21.07.17
Hoping for cross-organisational change
Source: NHE Jul/Aug 17
Mark Orchard, president of the Healthcare Financial Management Association (HFMA) and director of finance at Poole Hospital NHS FT, discusses the future of NHS finance.
Marking the midpoint of a newsworthy and eventful year, we recently released our latest NHS financial temperature check – a biannual survey which provides an overview of the current state of NHS finance from those working on the frontline. Following a predominantly bleak consensus at the start of the year, the latest survey reveals a slight rebalance amongst finance directors.
Interestingly, the latest financial temperature check demonstrates an increase in confidence in sustainability and transformation partnership (STP) relationships, despite a difficult year of financial challenges for the NHS. Now, an encouraging 50% of finance directors and chief finance officers feel that STP relationships are effective enough to provide cross-organisational change, which is positive to see compared to just 20% six months ago. It is also encouraging to note that almost three-quarters of finance directors believe quality will stay the same or improve over the next year. Although several ongoing concerns remain amongst those surveyed, it is promising to see progress and positive support for STPs and the NHS’s financial future in this way.
It would be naïve to assume that financial challenges for the NHS are coming to an end, however. In fact, faced with efficiency challenges – finance professionals in trusts and CCGs are aiming to achieve savings of 4.5% and 3.9% respectively, compared with 3.7% and 2.6% last year – we can expect things to become even tougher long before they improve. The overarching message here is that finance directors certainly embrace the need for efficiency, and are motivated to deliver these savings.
Encouragingly, the majority of trusts (84%) and CCGs (63%) performed as well as or better in 2016-7 than they expected at the beginning of the financial year. While CCGs are expected to report a combined surplus of £250m for 2016-17, trusts are still reporting a deficit of £791m – so, as with STPs, it is necessary that we do not get ahead of ourselves, but remain realistic and grounded about the rate of our financial progress in the sector.
With 89% of trust and 77% of CCG CFOs still lacking confidence that STPs will close the financial gap by 2021, the challenge ahead lies in retaining the momentum of the confidence increase seen in our latest financial temperature check – and, in turn, finding more ways to be resourceful and collaborative. A particular concern for almost all finance directors surveyed relates to the availability of capital and related investment funds to support the required transformation. Having come to terms with both the small- and large-scale obstacles ahead of us, we must continue to work through these in an honest, transparent and optimistic manner.
The work done so far in reducing the NHS funding gap is another step in the right direction and a testament to the staff working in the NHS, and should be applauded. There is undoubtedly a long road ahead, but, with another push of energy, expertise and focus, the healthcare financial position stands to be in a stronger and more resilient position this time next year.
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