NHS trusts need to believe their financial redemption is possible - and for that we need to produce more evidence, says Alastair McLellan
When the provider sector was set a stretch target of reducing its deficit to £250m this year in order to prove its financial discipline to government, many eyebrows were raised.
It has now been clearly recognised at the top that there was in reality never a hope in hell of achieving that number.
The centre, however, is firmly clinging to the view that the officially planned shortfall of £580m remains achievable.
HSJ’s analysis forecasts after quarter two suggests trust finance directors are significantly more pessimistic. Those at NHS Improvement say “twas ever thus” and expect the sector’s formal forecast position at this halfway point to be similar to that at quarter one – only a little above the £580m figure.
“Hold your nerve” is the mantra from the centre, where officials are keen to stress the hard work being done at a local level to control costs, and point to the improvement, however slight, on the year-to-date position at this time last year, despite extra unavoidable costs. They also signal specific interventions beginning to work.
The “conversations” which regulators started in the summer by controversially listing trusts with large pay bill growth, is said to have sparked meaningful savings, without compromising safety, at two thirds of those organisations.
The efficiency drive inspired by Lord Patrick Carter’s review has finally got an implementation plan and is producing some anecdotal evidence of progress.
National leaders contend that central and local initiatives will accelerate savings in the back half of the year, landing the provider deficit more or less on target and beginning 2017-18 close to a breakeven run-rate (with the central sustainability fund).
It is entirely possible – given the valuable PR win on offer – that the provider sector deficit will be cut down through a combination of raiding commissioning and other reserves, and through further tactical accounting.
Ranged against that view is the memory that deficits often increase in the second half of the year. The particular threat in 2016-17 is that savings are even more back-loaded than is usual; and that the sustainability fund rules – meaning cash is released to trusts reporting they are on plan and cannot be taken back later – give finance directors a good reason to hide problems.
This sharp contrast between hope and experience speaks to an existential truth at the heart of the NHS’s financial challenge: that it can only be met if the service believes it can be met.
Belief is vital to stop trusts effectively giving up and waiting for the bailouts which history has taught them will normally arrive. This time they may not, given the state of the nation’s finances, further weakened by tax receipts falling in the wake of the Brexit vote.
What is needed – both to create more faith on the ground and build confidence with the NHS’s masters in government – is greater clear evidence of efficiency improvements. This would educate and inspire others, as well as showing real momentum in the system’s attempts to attack its cost base in preparation for the even tougher times ahead.
Details of the kind of sums saved as a result of the pay bill “conversations”, and by whom and how, is the type of evidence which would be useful.
The Carter work streams, too, need to produce more robust data, tracking the savings available and achieved. The two priority areas of pathology and back office seem the obvious places to start.
And the programme needs to move with energy to its next stage: trauma and orthopaedics, where the work of Tim Briggs has created a clear direction of travel, and radiology, where new technologies promise better value for money, are obvious areas to focus on.
Only transparent and comparable data of this kind will dent the doubt which persists about the service’s financial challenge and ability to save money.