Health Service Focus

12.10.16

No ‘easy fix’ to problems facing NHS finance, despite new planning guidance

Paul BriddockPaul Briddock, director of policy at the Healthcare Financial Management Association (HFMA), discusses the new two-year operational planning guidance.

Last month, NHS England announced its first two-year operational planning guidance, and set out strict new requirements for providers to meet the challenges facing the NHS in 2017-18 and 2018-19. HFMA members have been calling for longer-term funding settlements for years as well as more realistic efficiency requirements and an earlier timescale for agreement on financial plans for the year ahead. In that respect, the report is fully welcomed as a step forward in the right direction.

The operational planning guidance gives NHS finance staff more opportunity for long-term planning to be put in place. It also supports the need for the NHS to work more widely as a system but with clear visibility of organisational control totals. The themes outlined in the guidance such as two-year contracts, earlier planning and a move to a system focus are all key areas for HFMA and were recently outlined by the national planning workshops facilitated by ourselves and Future-Focused Finance.

We also support the decision made by NHS England to go against previous plans to move all follow-up outpatient activity to a single block payment. Finance staff and HFMA members expressed their concerns about this proposal as a ‘backwards step’, which would cause organisations to face further financial disadvantages. It’s encouraging, therefore, that NHS England has listened to the concerns voiced by NHS finance directors and introduced a new scheme that is set instead to increase the percentage of follow-up costs bundled into first attendances. It is essential to align the payment system with the aim of reducing follow-up attendances where possible whilst still reimbursing appropriate follow-up appointments. The revised approach makes this a much clearer aim.

However, although HFMA fully welcomes the operational planning guidance, it must be stressed that there is no ‘easy fix’ to the problems facing NHS finance. The current turmoil in the NHS has many financial obstacles to overcome and, in the short term, finance directors face many large-scale challenges. On that basis, a detailed plan of action is required, with input from commissioners and providers, to demonstrate how they deliver the recommendations in the new guidance, while also supporting the delivery of the local Sustainability and Transformation Plan (STP).

Most importantly, it is key for national bodies to work together in order to help both commissioners and providers achieve the necessary results.  There is more work to do and we look forward to seeing the full operational plans for both years from providers and commissioners when they are submitted at the end of December.  

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