge said. 'It's not just about moving money around. It will underpin Patient Choice, investment, devolution and plurality of provision.'
Don't be distracted by targets, trusts warned
The NHS's focus on targets could detract from the prime task of improving the quality of its services, a leading health inspector told the CIPFA health conference.
Dame Deirdre Hine, chair of the Commission for Health Improvement, said the NHS was getting better, but the importance afforded to meeting targets such as waiting lists might distract trusts' attention from more important areas.
'With the new investment in the NHS, it is clear that Gordon Brown will be watching closely where all this extra money is going. This will require a greater focus on value for money in the NHS and quality for money,' she said.
'For most of my professional life boards have talked about money, and when they talked about patients, it was only in terms of activity and volumes.'
This had changed to some extent now chief executives had been given responsibility for the quality of care, though there was room for improvement.
'There must be a greater focus on patients' needs and greater investment in the quality of leadership right across the board. The new financial flows regime could divert attention from cost to quality,' she said.
'We also need organisational stability but it is quite clear we are not going to get that – at least not until the government achieves its ambition and all trusts are foundation trusts.'
Patients wanted effective treatment, good outcomes and services that were well-organised and quick and easy to use. They wanted to be treated with dignity and respect and in a safe, clean and comfortable environment, she added.
Hine has declined to seek the post of chair of the new Commission for Healthcare Audit and Inspection, due to take over NHS inspection on April 1.
Debt burden is 'causing concern' to the auditors
The underlying financial position of some NHS organisations remains 'difficult', according to auditors.
Peter Wilkinson, Audit Commission director of health, told the conference that feedback from auditors suggested that while the NHS in England may have had a small surplus overall, the underlying debts were causing concern.
'In quite a number of places the financial position is difficult. We are doing a lot of work with strategic health authorities with the biggest problems, identifying what's causing them and what can be done to manage them better.'
He added that the commission had launched a major study into financial management in the NHS.
Auditors had also told the commission that there were concerns about the refinancing of Private Finance Initiative schemes, while primary care trusts needed to ensure they had the basics of financial control in place.
There were some problems emerging in shared services organisations and NHS bodies must be more open and honest when things went wrong, he said.
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