Published: 22/07/2004, Volume II4, No. 5915 Page 31
Any suggestion that the Audit Commission's role has been stripped down is guaranteed to result in an angry letter from chair James Strachan.
It is true that the national valuefor-money role has gone. And the automatic right to audit the accounts of foundation trusts was one concession ministers did not accede to last year as the legislation went though parliament. And then there is the enormous remit given to the Healthcare Commission, the latest watchdog on the block.
But misconceptions that the Audit Commission is a shadow of its former self are the reason why commission health portfolio managing director Andy McKeon comes to an interview with HSJ armed with a long list of projects that will be rolled out this year.
The topics are familiar to anyone who has spent time listening to the woes of the average NHS finance manager - the consultant contract, Agenda for Change, the national IT programme, the National Institute for Clinical Excellence and, of course, payment by results.
Mr McKeon, who was Department of Health policy and planning director when payment by results was being developed, supports the principles behind the scheme. The devil is in the details, in particular in ensuring the incentives unleashed are coherent with the overarching aims of health policy.
One major concern is the impact it will have on primary care trusts. 'PCTs have a certain requirement to pay but at an uncertain level of demand, ' says Mr McKeon, 'and therefore we will see that demand management is pretty key'.
'There are parallels with this system and, say, the treatment of prescribing budgets, where PCTs have a requirement to pay for the cost of drugs but they can only marginally influence the demand. Payment by results has some of the elements of that, but on a much bigger scale.
'Where will PCTs go if hospital activity rises?' he asks. 'Previously they may have said they can't afford it. Now they can't say that.'
Mr McKeon has some confidence in finance managers.
'I think the strengths [of the NHS] are actually in financial control and its ability to achieve financial balance. The NHS is very strong at both things. There have been in one or two cases spectacular failures, ' he says, no doubt thinking of North Bristol trust, which shed£44m in losses last year. 'But I do not believe that is typical. It seems the overall ability of trusts to reach financial balance is going to be difficult but they will manage.'
He adds: 'Its weaknesses are more in having the right information and being able to use it to make the best use of the money That is available - and That is particularly true in PCTs.
'How have waiting-list targets been met? It is through people working harder, particularly at the year end, and the expensive way trusts use the private sector.
The solution does seem fairly obvious. Perhaps actually better information and more forethought would have brought better financial results.'
He is keen to talk about some recent disasters. 'There are some parallels for North Bristol and Mid Yorkshire Hospitals trusts.
In both cases there had been mergers, they were trying to run new and different financial systems, there were questions about financial reporting. It turns out there were underlying problems with trusts and underlying weaknesses with the management of some of those trusts that hadn't been addressed and there had been very poor controls on agency staff. There was weak challenge from nonexecutive directors. Put those things together and you get something unpleasant.
'With places like Worcestershire, Cornwall and South West Peninsula It is much harder to say why. They are difficult as economies rather than as institutions, ' he suggests.
Looking ahead, Mr McKeon is clear on the challenges. 'We have not cracked waiting lists. There is a mountain to go to get to six months and the scheduled three months [by 2008]. Let's not kid ourselves: we have not done the hard bit.
'Secondly, the real experience of patients of the NHS has all been about waiting for diagnostics, waiting for follow-up and waiting for the treatment. The patient experience is very mixed.Yes, the outpatient appointment arrives very quickly, but as for the real issues - the shift to primary care and community care - we are really in the low foothills.'
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