This article was first published in the March 2014 UK edition of Accounting and Business magazine.
Partnership is the name of the game as the NHS moves to being a fundamentally different type of service. As the centralised, top-down structure is replaced by a more diverse and fragmented system, so the health service has to find new ways to coordinate and cooperate. Nowhere is this more important than in the relationships between clinicians and finance professionals.
The ‘future-focused finance: making people count’ strategy is at the heart of a new approach to bring the finance function even closer to the centre of decision-making. With demographic changes creating rising financial demands on the service – NHS England projects a possible funding gap of £30bn by 2020/21 based on the current model of care – the emphasis in the NHS must increasingly be on value for money and improving outcomes, not just a simplistic approach to cost control.
Mark Orchard FCCA is finance director for NHS England (Wessex) and leads for the service on future-focused finance. He explains: ‘What we all want from finance – clinicians, general management and the finance community itself – is a consistent focus on value as well as cost, with value being a function of clinical outcomes, service quality, patient experience and cost. All too often the misplaced perception of finance is that the only currency is cost. We need to become more comfortable in facilitating a broader focus on value.’
The emphasis on value is part of a wider stress on thinking strategically. ‘Finance leaders are sometimes accused of being short-term operational, not strategic, says Orchard. ‘We need to move the discussion onto being more proactive, working with our close partners on how we can rather than why we can’t. By simplifying often needlessly complicated approaches we will find finance more able to influence widely in support of continued improvements to health and social care delivery.’
Given the financial pressures that the NHS is under, finance professionals must become more closely involved in key decision-making. To do this they must develop effective working relationships with clinicians. Pre-engagement work for future-focused finance clearly established that clinicians were ‘dauntingly positive’ about a closer partnership with the finance function, says Orchard.
‘This is as much about culture as it is about technical skills,’ he explains. ‘It is about involving everyone who works within NHS finance, in every role at every level.’
The NHS finance function – almost 15,000 people in over 400 statutory bodies – has traditionally held a key position in keeping the service together during periods of significant change such as the current process of transformation. So, argues Orchard, it falls to finance professionals to ensure the local service continues to pull in the same direction.
‘We know the challenges,’ he says. ‘Demand is growing. Funding is flatter. The health commissioning and provision landscape is still new. So our colleagues are looking to local finance leaders at every level to lead and support the changes that need to happen. This is why the six national heads of the NHS finance profession came together to initiate future-focused finance.
‘No one needed to be persuaded of the need for an integrated response. The finance function has always seen itself as having a unique professional network, whether working in providers, commissioners or at arm’s length or regulatory level. And all the national finance directors were insistent that development continued in a cohesive way, despite the new structures introduced as part of the Health and Social Care Act.
‘Many of the solutions we need to see as a health service will need to be across whole health economies, with health and social care integrated around patient needs. Our unity as a profession is one of our great strengths and given the integration agenda, developing the function as a whole, rather than in silos, has to make sense.’ This is especially timely given the emergence of a new generation of leaders, finance, clinical and managerial, because of the changes to commissioning.
At the heart of the new NHS finance strategy lies a commitment that local decisions will not be imposed from the centre, though they need to become more evidence-based to make best use of available resources. There must be comprehensive engagement and buy-in to a new culture and practice, leading to local empowerment. Yet the service also needs to develop mechanisms to share good practice.
Essential principles were laid down in a ‘pre-engagement process’. These are led by the need to secure excellence through the allocation of resources to give the highest quality of care, which is also safe and sustainable. Processes and systems must be efficient. The finance function, clinicians and general management must operate in effective close partnership, backed by mutual understanding. Meanwhile, staff potential needs to be fulfilled, to make the NHS a truly great place to work.
A wider process of engagement has now been launched, in which the whole service and key stakeholders are invited to join. The main focal point for this is a communications hub based upon the future-focused finance website. In addition, there will be a three-month engagement with key partner bodies, including ACCA, leading business schools, NHS managers and parts of the private as well as the public sector.
After this wider conversation is completed, there will be a reflection on how to deliver the strategy. That will consider how to support the decision-making at regional, local and individual levels. A different balance between the national and the local goes to the heart of the NHS reforms. It provides a challenge that the leadership of the finance function in the NHS is determined to meet and overcome.
Leading the way
The NHS Finance Leadership Council was formed through the ‘future-focused finance: making people count’ strategy to define the finance function of the future. It consists of the six national heads of the finance profession in the NHS: Paul Baumann, CFO for NHS England; Richard Douglas, director general for strategy at the Department of Health; Andy Hardy, president of the Healthcare Financial Management Association; Stephen Hay, managing director for provider regulation at Monitor; Bob Alexander, director of finance at the NHS Trust Development Authority; and Steve Clarke, finance director of Health Education England.
Paul Gosling, journalist