The Integrator: The ‘race to the bottom’ in ICS finances

Astute reform thinker Paul Corrigan this week made another powerful critique of the current NHS financial regime: “At the end of the year trusts that have made a surplus are expected to hand over that surplus to trusts that have made a deficit. Crucially this undermines their incentive to do the hard work of ending the year with a surplus.” Paul describes it as “a mug’s game”; Joe Rafferty calls it a “race to the bottom”.

They aren’t alone in their frustration, and the issue runs a bit wider than whether foundation trusts can accumulate cash to spend in the future. Experienced chief executive officers speak of bafflement about how local financial fortunes are now determined from area to area and month-to-month, in the post-covid world, as they go through another credulity-stretching planning round.

Professor Corrigan – who has been working with the Labour health team lately, as well as doing lots of blogging – says the Treasury is fed up with the broken incentives, and that changes are now afoot.

NHS England was indeed asked around the spring Budget to draw up better “incentives” for local productivity. Officials may push for new capital rewards at the integrated care system level – rather than for individual providers – but any benefit at whatever level will be hugely restricted without a change to HMT’s own CDEL rules (plus the 2022 legislation), plus the severe lack of capital to go around.

It’s unclear, anyway, whether such an approach would solve the problem Professor Corrigan describes.

ICBs’ role in balancing their systems’ revenue budget – in doing so smoothing deficits/surpluses across providers – has emerged as a central part of system dynamics and influence; designed to give strong incentives towards integration and collaboration. Throwing it out would be another big upheaval.

Part of the answer may be systems (and NHSE) simply getting better at judging the efficiency and effort put in by each of their trusts and finding ways to reward it. Along the same lines, could there be solutions in new approaches to contracting, with integrated care boards delegating financial risk and reward to successful trusts/collaboratives?

The secret seven

One worry for ICBs which I’ve covered before is the lack of work to transform general practice and wider primary care, despite this being a huge part of the task at hand. A big reason for that is that NHSE has also failed to prioritise this, instead being consumed by short-term, minister-driven recovery plans, while leaving the 2022 Fuller stocktake recommendations on ice.

So NHSE’s recent move to task seven ICBs, led by Suffolk and North East Essex ICB chief executive officer Ed Garratt, with some serious-sounding work on it is a welcome break in form.

The idea is they will first do some quite rapid analysis to size up the problem, then try to describe how to operationalise the much-discussed vision; bridging practice, primary care network, neighbourhood and community services.

It’s unlikely to be an easy ride. First, the ICBs have to convince GPs to take part, at a time they’re contemplating “work to rule” limits on their work over a paltry funding uplift; not to mention increasing numbers capping their work unilaterally, and with local medical committees even more likely to object than usual. The ICBs have to select a PCN/large-scale GP entity to take part in their patch, from the jungle of very varied, and sometimes conflicting, entities in this space.

The operational changes will have to be big enough to make a difference (and to serve up to a sceptical incoming government) without falling foul of the many professional and political sensitivities in GP land, or the overriding priority of attracting and retaining GPs.

In an ideal scenario, the work will help persuade a sceptical Treasury to put in substantial multi-year investment alongside provider reform; and to rewrite the long-term workforce plan so it actually increases the numbers of GPs and other generalists, instead of widening the gap even further.

Taking it wider 

At this early stage there seems to be a focus on areas with emerging “primary care provider collaboratives”, but how these will develop is, for now, variable and pretty opaque. The NHS Confederation primary care network has championed them and is working on taking them forward.

It has also previously called for leading PCNs to be given freedoms and backing “to test out new approaches that support the longer-term objectives”. Network director Ruth Rankine tells me “It’s good to see this now being adopted” but: “We believe the programme could go further by testing new approaches on a larger scale e.g. through GP federations or PCN alliances building on some of the innovative work our members are doing around the country.”

She said: “Our ambition is that PCNs are commissioned to define the needs of their local population, design the services and workforce that meet those needs and deliver those services against a set of agreed outcomes – that’s how we will get a real focus on the original aims of PCNs… 

“Ultimately, we need an infrastructure that supports local general practice, at the same time as optimising new ways of working through multi-disciplinary teams, realises opportunities for greater efficiencies of scale and enables a left-shift of services so that people can be treated closer to home.”

Integrators of the week 

In an East of England double-bill, well done to Bedfordshire, Luton and Milton Keynes ICB for standing up for the need to site services – when possible – where poorer and deprived groups can access them (just as importantly, the ICB is also seeking a new cancer diagnostic centre in diverse and under-diagnosed Luton). And to Mid and South Essex ICB (presumably with a bit of help) for securing Tom Abell, who’s got East of England Ambulance Service moving down the turnaround path, as CEO.