It is a basic law of science that energy in an isolated system cannot be created or destroyed and is continuously recycled.
I believe there is a lot we can learn from this insight in how we plan public sector finance.
In chemistry, one means by which this recycling is achieved is through reaction coupling – two reactions are brought together simultaneously where one of the reactions releases energy and the other reaction needs energy to proceed.
The energy releasing reaction occurs ever so slightly before the energy consuming reaction so that the energy released can be used to drive the energy consuming reaction. This creates an obvious win win.
‘There are often times situations where there is a critical lack of resources for important initiatives, for innovations to be brought into the system or for pilot projects whose results could lead to new ways of working that dramatically improve how the system functions.’
In public sector resource flows, there are often times situations where there is a critical lack of resources for important initiatives, for innovations to be brought into the system or for pilot projects whose results could lead to new ways of working that dramatically improve how the system functions.
At the same time, there is often times waste in the system and there are opportunities to generate savings by cutting waste and disinvesting in low value activities.
An ideal situation would be to financially couple the former and latter so that the liberated resources from the latter could be used to fund the former and in general improve the functioning of the system.
Unfortunately, we often see that the liberated resources are directed to things that are deemed to be more pressing and do not necessarily generate greater value in the short, medium or long term – this is more a result of lack of communication and inability to couple the resource liberating cutting of waste with the resource consuming innovation initiatives.
In a recent briefing paper by the Decisions with Value (DwV) initiative and NHS Confederation, five essential components for value-based approaches for health and care were highlighted (with value in health and care being defined as delivering better patient and population outcomes while optimising resource utilisation), which, if adopted, could help healthcare systems generate greater return on investment of taxpayer funds.
The DwV initiative is an independent steering group of UK health experts – funded by pharmaceuticals company AbbVie UK – and aims to help the NHS achieve the best health outcomes possible within a fixed budget or resources available.
The five key components include:
- Learning and adapting through the adoption of innovation
- Managing risk
- Making best use of data
- Thinking about pathways across the whole system
- Listening to patients/service users
In health and care services in the UK and globally, increasing need and demand due to aging and growing populations, even assuming considerable increases in resources being invested into the services, has created tremendous and growing pressure to do more with less.
If DwV’s five key components were embedded within health and care systems it would allow for a much greater understanding of the key opportunities to liberate resources and the opportunities available to increase value in health and care services.
A further step after this would be to promote better and more active communication between the key stakeholders– i.e. commissioners, providers, clinicians, finance leads as well as the perspective of patients and service users to identify what matters most to them.
Taking better account of resource flows, with the hope that this could help to engineer higher value “financial reactions”, would drive liberated resources to the opportunities that would add greatest value into the system.
This could help to drive resources to the initiatives that would relieve pressures in the short, medium and long term and help us to build more sustainable and resilient healthcare systems.
The general principles embedded within DwV and the five key components to deliver value are generalisable across any sector in the public sector.
Embedding these principles into the public sector, within and between different departments, to engineer and deliver better financially coupled reactions would ensure the delivery of greater return on investment of taxpayer funds and also help to build a more sustainable and resilient society.
