The huge uncertainties facing NHS providers mean Monitor will have to focus less on “the numbers” in trusts’ financial plans and more on their capability to deal with change, the regulator’s chief executive has said.
David Bennett told HSJ that mounting financial pressures on the health service had created a “pressing need” to accelerate major reforms to the way care was delivered, and that Monitor needed to play a significant role in “turbo-charging change”.
The regulator would in future place less emphasis on the long term financial projections of foundation trusts or trusts applying for foundation status, and more on the capabilities of those organisations and their leaders, he said.
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Monitor would also have to be flexible in allowing FTs and aspirant FTs to move to new business models, he added.
Mr Bennett told HSJ: “We are not going to get change happening if Monitor is rigid in the way it looks at business models and says, ‘Where’s your five year track record? Where’s your five year plan?’ No organisations in the [FT] pipeline will be able to change if we require that.”
The drive to shift less-complex acute care out of hospital settings and more-specialist work on to fewer, larger sites had left those running district general hospitals “caught in a pincer movement”, he continued. If they were going to survive, they would have to “reinvent what a district general hospital does”.
“That’s the sort of change I’m talking about,” he said. “We need organisations, we need [leaders] of those organisations, that are capable of dealing with that sort of change.”
The real test of whether an applicant or existing FT was “up to the job” would be their capability to “make change happen in their organisations” and to “deal with the change going on around them”, said Mr Bennett.
Monitor’s new strategy, published this week, said to assess this it would focus more on organisations’ strengths in areas that “drive long term performance”, including individual leadership, strategic planning and operational performance improvement.
However, Mr Bennett added that this was not about “raising the bar” for would-be FTs, and in exchange for its closer attention to these capabilities, Monitor would reduce its emphasis on “the numbers” in trusts’ long term financial models.
“The notion that you get very hung up about any numbers beyond year three [of a financial plan] I think is getting a bit out of date,” he said.
“For an applicant trust’s ongoing business, it’s changing so much, the uncertainties get so great when you get much further out.”
Monitor has already begun talking to the NHS Trust Development Authority – which is responsible for shepherding the remaining NHS trusts to FT status – about the implications of its planned shift in emphasis.
Monitor’s new strategy also promised to “lower barriers to change” by accepting that “foundation trusts must be able to take measured risks as they shift to new business models”. Not to do so, it explained, could lead to “much greater long run risks for the sector as a whole”. The regulator added that this in turn meant “we must all accept” that some providers may fail.
Asked why this increased flexibility was necessary, Mr Bennett gave the example of an NHS trust board member who told him that their trust could not pursue its aspiration to become an integrated care organisation because it had to become an FT. He explained that he wanted to send a “very clear signal” that “any thinking of that sort” was wrong.
The strategy also says Monitor will work with NHS England to help local commissioners develop “health economy strategies” that could assist providers with “underlying structural problems” to avoid Monitor’s failure regime.
Mr Bennett said placing FTs in the failure regime - as Monitor did with Mid Staffordshire Foundation Trust - was the “last resort”, as it was “expensive”, “disruptive” and “not something we should happily do”.
Bennett sees ‘advantages’ to Milburn proposition
David Bennett has admitted he can see “two advantages” to Alan Milburn’s suggestion that the NHS Trust Development Authority should be scrapped and Monitor given responsibility for regulating all NHS providers.
Mr Milburn, who as a Labour health secretary was responsible for the policy that introduced foundation trusts, gave a speech earlier this month in which he said the TDA “should be abolished and its resources made available to Monitor to help turn round those organisations that are in trouble”.
The authority is currently responsible for getting the remaining 99 NHS trusts to foundation status, while Monitor retains a responsibility for regulating FTs in addition to the overall healthcare sector regulator responsibilities it was given under the Health Act 2012.
Asked what he thought of Mr Milburn’s proposition, Monitor chief executive David Bennett told HSJ: “I haven’t asked him why he thinks that’s a good idea, and I was at his speech and I don’t recall him explaining why he thinks it’s a good idea.”
He continued: “These [non-foundation] trusts… some of them need a lot of help, somebody’s got to do it, why us rather than the TDA?
“I suppose I can see two reasons. One I completely support, which is becoming an FT shouldn’t get in the way of doing the right thing.” By this, he explained, he meant “we should never get into a situation where we’re saying the right thing for this trust to do is change its business model… to provide a different pattern of care, but it isn’t going to do it because it needs to become an FT”.
“One advantage of the Milburn proposition is that just goes away as a possible [problem] because his idea was you give them all FT status anyway and then deal with it,” Mr Bennett said. “That’s not the only way to deal with it, but it would be an advantage.”
The second advantage, he continued, is that there would “be some synergies”. “We are trying to work very closely with the TDA, and so far successfully, to avoid any duplication, any overlap, any inconsistency,” Mr Bennett said. “Obviously it would be a bit easier if we were all in one organisation. But it’s a relatively limited part of the solution.”
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