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Providers asked to 'sort themselves out' in 2016

Next year will be the right time for all NHS providers to “sort themselves out” by creating stability despite the health service’s widespread deficit, NHS Improvement CEO Jim Mackey has said. Report by Luana Salles.

Speaking at the Healthcare Financial Management Association (HFMA) annual conference today, attended by NHE, Mackey made very clear that providers would have a unique opportunity to tackle their tough economic positions from 2015-16.

To do that, he said, it is very important that they do not “let this year run away”, ensuring that they close the year with as many improvements in place as possible.

He kicked off his speech discussing the tremendously difficult situation the NHS finds itself in – with mammoth deficits, unprecedented agency spend, vacancies even at financial director and chief finance offer level and a level of regulatory intervention that would once have seemed extraordinary but is now business-as-usual. But Mackey quickly shifted to focus on the possibilities for change in 2015-16.

Using cash allocated during the Spending Review – which he argued was an excellent deal for the health service – providers will be able to implement “substantive changes”, participating in an NHS that will move to a virtually new system within the next few months.

Healthcare regulator Monitor is all set to publish its planning guidance next week, for example, and Mackey already announced that they are deferring the move towards cost-based HRG4+ until 2017-18. The new tariff, subject to consultation and agreement from Monitor’s board, will feature an efficiency factor of 2% – which Mackey claims will give providers a “really good chance to really get a grip” on their stability and productivity.

While he earnestly admitted that the NHS has “quite a few bad months ahead” as these changes take time to come to fruition, he said 2016 will already begin with a two-stage planning process designed at “sorting institutions out”.

Providers will be asked to hand their plans to NHS Improvement and, in spring, the regulator will implement a long-term patch-based planning process to ensure every region is at speed.

Also essential for the coming year, he said, is to improve the relationship between providers and commissioners to focus exclusively on the deficits. He said there “will be some temptation” for commissioners to focus on rebalancing their own books, but he said the money must go primarily towards rescuing providers from the red.

Recognising this was the “tightest position” the NHS has ever been in during the 20-odd years of his career, Mackey stressed now was the ideal time to deliver on agency and “take the fluff out of our pockets”.

Much like the other speakers during today’s conference – including finance chiefs from NHS England, NHS TDA and the Department of Health – Mackey emphasised the “huge opportunity” embedded in Lord Carter’s savings plan, due to be published in January of next year.

Paul Briddock, HFMA's director of policy, said providers may be questioning the savings plan because most people "don't fully understand how it will work yet".

But the NHS Improvement CEO said providers should not focus on whether the £5bn saving figure is correct, arguing that it might not be exactly that, but that “there’s still a number there”.

As well as calling on all providers “to do their bit” to bring down deficits, Mackey recommended digging out some money next year to be spent for the long term, in a more efficient, collaborative creative fashion. As Briddock later said, it will be essential to shift from "firefighting" the deficit to nurturing enough headroom to focus on new models of care, where most of the savings can be found.

The CEO of a recently created organisation born from the merger of Monitor and NHS TDA, Mackey was evidently excited – albeit down to earth – about the next stage of the health service’s future and the opportunities within. The organisation itself is not much different, he said, what with most of its staff being young NHS employees.

One of the steps they are already taking, for example, is building a regional infrastructure that will allow providers to find people they can “recognise, trust and work with”.

But the regulator will not be doing its work alone, with Mackey promising that the body would be working “cheek by jowl” with NHS England and the CQC.

Finishing the speech on a more positive note than he started, the CEO reminded the finance chiefs in the audience to let the regulator know about the issues in their providers as soon as possible.

“The sooner we know of your problems, the earlier we can help fix it. It is unrealistic to think we’ve already seen everything,” he concluded.

NHE will report more on the HFMA conference tomorrow.


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