HSJ’s expert briefing on NHS finances, savings and efforts to get the health service back in the black.

Prepare for accountable care

There is almost universal ambition in the NHS move to new accountable care models, in which providers are incentivised to contain costs within the health economy budget.

Fulfilling this ambition remains a long way off (or “too bloody complicated”) for most parts of the country, but there is talk of it becoming a reality in 10 areas from April next year.

I hear serious discussions are taking place with the “accountable care systems” named by NHS England, as well as the devolution areas of Greater Manchester and Surrey Heartlands, about the potential to operate with “system control totals” from 2018-19.

These would be the sum of, but potentially replace, the organisational specific control totals that trusts and CCGs currently plan for, and provide a spending limit for the overall system.

This would give flexibility to the financial plans of each organisation within the system, at the planning stage and in-year, and in theory get provider and commissioner incentives facing in the same direction.

However, this would only really start to mean something if there are new rules governing the £1.8bn sustainability and transformation fund, which is currently awarded to providers that meet their control totals.

Unless the rules are rejigged to allow STF payments to be triggered by delivery of the system control total, ACSs will remain ill defined and indistinct from other areas.

The Treasury, which oversees the STF, would likely have to approve a change in the rules and will be nervous about departing from the current set up, which has so far served the primary purpose of reducing the provider deficit.

If HMT can be persuaded to tweak the rules, there would then be questions about how STF payments are divided up within a health economy.

Should they still be allocated to individual providers or should it be given to system leaders to distribute?

The latter would be more in the ACS spirit and place much greater leverage in the hands those leading the system.

If we take Greater Manchester as an example, the power and influence held by Jon Rouse and the devolution team is largely down to their control of the purse strings of the region’s £450m transformation fund.

In the absence of an obvious body to hold and allocate the STF money (such as Greater Manchester’s devolution team, which is ultimately part of NHS England), it’s unclear how this would work in the ACS areas.

If the money is held by commissioners – perhaps by a lead clinical commissioning group – this would naturally provoke uneasiness among providers and be a true test of their commitment to collective thinking.

An easier option, given that providers have gotten used to the current STF rules, could be to use some of the £1.6bn of extra funding announced in the budget instead.

Out with a bang

King’s College Hospital Foundation Trust has been placed in financial special measures, after revising its forecast deficit to £92m this year, against the planned £38m.

The finance director and chief operating officer resigned last month, and chair Lord Kerslake went out with a bang over the weekend by blaming the government and regulators for underfunding the NHS.

He left little doubt that he had jumped before he was pushed, writing in The Guardian: “The secretary of state and the regulator normally extract a price for this at the top and King’s will be no different.

“We could fight back, but this puts King’s future at even greater risk. The right thing for me to do therefore is to step down and to do so publicly.”

The concerns raised by Lord Kerslake are justified and echo those being made by NHS England. But you can’t get away from the fact that the trust’s financial performance has been particularly poor.

In an interview with HSJ, Jim Mackey, the recently departed chief executive of NHSI, said last week the London trust “hasn’t hit a single number that they’ve put to us in the two years I’ve been involved in NHSI”.

Model hospital

I was at the Healthcare Financial Management Association conference last week and had a go on NHS Improvement’s “model hospital” tool.

It’s very easy to use and looks fantastic, but there will still be questions about the data within it.

The indicators I looked at seemed to be based on reference costs collection from 2015-16, for which there was widespread non-compliance from trusts making their submissions.

It’s not clear whether the quality of the collection improved in 2016-17, as an assurance report does not seem to have been published along with the new data.

Grizzly Bob shows his soft side

The shock of the conference came when the grizzly Bob Alexander cried at the end of his final speech as a national regulator.

Two standing ovations and a lifetime achievement type award suggest he will be greatly missed by the NHS finance community. The former Trust Development Authority chief executive is leaving NHSI to chair Sussex and East Surrey STP.