Alex Gild Bright Future for the NHS

February 2018 | Healthcare Financial Management Association www.hfma.org.uk

Alex Gild Bright future for the NHS

News Comment Features Features Professional lives Extra funding spent NHS must not ask Roundtable debate: Wales: new report Technical, events, on current pressures too much of new the key components sets its sights on association news not transformation models of care of value-based care quadruple aim and job moves

healthcare finance

February 2018 | Healthcare Financial Management Association www.hfma.org.uk

Alex Gild Bright future for the NHS

ContentsFebruary 2018

Managing editor News Mark Knight 0117 929 4789 [email protected] 03 News Editor Steve Brown No let-up in financial pressure, 015394 88630 says National Audit Office [email protected] Associate editor Seamus Ward 06 News review 0113 2675855 Increased winter pressures [email protected] inevitably in the spotlight Professional lives Yuliya Kosharevska 0117 938 8440 08 Annual Conference review yuliya.kosharevska@ hfma.org.uk December’s HFMA flagship Advertising event in pictures Paul Momber 0117 938 8972 [email protected] Comment Subscriptions and membership Flo Greenland 0117 938 8992 [email protected] 10 Credit where it’s due Production New HFMA president Alex Gild Wheal Associates 020 8694 9412 calls for increased recognition [email protected] for all staff Printer Pureprint 10 Not just about change More immediate action is needed to keep the service on its feet, says Steve Brown 12 HFMA Professional lives 1 Temple Way, Bristol BS2 0BU Features Executive team Mark Knight 28 Technical Chief executive [email protected] Accounting guidance latest, plus 12 Completing the picture Alison Myles technical and NICE updates A report on the future of health and social Education director care in Wales calls for integrated services and [email protected] 29 HFMA diary a value-based approach Ian Turner Finance director Make a note of forthcoming [email protected] local and national events and 16 New president: the future is bright meetings New HFMA president Alex Gild sets out Editorial policy a programme of support for members and The statements and opinions in Healthcare Finance are 30 My HFMA discusses the debate on the future of the NHS those of the authors and not necessarily those of HFMA. Mark Knight talks about support No part of this publication for HFMA members and plans 20 Debating value may be reported, stored in a retrieval system or transmitted to take a long-term view Roundtable discussion in any form by any means on progress so far with without permission.Healthcare Financial Management 31 Appointments value-based healthcare Association (HFMA) is a registered charity in England Latest job moves, including and obstacles to further and Wales, no 1114463 and Patrick McGahon’s move development Scotland, no SCO41994. HFMA is also a limited company back into the provider sector registered in England and Wales, no 5787972. (page 32) ISSN 1472-3379 20

healthcare finance | February 2018 01

news News Short-term focus hampering transformation, says NAO “The public purse may be better served By Seamus Ward groups became increasingly by a long-term backlog maintenance and reliant on non-recurrent savings settlement that said NHS Improvement Increased reliance on financial support and to achieve efficiency targets. The provides a stable and NHS England should non-recurrent savings suggest NHS financial bodies increased their savings platform for sustained provide financial support for problems have not eased, according to the overall – between 2014/15 and improvements” local partnerships making the National Audit Office. 2016/17, CCG savings rose from Amyas Morse, NAO slowest progress. In its sixth report on NHS sustainability, £1.4bn to £2bn, and for trusts from ‘The NHS has received extra the NAO said it seemed additional funding £2.8bn to £3.1bn. But over the same funding, but this has mostly been was spent on helping the NHS cope with period, the proportion due to one-off savings used to cope with current pressures and has current pressures rather than investing in the rose from 14% to 17% for commissioners and not provided the stable platform intended from transformation needed to put the service on a 14% to 22% for trusts. This increasing reliance which to transform services,’ said NAO head sustainable footing. on non-recurrent savings posed a risk to Amyas Morse (above). The report, Sustainability and transformation financial sustainability, the NAO said. ‘Repeated short-term funding-boosts could in the NHS, said the overall financial position The report said the STF was set up to return turn into the new normal, when the public purse improved in 2016/17 – a £1.8bn deficit in trusts to aggregate financial balance and give may be better served by a long-term funding 2015/16 became a £111m surplus in 2016/17. them the stability to transform services and settlement that provides a stable platform for But it was hard to measure the underlying improve performance. However, the financial sustained improvements,’ he added. position, and two figures indicate finances were reset in July 2016 moved the objective away Nuffield Trust senior policy analyst Sally not improving. from transformation to help trusts target a Gainsbury said trusts had been grappling with First, there was a sharp increase in the cash combined £580m deficit in 2016/17 (the final rising prices and significant cuts to their income support given to providers. This money was deficit was £791m). per patient. ‘This has meant they are relying not part of contracts for services, suggesting Most of the STF (60% – just over £1bn) was increasingly on one-off savings and bailouts providers were struggling to deliver patient care used to reduce or eliminate in-year deficits, to balance the books, leading to a significant under their contracts with commissioners, the with the balance being used to create or increase underlying deficit,’ she said. ‘This has left auditors said. surpluses. However, this money will not hospital trusts with no choice but to spend the In 2016/17, national bodies gave trusts £4.1bn necessarily be available to spend in 2017/18 if money earmarked for reforming services – the in financial support not linked to commissioner trusts are again going to meet control totals. STF - on dealing with their yawning deficit.’ contracts. NHS Improvement had hoped the The report made several recommendations: CIPFA has warned that financial £1.8bn sustainability and transformation fund the NHS should move ‘further and faster’ pressures are undermining sustainability (STF) would reduce the need for such cash to system-wide incentives and regulation; and transformation partnerships (STPs). In a support – £1bn of STF was given as cash in year. reassess how best to use the STF to support submission to the Commons Health Committee But on top of this, cash support increased trusts beyond 2018/19; and calculate and publish inquiry on STPs, CIPFA said the need to plug from £2.4bn in 2015/16 to £3.1bn in 2016/17. the underlying financial position in the trust gaps in resources and capacity had taken the Most of this (£2.7bn) was revenue support, paid sector annually. focus away from STPs, with little evidence of directly to trusts to maintain services. The NAO also called for a timetable for the concrete changes or investment in measures that Second, providers and clinical commissioning availability of capital for transformation and will make services sustainable in the long term. Gild takes on presidency Alex Gild became HFMA president at the annual conference in December. Mr Gild (pictured), chief financial officer at Berkshire Healthcare NHS FT, received the chains of office from outgoing 2017 president Mark Orchard. He also unveiled his theme for the year ahead – Our NHS, your HFMA, brighter together (page 16). The conference (page 8) included an awards ceremony for the first 15 students to complete a module of the HFMA’s masters-level qualifications. Tracy Parker (pictured) was the first winner of the Tony Whitfield Award, which will be given each year to the qualifications programme student of the year. Ms Parker, assistant director of contracting at East Riding of Yorkshire CCG, is studying for the higher diploma. • More details about the qualification atwww.hfma.org.uk/education-events/

healthcare finance | February 2018 03 news

Mental heath funding gap grows larger despite income growth in 2016/17

By Seamus Ward 2016/17, while in acute and specialist trusts it Helen Gilburt: grew by 6%. Funding for mental health providers ‘funding gap Though mental health providers in England increased by 5.6% since 2012/13, compared with between mental received significantly more funding in 2016/17, 16.8% for acute trusts. health and acute the gap with acute spending grew wider, The King’s Fund said this squeeze on mental is continuing to according to the King’s Fund. health trust funding, combined with a shortage widen’ Its research showed that 84% of mental health of available staff, had led to workforce pressures trusts received an increase in funding in cash that put the safe staffing of services in jeopardy. terms – in the previous two years, almost 50% of It added that the number of mental health nurses providers had seen a decrease in income. had fallen by 13% since 2009 and 10% of all posts However, with priority given to reducing in specialist mental health services are vacant. difficult to deliver parity of esteem when the deficits and improving A&E performance, The fund’s analysis of Care Quality whole of the NHS was under huge pressure. funding for acute and specialist trusts grew more Commission inspection reports for all 54 While most CCGs had met their commitments quickly than their mental health counterparts. mental health trusts showed staff shortages were to raise spending on mental health, their focus The government has committed to ensuring identified as a problem in more than half of the was on relieving pressure on acute hospitals. parity of esteem between mental and physical providers. This led to a higher risk of inpatient ‘Unless funding grows more quickly, mental healthcare, providing workforce support self-harm and suicide, delays in treatment, health providers may end up implementing and greater equality in funding for mental reduced access to care and bed closures. improvements to some services at the expense health services. The latter measure is being It also looked at a small sample of board of others,’ she said. ‘Despite the commitment of driven through the investment standard papers, finding that trusts had difficulties national leaders, the funding gap between mental for commissioners, which requires clinical staffing wards on a day-to-day basis, relying health and acute NHS services is continuing to commissioning groups to increase spending on on agency and bank workers and staff widen, while growing staff shortages are affecting mental health services each year in line with substitutions – putting in a healthcare assistant the quality and safety of care. their own budget rise. when a registered nurse could not be found ‘As long as this is the case, the government’s The fund’s report, Funding and staffing of NHS for a shift, for example. aim to tackle the burning injustices faced by mental health providers: still waiting for parity, Helen Gilburt, King’s Fund fellow in health people with mental health problems will remain said mental health trust income rose by 2.5% in policy and lead author of the paper, said it was out of reach.’

MPs call for CPD budget to be reinstated

Health Education England has been told that CPD cuts had fuelled nurses’ doubted they would be allowed to take urged to reverse cuts in continuing belief that they were undervalued. CPD courses as they were so busy. professional development (CPD) The report said Health Education The report recommended funding budgets to help address the trend of England’s budget for CPD had fallen allocated to trusts should be ring-fenced nurses leaving the profession. from £205m in 2015/16 to £84m in for nurse CPD. Specific funds should In a report, The nursing the current financial year. also be made available to support CPD workforce, the Commons NHS Employers told the for nurses working in the community. Health Committee said committee that action It added that the government must the NHS was paying was needed as CPD was monitor closely the impact of removing too little attention to vital in ensuring nurses nursing bursaries – it was particularly retaining its nurses could do their day-to- concerned about the impact of and this has resulted day jobs, but also gave bursaries on mature students. in more leaving the them opportunities to Committee chair Sarah Wollaston professional register move into advanced (pictured), said: ‘We met many frontline than joining it. practice. nurses during the course of this inquiry. The report said there In its evidence to the We heard a clear message about were a number of reasons committee, Health Education workload pressures as well as ideas why nurses were leaving the England said it had taken a conscious about how to address these. profession. decision to shift funds to train more ‘We will return to this subject in a year These included workload, pay, lack of nurses for the future, but indicated its to make sure that improvements have CPD opportunities and a general sense intention to increase funding again for been made in nurse retention, working that they were not valued. nurse CPD. However, the report said, conditions, and continuing professional During the inquiry, the committee was even if the funding were restored, nurses development.’

04 February 2018 | healthcare finance news

NAO looks at PFI pros and cons There is no evidence of increased operational efficiency in privately financed NHS hospitals, though there are a number of potential benefits, according to the National Audit Office. A briefing on the rationale, benefits and costs of the private finance initiative and its successor, PF2, said Northern Ireland services need the Department of Health and Social Care had used PFI more than any other radical change, politicians told (127 projects and an aggregate unitary charge of £13bn in 2016/17). Trust By Seamus Ward care to help people stay well and reshape our payments to their private sector partner hospital services,’ he added. range from 5.6% to 20.1% of turnover. Health and social care in Northern Ireland could Projections from the Department of It said private finance had become gradually unsustainable if radical action Finance showed health funding shortfalls of advantages – being off-balance sheet is not taken, local Assembly members (MLAs) £151m-£171m in 2018/19 and £265m-£340m in in government accounts and allowing have been told. 2019/20 under different funding scenarios. public bodies to invest when capital At a meeting with a cross-party group of The scenarios aim to inform an incoming funding is limited. The NAO did not give MLAs at Stormont in January, Department of executive’s discussions on balancing the overall a view on value for money, but said: Health permanent secretary Richard Pengelly budget. Health funding would rise by 4.6% to 7% ‘Our work on PFI hospitals found no said 2018 would be another difficult year for under the scenarios, but the Department insisted evidence of operational efficiency: the local services. Winter pressures were intense and the figures were for illustration and no decisions costs of services in the samples we unlikely to ease for a number of weeks, though had been made. The North has been without an analysed were similar.’ an additional £10m had been found to mitigate executive for about a year. A recent study showed costs such the pressure. Co-operation across health and The three scenarios include: a Budget as cleaning were higher in PFI hospitals, social care (HSC) was also helping, he added. approach broadly in line with 2016/17 and though the Department says costs may ‘Much more radical action is needed,’ he told 2017/18 (with extra funding going to health and not be comparable due to risk transfer MLAs. ‘We cannot consign our hospitals to a education); raising funds through additional and different cleaning standards. future where winter pressures simply intensify charges or reviewing existing policies; and Savings can be hard to achieve given year on year, and the whole HSC system becomes reallocating funds to priorities such as schools the structure of deals, the NAO added. steadily more unsustainable. There are no easy or and health. The public sector has more equity in short-term solutions but we owe it to patients and The HFMA has issued a briefing examining PF2 – it was believed this would reduce our great staff to start making it better.’ the differences in per capita healthcare funding repayments and lower risk, attracting Transformation, backed with strategic between Northern Ireland and England. The pension fund investment. However, the investment in staffing and capacity, was the key document – which presents its findings for auditors said the proportion of debt to to addressing winter pressures and other serious debate, not as a statement of what funding levels equity was similar to that in PFI and problems. ‘We need to build up domiciliary care should be – found a £540m gap between the pension funds had yet to invest. and other aspects of social care, enhance primary modelled need and actual funding in 2015.

PAC demands detail of continuing healthcare savings

The Public Accounts Committee restricting access to care either by Along with the Department has questioned whether clinical increasing eligibility thresholds or of Health and Social Care, NHS commissioning groups will be able by limiting care packages. England insists there is no quota to achieve an NHS England target Spending on CHC grew by 16% or cap on access and that eligibility of £855m savings on continuing between 2013/14 and 2015/16, criteria will not change. healthcare (CHC) spending. compared with 6% for the NHS as PAC chair Meg Hillier (pictured) While spending on CHC will a whole. Estimates have suggested said CHC funding oversight had continue to grow year-on-year, the that spending on CHC and NHS- been poor. ‘NHS England’s demand savings are compared to predicted funded nursing care will increase that clinical commissioning groups growth in spending on CHC and by 45% by 2020/21 unless action is make big efficiency savings will NHS-funded nursing care and must taken to control costs. only add to the financial pressures be delivered by 2020/21. NHS England said that CCGs tackling variation, adopting best on the frontline,’ she said. The The influential Commons were on track to achieve the savings practice, speeding up assessment committee called on NHS England committee said it was unclear how against projected spend and that work, reducing administration costs to give a ‘costed breakdown’ of how this could be achieved without the savings could be achieved by and using better case management. efficiency savings will be made.

healthcare finance | February 2018 05 News review Seamus Ward assesses the past two months in healthcare finance

It was inevitable that tales of winter The figures show a 3.7% rise in A&E attendance day cases and routine outpatient appointments pressures would dominate December and compared with December 2016 and a 4.5% rise should be deferred to release clinical time for January. Amid continuing rumblings about in emergency admissions. Overall, between non-elective care. NHS finances – and the ‘reappointment’ of December 2016 and December 2017 there Jeremy Hunt with an expanded portfolio that was a 2.9% increase in emergency admissions. NHS Providers said the winter pressures now includes social care – persistent cold However, there was controversy over how the marked a watershed for the NHS – government weather and a flu outbreak contributed to figures were calculated. must accept that the service cannot do all that some of the most difficult weeks the service is required of it within the current funding has faced in the last few years. Governments and oversight bodies took steps envelope. In a letter to health and social care to help the NHS cope. The Welsh government secretary Jeremy Hunt, the provider body said The winter pressures hit hard in all four UK allocated £10m to health boards, the ambulance that despite greater preparedness than ever, there nations. By the end of the first week of 2018, the service and social care to help relieve winter were not enough beds and staff to maintain flu rate in Scotland was four times higher than pressures. It has also relaxed the quality and standards of care and safety. It called for a the same week in 2017. GPs in Northern Ireland outcomes framework element of the GP contract review of how the NHS has handled the winter and Wales saw a big increase in the number of until the end of March to allow practices to pressures and insisted decisions must flu-like cases, while in England consultations focus on the most vulnerable and sick be made on the long-term funding for the illness rose by 42% between the first patients. of health and social care before and second weeks of January. Flu and the cold November’s Budget. weather were major reasons for a drop in A&E NHS England allowed the deferral performance against the four-hour target – in of non-emergency elective care to be A new year Cabinet reshuffle Scotland just under 80% of patients were seen extended until 31 January to help trusts brought surprises for the NHS in within four hours in the first week of 2018. cope. The National Emergency Pressures England. Though Jeremy Hunt (left) Panel said over the Christmas period was widely tipped to move on, he Meanwhile, in England weekly situation there was sustained pressure on the NHS remains health secretary with additional reports and monthly figures for December through high levels of respiratory illness, high responsibility for social care. Now health and showed increasing strain on the system. Just bed occupancy, early indications of rising flu social care secretary leading the Department over 85% of A&E patients were seen within the prevalence and suggestions that patients were of Health and Social Care, it is unclear what four-hour standard in December, according to arriving at A&E more seriously ill. The panel the change in title means. It was reported that NHS England. This compares with 88.9% in recommended measures to help hospitals cope. the Department will take responsibility for an November 2017 and 86.2% in December 2016. As well as a temporary suspension of sanctions upcoming green paper on the future of elderly The 95% target has not been met since July 2015. for mixed-sex accommodation breaches, it said care. Two new ministers of state – Caroline

The month in quotes ‘More people are visiting GPs with flu ‘The NHS is in the grips of another winter ‘Last year we had a lot of symptoms and we are seeing more people crisis, as patients face long delays, operations operations cancelled at the admitted to hospital with flu. In terms are cancelled and staff work under extremely last minute. It is better, if you of hospital admission, this is the most difficult circumstances. What is happening in are unfortunately going to significant flu season since the winter of our A&Es is symptomatic of pressures across have to cancel or postpone 2010 to 2011 and the preceding pandemic the entire system.’ some operations, to do it in a year of 2009, although it is not an epidemic.’ Anthea Mowat, British Medical Association planned way. Although if you Public Health England medical director representative body chair, says solutions are are someone whose operation Paul Cosford on the increase in flu rates required for the NHS as a whole has been delayed I don’t belittle that for one moment ‘The decision to cancel planned operations will have a and I apologise to everyone significant impact on patients but the figures for bed occupancy that has happened to.’ show hospitals are effectively full. The service has reached the Health and social care secretary limit of what it can deliver within current funding levels.’ Jeremy Hunt apologises for the King’s Fund policy director Richard Murray calls for a long-term funding solution postponement of routine operations

06 February 2018 | healthcare finance SHUTTERSTOCK or above threshold. the ask for ministerial opinion –on pay proposals at musttrusts ministerial approval seek –FTs must proposal made before of start the year. the NHS continueof £142,500will applied to be to any above from 1January. The previousthreshold senior manager pay controls to £150,000and ofrise more than 1%for doctors and dentists. government provided funding has been for apay England reminded DDRB the that no additional discipline letter, In was needed. afurther NHS was now more flexible, Mr Hunt insistedpay government’sthe approach to public pay sector Association over consultants’ contracts. Though account of negotiations with British the Medical (DDRB)Pay asked Body it to Review take separate letter for Doctors’ the and Dentists’ improving staff retention and productivity.A Change staffthat meets its requirements of pledged any fund to fully for deal Agenda for and unions. trade The government has ongoing negotiations NHSEmployers between for next year, should body account the take of insisting that, inreaching its recommendations to inDecember, NHSPay the Body Review Commissioning Authority) Board in2012. He moved on to NHSEngland NHS the (then Authority director of finance performance.and officer Paul Baumann(below) was the Treasurythe –join Mr Hunt. previously to economic secretary Pensions; and Stephen Barclay, at Department the for Work and Dinenage, former junior minister The thresholdthe revised Treasury for Department The submitted evidence its NHSEngland chief financial London Strategic Health joined NHSin2007as the Honours list. Mr Baumann management New inthe Year’s to NHSfinancial services awarded aCBE for hit hard. Bytheend 2018, the flu rate in 2018, thefluratein of the first week of of thefirstweek Scotland was four Scotland wasfour times higher than times higherthan Winter pressures the same week the sameweek in 2017 construction. construction. Thewas firm involved in two sites under had contracted to Carillion provide services. and primary communityseveral care properties three and with afurther PFI schemes, while hard or soft facilities management trusts at 13 subcontracted had been Carillion to provide was arelatively customer small – of firm the working on for these afew months. The NHS said national organisations and local had been insolvency inJanuary. NHSImprovement following announcement the of Carillion’s uplift for those over £80,000. than £30,000;£1,600limit on maximum the pay 2% cap on pay baseline bill for earning more all forearnings –3%rise earning £30,000or all less; Budget, out sets pay according rises to current public pay sector policy, published with the andhealth, forward takes capital projects. The increases funding for care primary and mental 2.2% up inreal terms. The draft Budget also frontline boards health would £354m– be and funding extra for service health in the government prioritised investment and reform £351m.Mr Mackay be spending will said the resource to budget £13.1bn rise and will capital confirmed. TheHealth and Department Sport Derek 3% pay finance rise, secretary Mackay guaranteedup be to £30,000will aminimum more than £400min2018/19 and staffearning upper quartile. pay are quartile women, down to 55% inthe Contingency plans were put into action The rise health Scotland budgetby will in also foundalso that 72%of staffthe lower in organisations are women. The report two-thirds of staffthese in all hour more than women across Men on earn average 14.2%an despite that fact the just under the Departmentthe of Health and report 2016/17saidwas this Department’s its executive agencies. The Gender pay gap

Google Play. the AppStore or downloaded from news –canbe publications and – events,networks, of theHFMA’s work together allaspects which brings good. Theapp, uptake havebeen app inDecember, feedback and Following thelaunchofHFMA get theviewsoffinancefunction. members tocompleteashortsurvey and operationalpressures. Sheasks taken abackseatinthefaceoffinancial are progressing withtheagendaorifit’s like tounderstandifNHSorganisations Interest Group? Theassociationwould Environmental SustainabilitySpecial Sandra Easton,thechairofHFMA environmental sustainabilityagenda,asks Can theNHSafford toignore the service pressures. squaring uptosimilarfinancialand on howdifferent healthsystemsare conference, he offers hisinsights the UKforHFMAannual instalment, afteratripbackto Hospitals Board. Inthelatest finance officer atBermuda blogs sincebecomingchief continues hisseriesof Bill Shields(pictured) move topopulation-basedhealth. approaches topaymentandtheneed in theUK),there are similarities,suchas (67% inAustraliacompared with84% the levelofpublicfundingforhealthcare and Australia’s healthservice,including are cleardifferences betweentheNHS chair LeeOuthwaitesaysthatwhilethere HFMA NationalPaymentSystemGroup January, onarangeoftopics: on itswebsiteinDecemberand The HFMApublishedseveralblogs from thehfma healthcare finance |February 2018 news

07 conference 2017 HFMA 2017 Highlights from the conference in December

Landing this year’s position in the ‘best shape possible’ would be the greatest starting point for continuing the drive for sustainable services, Bob Alexander told the HFMA annual conference in December. Making his last appearance at an HFMA annual conference as NHS Improvement director of resources and deputy chief executive, Mr Alexander praised the finance function for its work to deliver financial plans in recent years – but more had to be done. There was still a ‘significant reliance on non-recurrent measures’ and too many financial improvements ‘skewed to the back end of the year’. NHS Improvement’s director of resources HFMA USA chair Carol Friesen Matthew Style, director of strategic finance at Bob Alexander NHS England, told the conference that co-design work was under way on how new shared control totals would work. He highlighted the need for updated payment systems to underpin new models of care pursued by accountable care systems, warning against systems simply adopting block contracts. While payment by results may not suit all service areas, the NHS should not lose all the benefits associated with the approach. The conference also focused on value-based healthcare, providing a platform for Jason Helgerson, Medicaid director for the New York Department of Health, to brief delegates on how value was driving outcome and cost improvements. One health system in the state fits air conditioning units in the homes of chronic Paul Buss, Aneurin Bevan UHB’s medical obstructive pulmonary disease patients to director improve wellbeing and reduce acute admissions. From the UK, Aneurin Bevan University Health NHS Improvement’s director of improvement Board’s medical director Paul Buss said there Adam Sewell-Jones needed to be a much wider adoption of the value- based approach. He called for every foundation trust or integrated health board to have a chief value officer – medical directors were the perfect candidates for these roles. In a new format, the conference featured a series of short, fast-paced presentations, alongside political insight from BBC political editor Laura Kuenssberg and a motivational session from Olympic triathletes Alistair and Jonathan Brownlee. The conference showcased the best in NHS finance and governance in its annual HFMA Awards. Eight awards went to individuals and teams in a range of categories, with Manchester finance director Adrian Roberts claiming the overall Finance Director of the Year Award. • More awards coverage in the HFMA Awards 2017 supplement and conference coverage at Jason Helgerson, New York State Medicaid www.hfma.org.uk/news (top stories) director

08 February 2018 | healthcare finance conference 2017 HFMA 2017

Outgoing HFMA president Mark Orchard

The conference’s new format included a series of short, fast-paced talks

BBC political editor Laura Kuenssberg

HFMA’s 2018 president Alex Gild

The first students to complete modules as part of the new HFMA masters- level qualifications received their certificates CONFERENCE PHOTOGRAPHY: THEODORE WOOD CONFERENCE PHOTOGRAPHY:

Olympic triathletes Alistair and Jonathan Brownlee healthcare finance | February 2018 09 CommentFebruary 2018

January saw the NHS the incredible commitment, be provided must be a shared continue to suffer an dedication and resilience concern for us all – one that Credit escalation of winter of our frontline clinical needs a sustainable solution. pressure against already colleagues. They have often As we move forward, we where stretched workforce and worked at their limit to keep must positively reinforce service capacity. This was services running and as safe communication and support it’s due undeniably a news story, but, as possible for patients. with our clinical colleagues unsurprisingly, the media’s People are saying they and back them where we Let’s recognise the efforts focus was almost entirely have not seen pressure like can with practical action to of NHS staff in meeting negative – focusing on policy this on the NHS before. That relieve the burden. and the overarching finances. may be true. But as before We can do this by ensuring winter pressures with More balanced coverage when times have been tough, we are aligned and working increased commitment might also have reflected on NHS staff have responded together effectively for with remarkable levels of patients in our systems. We discretionary effort. must act as one community This dedication to keeping of partners, thinking patients safe must not go innovatively and without HFMA without mention. And the barriers about how we can president burden many of our clinical Alex Gild colleagues feel in relation to the quality of care that can

The images of over-stretched A&E Not just departments during January have made for harrowing viewing. We have known for some time that access targets are slipping. about But patients held in queuing ambulances or waiting in busy corridors for a bed to become change available are very visible indicators of a service not able to deliver the standards of The NHS needs new care that it wants to. And – as HFMA president Alex Gild models of care but it also says above –this is despite the often heroic needs more immediate efforts by staff and the deferral of elective support procedures and treatments. That, perhaps, should be all anyone needs to see to understand that changes are essential to help the NHS deal with current levels of demand. Yes the service needs to be transformed – new models of care supporting people out in the community and much greater levels of prevention – but it also needs more money right now. In fact, Healthcare the failure to provide more funding in the Finance short term is actively stopping systems from editor focusing on the hugely important task of Steve Brown making services sustainable for the future.

The latest report from the National Audit SHUTTERSTOCK

10 February 2018 | healthcare finance comment

“Real issues need to be because even with rigorous Real issues need to be target – deliver our plans discussed about what should planning, normal operation discussed about what should overall as an NHS group be provided, who should pay of the NHS has been be provided, who should pay so we are in the strongest and how services are funded” seriously challenged already and how services are funded. position possible for this winter. Moving from one Strategic options are needed 2018/19. That would be a crisis to the next is not what and have been for some fantastic achievement and improve flow, maintain safety the public should expect time. HFMA is keen to play would provide us with a solid and deliver the best possible from our NHS. its part in any such review foundation to move forward. care for patients. Financial challenges in the and is planning a series of We need to maintain a Support can be given NHS typically lead to calls forward-looking analyses to shared constancy of purpose wherever we work. This for some form of long-term contribute to the debate. to do the best we can for could be within our own review and the current We will want your input patients as a community of finance teams, by increasing crisis is no different. While and views on this important partners. And we must do awareness of what our demands for such a review piece of work to help inform everything we can to support clinical teams are dealing to be cross-party may be policy and decision-makers. and sustain our frontline with and helping unblock unrealistic, there is a real Bringing our focus back clinical colleagues. Then issues that get in the way of need to cast our eyes forward to 2018, Bob Alexander, together we can help shape a delivering great patient care. to ensure our health and at his last HFMA annual brighter future for our NHS. You will find other ways too. care system remains able to conference as NHS Hopefully the pressure will deliver the highest quality Improvement deputy chief Contact the president on ease as the season changes, care in a sustainable way. executive, set a pragmatic [email protected]

Office – Sustainability and transformation cumulative deficit than the previous year. “The preoccupation with in the NHS – underlines the point. This And short-termism was evident in short-term funding is hardly a is hardly a body known for hyperbole or measures such as the transfer of £1.2bn of good basis for developing the emotive language. But its conclusion is capital funds to revenue budgets. This comes right incentives in the system to emphatic. Funding that should have been at a time when the service is in desperate drive the right behaviours” used to move towards sustainability has had need of capital funding to help make a to be used to meet existing pressures. reality of sustainability and transformation ‘Repeated short-term funding boosts could partnership system re-engineering plans. turn into the new normal, when the public (The NAO’s other report in January on the increases in demand – let alone the sustained purse may be better served by a long-term private finance initiative and its replacement, increases we have seen over this winter. funding settlement that provides a stable the PF2, did not set out to form a view of the The preoccupation with short-term platform for sustained improvements,’ the value-for-money of PFI, but it did point out funding is hardly a good basis for developing NAO’s head Amyas Morse said, as the report that there is still a lack of data on the benefits the right incentives in the system to drive was published (page 3). of private finance procurement. Private the right behaviours. The current payment Commissioners and trusts reported a funding seems unlikely to fill the NHS capital system is known to have flaws. At its heart, combined surplus of £111m in 2016/17, gap any time soon.) it doesn’t encourage system-wide responses which looks commendable given that average According to the NAO, national bodies to meeting patient and population needs. real-terms growth between 2014 and 2021 gave £4.1bn in financial support to But no payment system will help deliver the is around 1.9% – well below the long-run trusts outside of service contracts with right outcomes if the quantum of funding is average of 3.7%. commissioners, which it said ‘does not insufficient. But you don’t have to look far beneath support effective planning’. There is huge potential for transformation the surface for signs of extreme financial Delivering funds in this uncertain way – new models of care underpinned by strain. Trusts reported an improved, but still can push trusts into making ambitious capitation-based funding approaches – to sizeable, £791m deficit for 2016/17. While assumptions over capacity and workforce move the NHS towards a much greater level overall commissioner underspends offset pressures and to operate without the of sustainability. But if we ask too much of it, this, more local commissioners reported a necessary headroom to deal with one-off it will fail before it has had a chance.

healthcare finance | February 2018 11 wales

For several years, many NHS organisations have been keen on value-based healthcare – improving quality and efficiency hand in hand – but to date its implementation in the UK has been limited to individual providers or local health economies. But, if Wales follows the recommendations of the recent Parliamentary review of health and social care, it could soon be seen across a national system. The review team’s final report, A revolution from within: transforming health and care in Wales, sets out a vision for the future shape of services and recommends steps to achieve that vision. There should be a seamless system of health and social care, with services based around individuals, and provided as close to home as possible, it says. Set up by the Welsh government and chaired by Ruth Hussey, the former Wales chief medical officer, the review panel also A report on the included US value guru future of health Don Berwick and respected and social care healthcare researchers and in Wales calls for commentators. It says a new integrated services value-based approach to maintaining and improving underpinned by the quality of health and a value-based care is needed. approach. Seamus The need for change is being driven by a Ward reports number of well-known factors – workforce shortages, outcomes that are not improving as quickly as desired, and variation in the quality of services. In the meantime, spending is outpacing economic growth. Dr Hussey says shifting a greater proportion of Welsh government spending to health and care could impact adversely on other areas of Completing the picture public spending, such as education, housing and the arts, that can influence health and wellbeing. This made the need to maximise technology to improve access to and delivery of • Increase the wellbeing, capability and value achieved in care more pressing. care and seeks to continuously improve quality. engagement of health and social care staff – ‘The scale of the challenge ahead should not The second element looks at how change the extra component added to the triple aim. be underestimated,’ she says. ‘It is clear change can be achieved, mainly through stronger The report insists that every plan, strategy and is needed and even clearer that this should management using tools such as realigned practice should be driven by the quadruple happen quickly. We have detected an appetite financial incentives, benchmarking of aim. This could lead to radical changes. For for change and a desire to get on with it. A outcomes and costs and revised GP contracts. example, to achieve the first aim, the Welsh strong commitment to transform not just how government and health boards would have to much is done, but what and how it is delivered, Quadruple aim redistribute funding to support prevention is needed. We hope this report will be a catalyst The vision for the future is underpinned by Benchmarking would play a key role in for the action needed, and help to guide the delivering the quadruple aim – an expanded driving the better value and reduced waste future of health and social care in Wales.’ version of the triple aim developed in the element of the quadruple aim. Identifying When the report was published in January, United States. The quadruple aim includes four meaningful measures, especially in workforce health secretary Vaughan Gething said a new mutually supportive goals that seek to: productivity, would be critical. Wales could government long-term plan for health and • Improve population health and wellbeing even adapt work being carried out in England, social care, due in the spring, will take account through a focus on prevention such as the Carter review, Getting it right first of the report’s recommendations. • Improve the experience and quality of care time and the new Care Quality Commission Essentially, there are two parts to the • Increase the value achieved from the use of resources assessment. report – a strategic element sets out a vision finances available, through improvement, It adds that extending the work based on for change to an integrated, patient-centred innovation, use of best practice and the International Consortium for Health service that delivers care closer to home, uses elimination of waste Outcomes Measurements (ICHOM)

12 February 2018 | healthcare finance wales

A&E concern Although the review’s remit did not include commenting on the level and sources of funding for health and social care, it did acknowledge these are major issues. Indeed, shortly after its report was published, A&E consultants in Wales wrote to first minister Carwyn Jones warning that safety in their departments was compromised and this was due to under-funding of health and social care. Signed by almost 50 consultants from the six health boards in Wales, it followed a similar letter to UK prime minister Theresa May from emergency department doctors in England. The Welsh letter said that A&Es did not have enough staff or beds, while performance against the four-hour standard was similar to some of the worst performers in England. Welsh departments were overcrowded; patients could be waiting for days to be admitted to a ward; makeshift arrangements were needed to accommodate surplus patients; and ambulances often had to queue up outside. There was evidence that overcrowding adversely affects patients’ morbidity and mortality in line with the amount of time they spend in overcrowded emergency departments, they added. While the doctors acknowledged that NHS Wales and health boards had put enormous effort into planning for the winter, those plans had fallen short of what was needed to deliver adequate care for patients. The letter continued: ‘We appreciate the financial constraints under which Completing the picture the Welsh government must operate. However, we feel that the current situation programme – ICHOM has been working with New models of care could be accelerated demonstrates that both the Welsh NHS Aneurin Bevan University Health Board – through integrated capital funding and simpler and Welsh social care are severely and could provide the focus for the value element rules on access to funds, especially where chronically under-resourced. We have of the quadruple aim. ICHOM aims to drive the new models run across organisational neither sufficient staff, nor sufficient value by measuring patient outcomes and costs boundaries. beds (in either acute hospitals or the and believes that if care is restructured around Better use of metrics would be needed to community) to cope with the needs of our outcomes, with financial incentives for better support the domains of the quadruple aim, ageing population.’ outcomes, health systems can improve quality while performance and outcomes should be The consultants called for an increase and curb inefficiencies. regularly benchmarked across Wales, the UK in social care funding, a review of the The underlying financial system should be and internationally. Patients should be given number of acute care beds, a workforce strengthened and support the costing of care the ability to choose between NHS providers strategy to improve recruitment and pathways. These costs could be combined with and there should be investment to improve retention and the abolition of the four-hour clinical outcomes data to assess value. quality and system learning. Contracts for GPs A&E standard. The report says a wider approach to and community pharmacists should be revised implementing the quadruple aim and new to boost community service provision. models of care could also include changes in Wales is already moving in the direction report, more central action will be needed. financial rules. New, more creative incentives described in the report, with its policies of ‘Faster progress will require at least, as the could be introduced, covering revenue, capital integrating health and social care and prudent Organisation for Economic Co-operation and transformation funding, such as pay for healthcare. But broad strategies have not and Development (OECD) put it, a “stronger performance and pay for quality, including always translated into actionable priorities, it central guiding hand” to play a more

SHUTTERSTOCK productivity. says – to achieve the progress outlined in the prescriptive role,’ it says. Traditional targets and

healthcare finance | February 2018 13 wales EPR funding call The NHS in Wales and systems and the delivery of Auditor general Huw performance management were too narrow the Welsh government a national system, but the Vaughan-Thomas (below) and produced limited results – but progress face tough decisions on NHS was clarifying these said: ‘We know better could be made with stronger management, at funding and priorities if the areas, the auditors said. access to information leads local health board level particularly, and new electronic patient record The WAO estimated that to better outcomes for ways of measuring progress. The latter could (EPR) is to be implemented spending on information patients and fewer mistakes include new national support, incentives, in a reasonable timeframe, and communications by clinicians. Putting the benchmarking, accountability, regulation and according to the Wales technology was less than vision of an electronic transparency. Audit Office. 2% of NHS Wales funding patient record into practice The review panel believes the central In a report on informatics, – significantly less than means all parts of NHS Wales national executive must be the WAO said better recommended by Sir Derek NHS Wales, strengthened to achieve these changes in information systems led Wanless in his 2003 review including Welsh funding flows, regulation and performance to better outcomes for of health and social care in government, analysis. Currently, it does not have enough patients. Wales. need to take capacity. To comply with the OECD’s view that NHS Wales had a clear In 2016, the health some tough there should be a stronger guiding hand at vision for the installation of service estimated it decisions, particularly the centre, ‘national assets’ such as specialised a series of local EPRs that would need £484m on on funding, priorities and services, commissioning and the NHS Wales can communicate with each top of existing budgets enabling clinicians to have Informatics Service should not be held at other. However, despite this to implement the EPR the time and space to lead health board or trust level. goal of a national system vision over a five-year on this agenda. Unless And to give the service headroom to going back more than a period. The WAO said the it addresses the issues progress with transformation, as a minimum decade, no funding had Welsh government had identified in my report, the NHS Wales should set an efficiency target been agreed and there acknowledged that this NHS risks further frustration that allows it to break even and implement was no implementation estimate should be tested among frontline staff and new ways of working, the report says. These plan. There had been and the underpinning ending up with systems targets should be backed by clear metrics, disagreement about the assumptions made should already outdated by the benchmarked at health board level. ‘Improving flexibility to develop local be confirmed. time they are completed.’ quality and reducing waste is really important – the day job really matters to people, so doing that well and getting value from it will help sustainable health and care system in Wales. Pressure groups highlight the fact that the achieve efficiency savings,’ it says. ‘Our members agree that a different system of level of funding was not in the review’s remit, care is needed, one that’s seamless across health with one group describing it as the elephant in Government response and social care, physical and mental health, the room. “This is not just about Responding to the report, health secretary and secondary and primary community care. Huw David, Welsh Local Government Vaughan Gething said: ‘I’m pleased that the ‘The report recognises we have been moving Association health and social care commissioners rushing report suggests what we are already doing in towards a more integrated system for a number spokesperson, says: ‘One immediate challenge headlong into it. We have Wales with regard to the integration of health of years and there are many good examples of is the need for appropriate levels of funding involved the local FT” social care services is right. But we will need to new models of care that are already working and a long-term funding model to support the Chris Macklin, Sunderland CCG carefully consider the findings of this review to in Wales. The challenge is how we can be more health and social care system outlined in the see how this can be improved in the future. radical and ambitious, to accelerate the pace in report. The reality is that without adequate ‘The new long-term plan for health and moving to a genuinely seamless system.’ funding and new investment for health and social care will be published in the spring, Value-based care will be important, she social care in the future, the changes outlined taking account of recommendations in this adds. ‘We agree with the panel that it’s crucial in the report will not be enough to ensure report. I believe that what we have seen from for us to increase the value we achieve from the a sustainable health and care system. Bold the panel will set firm foundations for the funding of health and care. leadership is required at all levels.’ future of health and social care in Wales for ‘It is also helpful the panel recognises that Funding will remain an issue, but as the many years to come.’ the level and sources of funding for health and report says, whatever the overall funding level The response to the report from within social care remain key national issues. As we the current and future demand for health and health and social care has been largely positive. develop plans to transform the health and care social care means every pound must be spent British Medical Association Welsh Council system, we must ensure they are supported by effectively – and that is why it recommends a chair David Bailey says national management sustainable funding.’ nationwide value-based approach. must be strengthened. ‘BMA Cymru Wales welcomes the report, and many of the “It is clear change is recommendations, particularly the recognition needed and even clearer that the national executive function in NHS Wales needs to be strengthened; that that this should happen technology and infrastructure developments quickly. We have detected must be accelerated; and that medical an appetite for change and engagement must be a priority.’ a desire to get on with it” Vanessa Young, director of the Welsh NHS Confederation, says the report is a major Ruth Hussey, former Wales chief

contribution to the debate on how to create a FLICKR/DG EMPL medical officer

14 February 2018 | healthcare finance hfma president

“I want to build on our support to members to help them work more With the NHS in the throes of winter, the focus collaboratively in their work that is done for patients, both by frontline is, rightly, on patients and delivering care as safely teams, organisations clinical services and by our support services, as possible. But the stark images of patients in and partners to build including finance. The work under my theme aims makeshift wards or corridors, or hearing their elective the resilience they will to help us understand how we can best support and surgery has been postponed, has prompted further need” help improve clinical services.’ calls for a long-term review of the health and social With the 70th anniversary of the establishment of the care system. New HFMA president Alex Gild is one of those NHS this year, Mr Gild wants to create the headroom for the highlighting the need for a strategic, long-term review. association and others to look forward 30 years to what the NHS Contributing to the debate on the future of health and social care is might look like on its centenary. The HFMA NHS at 100 programme one of the workstreams that will flow from the theme for his year as will focus on a number of subjects – perhaps areas such as the future HFMA president, Our NHS, your HFMA, brighter together. role of the NHS finance professional or the impact of technology. ‘We There are two interlinked elements of his theme. In a nutshell, it is want to project the NHS forward, realistically informed by the current about working with colleagues across the four nations and partners in operational and financial pressures, to do some strategic thinking and the NHS and beyond, and supporting HFMA members in the day-to- development of options,’ Mr Gild says. day and strategic challenges they face. ‘Brighter together means focusing He adds the partnership work could include other professional across our teams, partner organisations and systems with a common bodies, such as CIPFA, NHS Improvement and NHS England, together aim to improve patient care and experience,’ he says. ‘If we are not all with HFMA partner associations in Australia and US. ‘It’s about pulling together to improve services in our local areas then we are not carving out the headspace to do it – balancing the day-to-day pressures doing the right thing for patients.’ so we can do some work on the future outlook for the NHS. But it is Mr Gild, chief financial officer at Berkshire Healthcare NHS challenging to do this when the service is under such pressure.’ Foundation Trust, explains that Our NHS, your HFMA is about This chimes with recent calls for a royal commission or cross-party supporting members. ‘It’s about our network and the benefits the HFMA work on the future of the NHS. ‘That would call for some cross-party can bring. The association is seeking to help set the agenda, reflecting alignment and support for an analysis and review of what services are new partnerships and priorities in the NHS but also reflecting on the provided and how they are funded. And if this work went ahead, the needs of its members. Negatives are always being highlighted by the HFMA with others is well placed to support it,’ Mr Gild says. media and some commentators but we must reflect on the fantastic ‘There has never been a better time to use the capacity and expertise

16 February 2018 | healthcare finance future is is future innovate and improve andhealth the care of population. the Joint visions authorities, care primary and other working partners health together to area and [Frimley Berkshire West], we have around table the local accountable care systems [ACSs] that are developing inmy trust’s local care andhealth system,’ social he says. ‘If you two the take exemplar relationships and understanding of one another’s contribution in the optimism? associated with and health care inrecent years. What are his grounds for Mr apositive Gild struck note, saying he was optimistic –aword rarely offerwith theothersscope to work,’says. he saying we are ready to work dothis –let’s doit together and make the such approaches as new HFMA and to bodies are funding. ‘The other The association could supportwider efforts toexamine difficult subjects, Supportive role partnership and planning remits of STPs and ACSs.’ have onof services populations impact the those within emerging the and because with closely services discussion, health so being aligned a role inlooking forward to alternatives to current the model.’ future holds and how NHSmight the change to it. meet The HFMA has colleagues overseas, facing similar challenges all –to at look what the our geographical network –across four all UKnations and our of HFMA’s network to get right the people around table, the including ‘I there’s think apositive shift been in operational and leadership hisDuring inaugural at speech HFMAconference the inDecember, He adds: ‘We have got care to bring and social public into health this and wantstheassociationtosupportits current pressures ontheNHS,HFMA 2018 president AlexGildisoptimistic transformation, saysSeamusWard While remaining realistic aboutthe bright The The designed todesigned engage workforce the and sustain improvement gains support offers available fromtheand learning others. QI programmes of delivery in the improvement. Irecommend at colleagues look QI the naturallyalso with teams our clinical to align corporate focuses services benefit. I’m encouragedreally aboutfromthis NHS Improvement. It improvement opportunities and reduce waste. at helping empower trusts frontline staff clinical continuousto identify as atop-downseen regulator initiative; it’s and aimed based evidence lean management and transformation is an example. This should notbe activity. ‘NHS Improvement’s backing of quality improvement through term operational improvement, alongside traditional cost savings opportunities providers could consider as aroute to sustaining long- and encouragingly we hear that happen.’ will Aligning approaches to system oversight and regulation critical is also capacity where it developing inthe and is needed expertise ACSs. approach to supporting and enabling our systems, such as offering action from NHSImprovement and NHSEngland their inaligning develop across NHSwe the are ahelpful seeing shift inintention and Budget are welcome. Mr Gild adds: ‘As our STP and ACS systems had hoped for,service additional the funds announced November inthe difficult so to achieve far but we know whatneed we to do.’ populations,our local using wherever evidence possible. Thisbeen has prioritise initiatives that have greatest the outcome health impact for and that’s for patients. good everyone, especially system working and inour ACSs we collaboration can see for change in other places, but relationships these are afundamental condition to short space of time. Relationships are strong –Iknow that it is different are forged, being and goals aligned it’s asignificant been shift in quite a channels.’ to ensuringthatalloureventsshould bedriventhrough digital paper andphotocopying,sobythe endof2018Iamcommitted want todevelopfurther.’ career inNHSfinanceor who are qualifiedbyexperienceand a wanted totakethesequalifications,thosewhowantforge accounting qualifications–perhapsforpeoplewhohaven’t take-up. Itoffers totraditionalCCABandother analternative and wehaveahigh-qualityproduct. Iwanttoencourage content. I’vebeenencouragedbytheearlyresults andfeedback from thefirstcohortistestamenttoqualityofqualification backing from NHSImprovement andNHSEnglandfeedback and development.The supporting membersintheirlearning the associationisdevelopingitsoffer tomembersaswell engage withandinformmembers.Ithashugepotential.’ now withtechnology.We will pushonwiththis,helpingusto HFMA contentatourfingertips–that’s thewayweliketowork need togetcontentthrough tomembers.Itgivesushigh-quality extremely positive.Andmyownviewisthatthisexactlyhowwe Alex Gildon… ‘The cultural impacts ‘The of innovation and engagement are a majoralso While system wider the he aligns, says there are significant Health funding continues protected to be and, though less than the challenge ‘The for systemsall with constrained resources is to ‘The association spends too much on Goingpaperless:‘Theassociationspendstoomuch on ThenewHFMAapp:‘Feedbackabouttheapphasbeen TheHFMAqualification:‘Thequalificationisabouthow healthcare finance hfma president |February 2018

THEODORE WOOD hfma president

Alex Gild: CV A business graduate, Alex and performance role, before finance, including: Berkshire West ACSs Gild joined the NHS in 1996 joining Berkshire Healthcare Trust lead for Member, Southern with a placement at the NHS Foundation Trust as deputy mental health, the Procurement Radcliffe Infirmary, Oxford. He finance director in 2006. In 2011 Global Digital Customer Board stayed in the Oxford acute he was appointed chief finance Exemplar HFMA South sector (Radcliffe Infirmary, officer at the trust, shortly after programme Central Branch chair, John Radcliffe and Nuffield the integration of primary care Sponsor, 2012 to 2017 Orthopaedic Centre), working trust community services. trust-wide lean HFMA Board his way up to deputy director of Berkshire Healthcare is now a transformation Trustee since 2013 finance level. combined £250m mental health quality Executive reviewer, He moved to Thames Valley and community provider. improvement Care Quality – later South Central – Strategic He has a number of programme Commission well-led Health Authority in a planning responsibilities outside trust Support to Frimley and programme. over the long term are in my view an antidote to some of the pressures Though the bigger picture for the NHS is important, the HFMA’s providers face’ engagement with and services offered to its members are also a priority He acknowledges the financial and operational position is extremely for Mr Gild. He pays tribute to his immediate predecessor, Mark tight across all sectors, but he believes the response must be all Orchard, and his work to engage members. During his year as president, encompassing from a partnership perspective. In recent weeks the strain Mr Orchard visited every branch, linking with and understanding the of winter pressures has been evident with A&E performance falling and needs of members. Membership increased by 7% over the year. ‘Mark elective care postponed (albeit with the support of NHS England) – it is connected with the membership and he can be very proud of what he evident part of the solution will come from collaboration between health has achieved,’ Mr Gild says. and care organisations, including ACSs. ‘I want to want to build on our support to members to help them work ‘We need to do something fundamentally different over the next few together and more collaboratively in their teams, in their organisations years,’ he says. ‘We will not get to the solutions to the current issues and their partners to build the resilience we will continue to need; to straight away, but in the new approaches being modelled we have recognise that everyone’s bright ideas are important, no matter what collaboration and developing relationships in the system. The service level they are in an organisation; and keeping us focused on why we are will benefit as they develop. There is extreme operational pressure at here – for patients.’ the moment and the NHS is being resilient, to a point. It is important to progress the system work.’ Collaborative work Berkshire Healthcare NHS Foundation Trust provides mental health He highlights the importance of the association’s joint project with and community physical healthcare and he is the first HFMA president NHS Improvement to develop improvement practitioners. ‘This is from a provider of these services, and from the HFMA South Central a great opportunity for finance to get alongside clinicians and learn Branch. How does he feel about the outlook for his sectors? ‘It’s good to improvement techniques, and then apply them.’ He also plans to support see the engagement, interest and understanding of mental healthcare finance staff with a series of free events organised at branch level. ‘These developing within systems as these services provide part of the answer will be about things like collaborative skills, building resilience and to keeping our populations well and out of hospital. It has been a bit of understanding how to manage through change.’ a battle for mental health services to be able to articulate the impact of And there will be a focus on supporting current finance directors and services among health and care partners, and the public in terms of what CFOs. Mr Gild says: ‘Many of us in finance leadership positions have services do for patients, but that is changing,’ he says. operated or developed into these roles from a different place and time The Five-year forward view for mental health was a big step forward. for the NHS. What’s expected and required from us as finance leaders ‘The economic evidence for investing in mental health services is now is to move away from thinking just about your own organisation provided clearly in that analysis. This comes back to my point about to system working for the benefit of patients. A change in mindset and evidence-based decision making, particularly in relation to system skillsets are needed at a time when our services face huge challenges. It investment decisions. With the immediate pressures in other sectors, requires a step change in finance leaders’ skills and contribution.’ particularly acute, it can be challenging for finance directors to make While softer skills, such as communication, are important, technical the longer-term economic case for investment in mental health. But knowledge is also needed. ‘We must know how to plan and prioritise increased capacity in mental health, community, primary and social care investment at a system level and manage risk and upside in a system, on is vital if out-of-hospital and prevention ambitions are to be achieved.’ the back of transformation, rather than just in our own organisations; He insists it is important to go back to the clinical, economic or to support and encourage the identification of opportunities; and enable existing service improvement evidence, for example from vanguards, to collective decision making in the system. All this is needed while also make the case for investment in the right services. maintaining leadership contribution, oversight and grip within our Mr Gild highlights an evidence-based example of the integrated care own organisations. This is a stretching context for finance leaders and decision-making hubs that are being developed in the Frimley ACS. so I have asked the HFMA to design a pilot personal development These hubs draw in and integrate the skills and expertise of community programme to support existing finance directors and chief finance partners in supporting patients away from hospital. The evidence for officers.’ the proposed investment in the East Berkshire hubs came from North As with so many of his peers, working hours are long and he likes to East Hampshire vanguard and Surrey Heath outcomes. ‘We need to spend his spare time with his wife and two children. He also enjoys keep looking for the evidence together. We must not be defensive about walking and travelling. The coming months will be tough, both solutions invented elsewhere – if a new service improves integration and personally as he juggles the demands of the presidency and his care experience for patients at scale, and we can deploy it at lower cost day-to-day work, and for the NHS, but he remains optimistic that the than the current model, we need to prioritise it,’ he says. future is brighter, together.

18 February 2018 | healthcare finance value-based healthcare Debating value An HFMA roundtable set out to understand the key components of delivering value-based healthcare and to identify obstacles to its wider establishment. Steve Brown listened in

You don’t hear many people arguing against roundtable agreed that the language used the concept of value-based healthcare. was crucial to their engagement in the value Decisions should take into account quality, agenda. ‘It is about variation in clinical measured in outcomes and patient experience, pathways not variation in costs,’ said Susan and cost. Value means questioning how Rollason, director of finance and strategy patients are treated in particular ways and at University Hospitals of Coventry and asking if a different approach could produce Warwickshire NHS Trust (UHCW). better outcomes and reduced costs. But despite ‘When you look at it like this, you this widespread backing for the principles, can engage clinicians. They are making a single decision, there only small numbers of UK healthcare bodies interested in what value you will be no engagement,’ said have actually put value-based healthcare into can get when you vary the HFMA Mr Moston. ‘It has to become routine practice. pathway – what the different the way we do business.’ He An HFMA roundtable in December, outcomes might be,’ she said. ROUND compared it with the way supported by medical technology company ‘If you can focus on variation the NHS engaged with risk Getinge, set out to explore progress in moving in clinical practice, that allows TABLE management a decade or so ago. towards value-based healthcare. you to start a discussion. The cost ‘We don’t hold the risk register Specifically, the invited finance directors data merely gives you a way in.’ separately, we embedded risk in how we and senior leaders from providers and The starting point with clinicians in operate. The same has to be true for value.’ commissioners wanted to identify the essential the UHCW prostate cancer service was to Catherine Phillips, finance director of North building blocks that need to be in place, and focus purely on outcome data, establishing Bristol NHS Trust, underlined clinicians’ focus the obstacles that need to be overcome, if a robust data and looking at the variation in on quality and safety. While variation in costs value-based approach is to be successful. outcomes to start understanding the value might help identify variation in length of stay, being delivered. Just looking at links between for example, clinicians were interested in the Clinical variation different pathways and outcomes really link between length of stay and outcomes, Costs form the denominator of the value engaged clinicians, who were keen to improve not the costs per se. But she warned that the equation and so cost data is key to value-based performance against national access standards. current financial environment in the NHS assessments. It can provide a way to highlight Ian Moston, Salford Royal NHS Foundation made clinical engagement more difficult. variation in clinical practice, which can lead to Trust’s director of finance, agreed with the Clinicians were more likely to see value as a pathway improvements that improve outcomes need for a common language. ‘Costing won’t cost-cutting exercise. and reduce costs. But clinicians, finance get anyone excited,’ he said. ‘We found better ‘There needs to be some trust,’ she said. ‘And directors and boards all need to engage with engagement where you can see variation in that’s a real leadership challenge. We need to this approach, recognising it as a useful way to clinical indicators. Understand that variation approach value while not focusing specifically drive improvement. and then look at the associated cost. You need on the financial imperative.’ While there are examples of clinicians to find a different lens than the cost.’ That might mean not looking at value as part engaging with cost and outcome data, more He encouraged organisations to see value of a traditional cost improvement programme clinical champions are needed. And the as a long-term piece of work. ‘If it is about with target savings identified up front. Instead,

20 February 2018 | healthcare finance value-based healthcare

Pictured this page, clockwise from far left: John Graham, Karen McDowell, Su Rollason, Tim Bryant and Ian Moston, with Duncan Orme, centre

Facing page, clockwise from far left: Catherine Phillips, Caz Sayer and Chris Calkin

Round the table

Chris Calkin, former HFMA chairman it means starting a value approach to enhance surgeons on the rota for complex lists,’ he said. and roundtable chair understanding about outcomes and costs – Doubling up on your most expensive resource John Graham, finance director, Royal even if this subsequently, as evidence suggests, may have increased overall direct costs, but it Liverpool and Broadgreen University leads to downstream cost savings through led to significantly better value. Hospitals NHS Trust appropriate standardisation. Karen McDowell, chief finance officer of Karen McDowell, chief finance officer, Duncan Orme, operational director of Surrey Heartlands Clinical Commissioning Surrey Heartlands Clinical finance at Nottingham University Hospitals Groups (Guildford and Waverley CCG, North Commissioning Groups NHS Trust, agreed that NHS bodies were West Surrey CCG and Surrey Downs CCG), Catherine Mitchell, head of costing in a tough position, made more difficult by said value had to look across sectoral divides and value, HFMA the increasing command and control nature – looking at pathways that move from acute Ian Moston, director of finance, of regulation. Spending less money is now a settings to primary and community care Salford Royal NHS Foundation Trust fundamental requirement, but he said that settings. So a value project in an acute hospital Duncan Orme, operational director of clinical solutions to find best value can require should also involve primary care clinicians and finance, Nottingham University more imagination. Improvement work at the vice versa. Hospitals NHS Trust trust in plastic surgery had taken the service But she agreed the key focus should be on Catherine Phillips, finance director, from a £3m loss on turnover of £12m to profit the benefits to patients – and ensuring that the North Bristol NHS Trust within three years. outcomes measured and monitored were the

‘But to do this we had to make investments ones that were important to patients. Susan Rollason, director of finance to get best value, including putting two Caz Sayer, GP and former chair of Camden and strategy, University Hospitals of Clinical Commissioning Group, which has Coventry and Warwickshire NHS Trust been pursuing value-based commissioning for “Costing won’t get anyone a number of years, also stressed the importance Caz Sayer, GP and former chair of excited. We found better of a system-wide approach. But she suggested Camden Clinical Commissioning engagement where you that it was difficult for primary care to release Group can see variation in clinicians to get involved in these projects. In attendance from sponsor Getinge: In general, she said, for value to be Tim Bryant, Emilie Erhardt and Louise clinical indicators” successful, people needed to be given the time Hamilton Ian Moston to get involved – expecting them to engage

healthcare finance | February 2018 21 value-based healthcare

around value improvement in addition to existing workload was unrealistic. Given clinicians’ time constraints, she said data also had to be in the right format. ‘It is vital that it tells stories that relate back to outcomes and patient experience,’ Ms Sayer said. She called on finance directors to be ‘as excited about changes in clinical models’ as they are about improving cost performance. ‘We need to think about what is important to patients as people – not think of them as conditions.’ While most of the discussion centred on engaging clinicians, John Graham said that finance directors also needed to engage. The finance director of Royal Liverpool and Broadgreen University Hospitals NHS Trust said it could not be taken for granted that all finance directors were signed up to value – they ranged from fully engaged to seeing the value approach as something that won’t help them meet control totals in the short term. He also underlined the importance of “We need to think about being able to stay at home.’ She said there were seeing value as a new way of working – and what is important to a lot of people tying up bed days or people not a short-term fix. The organisations that simply not coping out in the community. Case have been successful have been at it for a long patients as people – management for these individuals was likely time, he said, starting with establishing robust not think of them as to deliver a much better outcome for them and outcome and cost data and then using this conditions” potentially free-up resources. Having identified to analyse variation. He added that training Caz Sayer the desired outcome the challenge was then to would be important to the engagement get the system aligned so that all organisations challenge. ‘We need to find ways to help senior played their part. clinicians and nursing staff become more of a good outcome might be avoiding urinary Ms McDowell picked up on the need literate in data so that they can understand incontinence. for trust within partnerships from earlier what they are reading and feel able to challenge Dr Sayer agreed. ‘You have to start with discussions. She said that all sustainability it where appropriate,’ he said. the patients. Sit with them and ask what is and transformation partnerships need to important to them. You can’t do that with have the necessary trust in place between all Key components them all at the individual level, but you can organisations in order to make value-based The attendees were asked to identify the at the population level and get them grouped decisions across the whole system. key components that should be present for into segments. Once you have patient-defined Examples include the need to ensure that value-based healthcare. Dr Sayer said value outcomes, you will find there are very few there is agreement of funding flows between partnerships had to be in place across whole of them that don’t require you to respond providers rather than a focus on the loss of systems and there needed to be common as a system.’ income to individual providers within the values across the various organisations within In Camden, where the CCG is using system. Ultimately this is about delivering the the system. And ideally this should be across an outcome focused population health best pathway for the patients, she said, which broader public services not just healthcare. approach, the patient’s voice comes through a might mean transferring activity from acute to She highlighted the difficulties of ‘losing’ 1,000-strong citizen’s panel. ‘This has helped community settings. young mental health service users in the us to identify what is not working, define Mr Graham said there needed to be better transition to adult services – with these people outcomes and design pathways. They’ve also risk management across systems, rather than often reappearing in the system later with more been involved with tendering and monitoring a focus on risk transfer. This was completely severe problems that would potentially cost performance. tied up with trust and could be delivered more to address. By taking a systems approach ‘It is not just the right thing to do [involve through gain and loss sharing mechanisms. to this problem, there was a potential fourfold patients],’ she continued. ‘It is a sound business ‘The test is when things go wrong and whether return on investment if you also factored in decision.’ The panel tended to understand the people revert to silo behaviour,’ he said. ‘And savings from other parts of the public sector, pressures facing the system in a more detailed if things do go wrong, does the system stand such as the criminal justice system. way and were more likely to share some behind you.’ He reinforced earlier discussions, Chris Calkin, former HFMA chairman, responsibility for any difficult decisions that suggesting the regulatory system didn’t who was chairing the roundtable, suggested had to be made. always support this system approach to risk that it was also important to consider how Ms Phillips agreed. ‘Value has to be for the management. you judged value. Clinicians might view PSA patient and this needs to be seen by all the Mr Moston said he was a firm believer as the core outcome test for prostate cancer different parts of the system,’ she said. ‘Value that higher quality often meant lower cost – treatment but, for the patient, the real measure for a patient might mean staying in work or benefiting from getting things right first time,

22 February 2018 | healthcare finance value-based healthcare

Caz Sayer and Duncan Orme (left); ‘As leaders in the profession, how can we Getinge’s Emilie Erhardt (below) encourage a suitable level of investment to get capacity of the service up to be able to answer experience was that the data would only this in a better way,’ he asked. improve by using it, creating a positive loop Dr Sayer again stressed the importance of identifying and correcting data issues. He of looking at whole pathway costs and at added that the trust had made good progress outcomes across whole systems – data and with the use of service line data in the past year metrics that focused just on the organisational – thanks to the rolled-over tariff prices. level risked decisions that did not make sense ‘This has been the easiest year to have in system terms. Mr Graham agreed, but conversations with clinicians because the pointed out that organisations still needed tariff has been stable,’ he said. ‘With tariff to focus on their own data quality as fluctuations in the past, they don’t this would provide much of the understand how they can improve component data for total pathway their costs, but the income costs. This in turn would drops. So we’ve been able to set HFMA support better understanding up an efficiency programme of what was happening across with constant prices and focus the whole patient journey the clinical community above ROUND to deliver the overall system the EBITDA line, with the TABLE outcomes. corporate centre looking below it.’ Mr Graham added that while He added that historical costing data could improve, in many cases practices might mask some of the impact of it was already good enough to inform clinical variation. ‘One consultant might use a decision-making. particular piece of kit while another doesn’t for Ms Rollason described the adoption the same healthcare resource group. But often by UHCW of outcome sets developed by the way we allocate costs means that both get the International Consortium for Health a share of the use of the kit,’ he said, meaning Outcomes Measurement (ICHOM). These reducing re-work and eliminating unnecessary that variation in practice wouldn’t be visible clinically developed outcome sets pull or wasteful steps in the pathway. But he said through the cost data. together clinical outcomes and key survival there were occasions when people might accept Mr Orme said that costing data in general and disease management metrics with patient ‘lower quality for very low costs’. He said you in the NHS hadn’t been good enough and still reported outcome measures. She said the could see the approach in budget airlines, needed to improve. It needed to be accurate trust was attracted to them because they were where there was still an absolute expectation and at the patient-level – something that established and the consortium had plans of safety and timeliness, but the public NHS Improvement’s Costing Transformation to create pathway outcomes for 80% of the consciously traded add-on services for lower Programme (CTP) aimed to deliver. However, healthcare burden. prices. The important point was engaging with he raised questions about whether the NHS as Its initial focus has been with the prostate public and patients so they made informed a whole and provider finance directors locally outcome set. A lot of the information was choices. This could only work in the NHS were making costing improvement enough of already being collected as part of audit where ‘savings’ were poured back into other a priority. ‘I’m not sure our profession has got information – though there were problems priority services. ‘We don’t take this debate to the strength and depth to make it better within with data quality. And the trust had also the public,’ he said. the given timescales,’ he said. introduced patient questionnaires to meet The 50 or so acute submissions as part of the PROM requirements. A clinical outcomes Data considerations the 2018 voluntary submission within the CTP portal had ‘really engaged clinicians’ and the Data on costs and outcomes were seen as had ‘stretched professional colleagues and trust is now trying to factor in what happened fundamental foundations for value-based suppliers’, and the next cohort of providers to patients before they came to hospital. decision making, but it needs to be robust and were likely to be less advanced in general in Dr Sayer said that in general coding needed delivered in a timely fashion. Ms McDowell terms of costing. ‘And as we move into mental to be taken more seriously and not seen as said that trying to have conversations with health and community services, it is likely to something solely related to payment. ‘If you are clinicians with out-of-date information could be tougher again. coding wrongly, you are creating a clinical risk.’ damage the whole approach. Mr Orme said there was a capacity issue She said full analysis of the RightCare “The test is when things similar to that connected with improving data packs should be undertaken due to the costing data. ‘We are not training enough potential time lag from when the CCG packs go wrong and whether coders and not enough people want to work in are put together and current commissioning people revert to silo this area,’ he said. arrangements. However, she did state that behaviour. And if things they were a useful data source to use for both do go wrong, does the Putting it into practice commissioner and provider discussions. system stand behind Participants also discussed how their Others in the group agreed with this view, organisations were putting value-based emphasising the need for good quality data. you?” healthcare into practice. Ms Rollason said the Mr Moston pointed out that Salford’s John Graham work around prostate cancer at UHCW had

healthcare finance | February 2018 23

value-based healthcare

produced some good initial HFMA understanding of population patient experience and safety. The CCG now benefits in terms of improving for a number of years, wants to roll out use of the framework across data quality and submitting ROUND focusing initially on long-term all its partner organisations. more comprehensive data TABLE conditions, mental health, frail Nottingham University Hospitals NHS to national registries. It now elderly and children and primary Trust was one of the organisations that took plans to start looking at pathway care. More recently, it has entered part in the HFMA Costing for Value Institute variation, relative treatment options into a value-based contract for diabetes value challenge pilot. This had set out to test and outcomes. And its data portal is being based around an integrated practice unit how easy it was in practice to link costs and expanded to cover a broader range of cancer model. outcomes at patient level. data – including patient-level cost data, Dr Sayer told the roundtable that the The pilot looked at applying the process outcomes data and clinical audit data. approach did work. ‘We brought people in two settings: trauma and orthopaedics; Ms Rollason said that with infrastructure in together and invested in supporting reduction and diabetes. While there were challenges – place and quality of life information starting to in the variation in primary care – you can’t particularly in acquiring comparable outcome be captured, the ambition was for the reporting reduce hospital activity if you don’t invest data from different sites, the project concluded tool to support patient decision-making. ‘We in out-of-hospital services,’ she said. ‘In two it was possible to link costs and outcomes in a want to overlay information about the type years, the percentage of people with long-term useful way that can support pathway redesign. of cancer a patient has with the quality of life conditions who felt looked-after improved Mr Orme said that, for him personally, the impacts and the different treatment options against the national average, and we’ve reduced project had identified three clear accelerators available to patients,’ she said. non-elective bed usage. of value-based healthcare and improved Salford NHS Foundation Trust has been ‘The model can deliver and that breeds performance: patient-level information and widely recognised as a leader in terms of high confidence and trust – and it can be replicated cost data; good leadership; and clinical leaders. quality and safe services. However, Mr Moston even within the constraints of the current Overall, there was consensus that trust was clear that while the trust had quality and contractual and regulatory framework.’ between clinicians and managers and between safety embedded in its DNA, it faced the same However, she warned that while Camden organisations was key to making progress financial challenges as many other areas with had reduced non-elective bed use, it hadn’t on value-based healthcare. And leadership a significant year-on-year cost improvement been able to take costs out of the hospitals. was central to building this trust. There was programme. ‘So, given demographics, it might be more also agreement that organisations need to It now operated a rolling programme of about pegging costs,’ she said. understand what patients want from their improvement activities, which involved service treatment and this needs to be the focus of change and measuring productivity gains. And Investment framework the value delivery – rather than health bodies it recognised the need to consider pathways In Surrey Heartlands, the STP has put value deciding in isolation what counts as successful outside of the hospital in its improvement into practice by developing an investment treatment. work. ‘We’re not an accountable care system framework that uses the value-based decision But there was also agreement that while the as we don’t have primary care fully involved. process set out by Future-Focused Finance current financial challenges made progress But we are an integrated care organisation, as part of its Best possible value workstream. with value-based healthcare more difficult, it with adult social care staff now part of our The framework uses the value equation also made it more essential. As such, the team,’ he said. Stable leadership had helped to (defining value as quality divided by costs) current climate provided a major opportunity sustain progress, he added. ‘This is a long-term throughout to measure the impact of strategic to change the way decisions are taken to ensure approach. You can’t achieve it with a high and operational decisions in organisations and that services make the best possible use of turnover of leadership.’ local health economies on clinical outcomes, tax-funded health budgets. Camden CCG is one of the commissioners leading the way on the use of population health management tools to help it target its resources Clinical forum where they are most needed and can be A clinical forum on 22 March will bring clinicians together to explore the concept of value in most effective. Analysis has shown that small healthcare and their role in putting value-based principles into practice. sections of its population are consuming a The forum is being organised by the HFMA Healthcare Costing for Value Institute in significant proportion of resources. In 2014/15 association with the Faculty of Medical Leadership and Management with the aim of 1.2% of Camden’s population had four or more encouraging more clinicians to get more involved with the value agenda. non-elective admissions, representing 20% of Value-based healthcare is all about maximising the outcomes that matter most to the total hospital spend. patients at the lowest cost. Clinicians have a huge role to play in identifying the right The population health management outcomes. But they are also key to understanding pathway variation and redesigning tool identifies segments of population by pathways with cost data providing a way to identify and understand that variation. developing groups based on similar health ‘Value-based healthcare needs to become the focus for clinicians and finance alike as needs. The aim is to understand what they look to deliver high-quality sustainable healthcare services,’ said Catherine Mitchell, combination of disease and demographic head of the institute. ‘The clinical forum offers a great opportunity for clinical and finance factors drives patients to fit into one of the colleagues to start having that conversation.’ groups. Services can then be developed to Clinicians are encouraged to bring a finance colleague with them, and Healthcare better meet the needs of these population Costing for Value Institute member organisations are eligible for two free places at the segments. forum (one clinical place and one finance place). Clinical staff from non-institute member It has been pursuing a transformation organisations are also welcome to book onto the event. Details at www.hfma.org.uk programme informed by this better

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professional lives

hfma professionalEvents, people and support for finance practitioners lives

Page 29 Page 30 Page 31 Page 32 2018 dates for Mark Knight on the Branch focus on the Patrick McGahon your HFMA HFMA’s mission to West Midlands, plus switches back to diary support members recent job moves the provider sector Updated accounting guidance amounts to minimal changes for 2017/18

The NHS finance community to NHS foundation Technical received an early boost to its 2018 trusts as the guidance update reading list in the form of updates is included in chapter to the Group accounting manual two of the GAM, (GAM) from the Department of Health, the which is not applicable Annual reporting manual (ARM) for foundation to them. However, trusts from NHS Improvement, and the NHS Improvement will Greenbury guidance from the NHS Business issue an amendment Services Authority, writes Debbie Paterson. to the ARM soon and For those who like to skip to the last page to it is unlikely to be very find how it all turns out, the real news is that different to FAQ 8. 2017/18 is a year of little change. As expected, the The Department of Health (or Health and Treasury’s reporting Social Care to give it its new expanded title) did requirements have been amended to reflect issue additional guidance alongside the GAM, the change in the off-payroll (IR 35) legislation including eight FAQs, six of which apply to all from April 2017. In addition, the threshold for new guidance NHS bodies. However, there were no surprises. engagements that must be reported has been for newly The FAQs that will have the biggest impact increased from £220 a day to £245 a day. formed NHS deal with statutory changes that occurred in Of the three tables that still need to be foundation April 2017. The first (FAQ 3) covers accounting completed for off-payroll engagements, tables 1 trusts and NHS for the apprenticeship levy. The Treasury has and 3 will be familiar. trusts, while the guidance on determined that the levy will be treated as a Table 2 requires that the number of new how to deal with a change in statutory status tax and, therefore, payment of the levy must be off-payroll engagements entered into in 2017/18, is retained. NHS trusts have new guidance on recognised as an additional social security cost as or those that reached six months in duration reporting against financial duties and targets. it arises. It cannot be treated as a prepayment. during 2017/18, are disclosed (split between Supplementary guidance on how the statutory Accounting for the benefits arising from whether they fall under the remit of IR35 or not). break-even duty applies to NHS trusts will be the use of the digital account will depend on These must be shown along with the number issued later. whether the NHS body is a training provider or engaged directly and on the payroll, the number Finally, FAQ 7 updates the GAM to reflect not. For non-training providers, the amount of that have been reassessed for consistency/ changes made to the Treasury’s Financial employees’ training funded by the levy will be assurance during the year and the number that reporting manual (FReM). Some of these recognised as a non-cash expense in the period have changed status as a result of that review. will require changes to the annual report of all that the training occurs. This is matched by non- FAQs 1 and 2 provide annual updates non-NHS foundation trust bodies. cash grant income. on discount rates for provisions and post- For NHS foundation trusts, the annual For those NHS bodies providing the training employment benefits, as well as the probability reporting guidance in the ARM has also been themselves, receipt of cash from the digital of non-recovery of injury cost recovery revenue. amended to reflect the changes made to the account will be treated as grant income. FAQ 6 simply tidies up the manual by removing Treasury’s FReM. In addition, the requirement Expenditure incurred in delivering the training a reference to guidance that is no longer in Managing public money to report fees and is accounted for in the usual way. available. charges has been reflected in the ARM. FAQ 8 deals with reporting off-payroll Two other FAQs (4 and 5) will have an effect engagements. Officially, this FAQ does not apply on limited numbers of organisations. There is Debbie Paterson is an HFMA technical editor

healthcare finance | February 2018 27 Technical review The past two months’ key technical developments For the latest technical The HFMA and consultancy PwC are to explore how The 2018/19 Treasury guidance Technical funding structures can be used to incentivise better Financial reporting manual www. roundup outcomes. Announcing the joint work in a blog, David (FReM) was published at the hfma.org. Morris, a PwC partner, said the research would examine how end of December and the uk/news/ money should flow through health and care systems and how Department of Health and newsalerts to incentivise behaviours to deliver the outcomes users need. The study is Social Care followed this up with on PC or due to be published in the spring. 2018/19’s draft Group accounting phone manual a month later. The key The HFMA has backed proposals for reporting the new use of proposed changes are: resources assessment for providers. In a consultation document last • Adoption of IFRS 9 Financial November, the Care Quality Commission and NHS Improvement instruments proposed publishing the new use of resources rating alongside an overall • Adoption of IFRS 15 Revenue from contracts with customers quality rating, with the quality rating based on the CQC’s existing five • Adoption of the amendment to IAS 7 Statement of cash flows key quality areas (safe, effective, caring, responsive and well-led).The • Amendment to the guidance on discount rates as a result of the consultation also proposed combining the resources assessment with this Treasury’s move to nominal rates quality rating to produce an overall rating. Three examples of how this • An additional requirement to disclose medical locum staff costing more might look were put forward. The HFMA said the dual approach made than £142,500 per annum the ‘finding and impact on overall rating clear’. However, it raised concerns • Amendment to the disclosure of ‘NHS’ and ‘non-NHS’ receivables and that the use of resources rating and existing quality rating for well-led may payables overlap and could lead to double counting of an issue. The HFMA Provider • Clarification of PDC dividend calculation Finance Faculty is running a forum on use of resources in March – contact In addition, there is a consultation question around the use of the external [email protected]. financing limit (EFL) as a performance measure. Consultation ends on 23 How the new ratings might look February – and the HFMA will be submitting a response – please email comments to [email protected]. Combined rating Requires improvement

Safe Requires improvement l A recently published briefing from the HFMA describes a new Effective Good l national centralised system for purchasing expensive medical devices Quality: l and implants used in specialised services. Roll-out of the system, a Requires Caring Good response to recommendations in the Carter review of improvement Responsive Requires improvement l productivity, began in 2016/17. As well as describing Well led Good l how the system works, the briefing also considers the accounting implications of one NHS body procuring stock that is held and used by another body. And it Resources: Use of resources Good l Good also identifies lessons that could be applied to other centralised procurement arrangements.

NICE guideline targets macular degeneration NICE has recommended anti- visual impairment in older adults in the of people with a primary diagnosis of macular NICE VEGF treatment be considered developed world. The two main late AMD degeneration involves intravitreal injection. update for late age-related macular phenotypes – geographic atrophy and About 80% of people with late AMD (wet degeneration (AMD) (wet active) exudative AMD – are responsible for two- active) have visual acuity between 6/12 in eyes with visual acuity of 6/96 or worse, thirds of registrations of visual impairment or and 6/96. In current practice anti-VEGF only if a benefit in the person’s overall visual blindness in the UK. It is estimated a quarter treatments (anti–vascular endothelial growth function is expected, writes Nicola Bodey. of a million older adults in the UK alone suffer factor therapy given as intravitreal injections) The guideline (NG82) also raises from blindness due to this condition. tends to be in line with NICE guidance on awareness that anti-VEGF treatment for There has been a significant increase in ranibizumab and pegaptanib (TA155) and patients with late AMD (wet active) and visual hospital activity in England for treatment and aflibercept (TA294). acuity better than 6/12 is clinically effective monitoring people with a primary diagnosis of More prescribing is anticipated as a result and may be cost-effective depending on the AMD from less than 10,000 visits in 2005/06 of the guideline recommending treatment for regimen used. to over 75,000 in 2013/14. The most people with late AMD (wet active), and visual AMD is the commonest cause of severe common primary procedure in hospital visits acuity not within the range 6/12 to 6/96.

28 February 2018 | healthcare finance professional lives

22 I Healthcare Costing for Events in focus Diary Value: clinical forum, London February 22 B London: quiz Integration summit 7 N CEO forum, London April 8 February, London 8 N Integration summit, London 18 I Healthcare Costing for 13 I Healthcare Costing for Integration between health and social care Value: costing conference, Value: introduction to NHS is moving from small-scale joint working to London costing – regional networking something much bigger. New models of 24 B and training event (South) London: VAT focus group care have emerged, including accountable level 3 strategic workshop, 14 F Chair, Non-executive care and primary and acute care systems. Rochester Row Director and Lay Member: Potential benefits include seamless care for forum, London patients delivered by multidisciplinary teams, May 15 B Northern: pre-accounts but finance staff must also create shared 10 F planning, Durham Commissioning Finance: financial mechanisms and governance structures. At this, the prescribing forum 15 F Mental Health Finance: third HFMA/CIPFA integration summit, NHS provider finance 10 B workforce forum, London South West/South Central: directors, clinical commissioning group chief finance officers, developing talent conference, 27 B Eastern: accounting local authority treasurers, sustainability and transformation Bristol standards update, Fulbourn partnership finance leads and directors of adult social care will 16 F Provider Finance: directors’ 28 I Healthcare Costing for have a chance to discuss the integration challenges they face. forum, London Value: value masterclass Speakers include Jon Rouse (pictured), chief officer at Greater 16 F Mental Health Finance: Manchester Health and Social Care Partnership, who will March directors’ forum describe how leading the integration agenda in Manchester 17 F Chair, Non-executive feels in practice, what challenges the partnership has faced, 13 F Chair, Non-executive Director and Lay Member: and how the conditions of success can be replicated and Director and Lay Member: forum shared across the country. operating game for new NEDs, 24 B • For further details, visit hfma.to/summit18 chairs and lay members London: VAT focus group level 1 refresher workshop, • Email [email protected] for details 14 I Healthcare Costing for Rochester Row Value: introduction to NHS costing, regional networking June and training event (North) Convergence conference 15 B 14 B Kent Surrey and Sussex: Eastern: annual conference, 5-6 July, Nottingham accounting standards update, Newmarket 21 B The Convergence conference Gatwick London: annual conference, brings providers and commissioners 22 F Provider Finance: preparing Rochester Row 28/29 B together to facilitate networking and for the use of resources North West: annual conference, Blackpool shared learning. Since the creation assessment forum, London of sustainability and transformation partnerships and moves towards For more information on any B Branch N National accountable care, the roles of of these events please email key F Faculty I Institute providers and commissioners are becoming increasingly [email protected] blurred. Systematic issues around governance, payment and contracting are being discussed at length, with no one-size- fits-all solution. Cultural issues around different organisations working together are introducing a wave of fast-paced and widespread change to everyday working lives, which newly However, earlier prescribing (for people with appointed system leaders need to manage effectively. visual acuity better than 6/12) should require Delegates will hear from STP leads and directors of finance less treatment overall. about how organisations are aligning and moving towards A small resource impact is anticipated a patient-centred model. If you would like to share early occurring gradually over the next five years experiences of your local converging systems, please get in – a resource impact report and template are touch. Former NHS Improvement chief executive Jim Mackey available on the NICE website. List prices of (pictured) will deliver the opening keynote speech on progress anti-VEGF treatments included in the template at the Northumberland Accountable Care Organisation, with have discounts in commercial confidence. personal reflections on his time at NHS Improvement and Age-related macular degeneration services what the future may hold for commissioners and providers. are commissioned by clinical commissioning • For further details, visit hfma.to/converge2 groups (CCGs). Providers are NHS hospital • Email [email protected] to share your trusts and community optometrists. experiences at the Convergence conference Nicola Bodey is senior business analyst, NICE

healthcare finance | February 2018 29 Pressure and funding

Association view from Mark Knight, HFMA chief executive To contact the chief executive, email [email protected] SHUTTERSTOCK

Interesting to see Boris Johnson support members? Some of you are natural most of IT in the future and the changing My (pictured) throwing his hat into networkers, moving around HFMA and NHS role of finance function as accountable care HFMA the ‘more funding’ ring, reportedly circles to gather contacts and find support. organisations and system working become the calling for an extra £100m a week But a significant number won’t be, so we want established business model. for the NHS. He was quickly slapped down, with to ensure we can provide a system that allows It’s been a busy few weeks for the HFMA. Our the chancellor pointing out that Mr Johnson members to just ‘plug in’. We’re discussing this new group of students is starting the HFMA was the foreign secretary. That may be the case at the moment and any ideas are more than qualification and the association is hosting the but Mr Johnson, like Mr Hammond, is a local welcome – email me at [email protected]. National Association of Primary Care’s new constituency MP and backbench Tory MPs are The second project we want to develop is to practice manager programme on its platform. feeling the pressure from constituents. Although look at the ‘NHS at 100’. We all have a vested We have run events with different faculties Brexit dominates our political horizons, it is interest in this, but why do we spend our time and our usual pre-accounts planning courses hit the NHS that dominates the here and now and lurching from one crisis to another? Commons Manchester and London at the start of February. remains at the very top of the political agenda. Health Committee chair Sarah Wollaston has For those planning ahead, look out for the first I remain optimistic that these calls will be called for a long-term coordinated plan for release of our annual conference tickets. We heeded after an unprecedented surge in activity. health and social care. And discussion is growing like to get them out early to enable you to secure The question of how we pay for any increase around the need for a cross-party consensus. your place well in advance. in funding as a country is just something that For our own part, we are committed to Attending events – branch and national – and needs to be tackled. The HFMA will continue to contribute to the debate and will take a look contributing to the association’s committees and monitor the issue and comment appropriately. at key issues. These include how we make the work programmes remains vital to retaining a However, two central concerns remain for us – vibrant and informed finance function. While how do we support our members in the current time out of the office is difficult in the current situation and what’s the long-term picture? climate, staying up to date, sharing good practice What, for example, will be the state of the service HFMA chief and maintaining those networks is perhaps more when the NHS turns 100 in 2048? executive important than ever right now. The HFMA’s 2018 president, Alex Gild, We continue to value your support – let us asked the first question in his opening address Mark Knight know if we could do things differently or there to the annual conference – what can we do to are topics we should be covering.

Member news

Several key decisions were Technical Issues Group ‘understand who you really are taken at December’s AGM: • Kevin Stringer, Governance (and therefore who you are not)’. • Alex Gild, director of finance and Audit Committee • For executive coaching, email at Berkshire Healthcare NHS FT, • Suzanne Tracey, Provider [email protected] or was elected 2017/18 president Finance Faculty call 0117 9388320. • Bill Gregory and Caroline • Jonathan Stephens, Payment Clarke became vice presidents Systems and Specialised Beth Pidduck Member • Elizabeth O’Mahony, Carol Services Group (pictured) won the Potter, Sanjay Agrawal and Lee • Mike McEnaney, Healthcare Sue Rosson award benefits Outhwaite joined the board of Costing for Value Institute at the North West trustees for a three-year term Costing Group branch annual general meeting, Full members can • All annual subscriptions for improving processes at now access the remain unchanged. Discounts Grasp that nettle: five steps Lancaster Teaching Hospitals MyHFMA app, which for lower bands start at £3 per to sustainable confidence – NHS FT. The award recognises offers every member a month with a direct debit.. simple practical steps to lasting good practice in trainees or personalised experience confidence your own way is the recently qualified staff. Shaun that puts a wide range The chairs of several faculties first book by HFMA executive Weaver (Wigan Borough CCG) of essential content and committees were named: coach Chris Brown. The and Adam Wardle (Countess at their fingertips. • David Chandler, former NHS finance director’s of Chester Hospital FT) were Download it now Commissioning Faculty and book promises to help you runners-up. from the App Store or Google Play

30 February 2018 | healthcare finance professional lives

Branch focus Appointments My Weat Midlands HFMA Branch Sharon Murphy (pictured) has been appointed interim director of finance at Leicestershire Partnership NHS Trust. She has been deputy director of finance at the In November, the research and organisation since 2014 and took up the development committee of the West new role at the end of December, following Midlands Branch published a Best the departure of Pete Cross. After over 15 years in senior practice tariffs (BPTs) toolkit and financial positions in the NHS, Mr Cross became chief dashboard – an overview of BPTs in and development committee. finance officer at De Montfort University in January. place for 2017/19. Chaired by David Melbourne, The author, Dudley Group of chief finance officer at Birmingham Alistair Mulvey is now chief finance officer at the six Hospitals NHS Trust head of service Women’s and Children’s NHS FT, Staffordshire clinical commissioning groups. He was chief improvement Amanda Gaston, also it is working on projects on the finance officer at North Staffordshire and Stoke-on-Trent conducted a survey that found more economic impact of investing in CCGs. In East Staffordshire CCG he will succeedWendy than 60% of the respondents felt the NHS, the regional financial Kerr. In the other three – Cannock Chase, South East that BPTs’ objective to incentivise management graduate scheme Staffordshire and Seisdon Peninsula and Stafford and high-quality and cost-effective care and delayed transfers of care. In the Surrounds clinical commissioning groups, Mr Mulvey takes had been met. past year, the committee published over from acting chief finance officerVicky Hilpert, who took BPTs have a significant role as a popular briefing on stress the position afterPaul Simpson was appointed acting chief part of the current payment and management in the finance function. accountable officer at the three organisations. Ms Hilpert incentives framework. However, Kim It is also in the process of is now director of finance at the Institute of Occupational Li (pictured), new vice chair of the launching a students committee, Safety and Health, while Mr Simpson is corporate director of branch and director of finance at with its first meeting set for Monday resources at Milton Keynes Council. South Warwickshire NHS FT, is clear 19 February in Birmingham. ‘The this is likely to change in the move initial aim is to support each other NHS Ayrshire and Arran has appointed to accountable care systems. in our development, and this may Rob Whiteford (pictured) assistant director ‘Tariff systems unfortunately be, for example, by organising of finance for operational services. Mr put us in a situation where we events to suit the needs of students Whiteford is also the new chief finance officer have potential conflicts with our or discussing current issues and for the South Ayrshire Health and Social Care commissioners, and they can’t how they affect our organisations,’ Partnership. He was previously chief finance afford to pay for the activities we says branch student representative officer at Enfield Clinical Commissioning Group. He takes do,’ says Mrs Li. ‘What we’ll need to Becky Coldrick. over from Sharon Lindsay, who has retired. do in the move towards accountable The West Midlands is the care organisations, is to be much biggest HFMA branch in terms Clare Stafford is now director of finance at Brighton and more collaborative and to use of membership. It also hosts the Sussex University Hospitals NHS Trust. She was director of more outcome-based measures largest branch conference, with finance at Queen Victoria Hospitals NHS Foundation Trust, and different ways of incentivising 320 delegates attending last year’s where Jason McIntyre has stepped up as acting director. organisations to do the right thing.’ event. The West Midlands Branch is the • Find out more about the branch at Tom Jackson, who was previously chief finance officer at only branch with an active research hfma.to/westmids Liverpool Clinical Commissioning Group, has taken up the role of director of finance at Dudley Group of Hospitals NHS Foundation Trust. He takes over from Chris Walker who was Eastern [email protected] acting director of finance following Paul Taylor’s departure. East Midlands [email protected] branch Mr Walker will be returning to his position of deputy director contacts Kent, Surrey and Sussex [email protected] of finance at the organisation. London [email protected] Northern Ireland [email protected] Helen Shields (pictured) is retiring as chief executive Northern [email protected] officer at the Isle of Wight Clinical North West [email protected] Commissioning Group. Mrs Shields, Scotland [email protected] whose background is finance, has South West [email protected] more than 30 years of experience South Central [email protected] working in the NHS on the Isle of Wales [email protected] Wight. She was previously director West Midlands [email protected] of finance for the Isle of Wight Yorkshire and Humber [email protected] Health Authority and then the primary care trust.

healthcare finance | February 2018 31 professional lives

Get in touch Have you moved job or been promoted? Do you have other news “I have missed working directly with to share with fellow service users, patients and clinicians members? Send the and this new role gives me that details to seamus.ward@ opportunity” hfma.org.uk Patrick McGahon, Tees, Esk and Wear Valleys NHS FT McGahon steps back into provider sector

Patrick McGahon admits that the century and has also served as a mental health users. I want to work closely across the clinical On the lure of once again working with services commissioner. commissioning groups and sustainability and move frontline services attracted him away ‘I always thought mental health didn’t get a transformation partnerships to look at this.’ from the NHS Business Services fair crack of the whip in terms of funding and He adds: ‘The trust has always delivered its Authority (BSA) after more than four years. priorities, but the Five-year forward view for financial targets since it was formed in 2008 Mr McGahon has been appointed substantive mental health and parity of esteem funding and, looking at 2017/18, it is broadly on track director of finance and information at Tees, means that mental health is coming back to the to deliver its control total. Looking forward to Esk and Wear Valleys NHS Foundation Trust, fore,’ says Mr McGahon. ‘It receives a relatively 2018/19, there is further work to be done.’ succeeding Colin Martin, who became the small percentage of total NHS funding, but As with all NHS organisations, the trust faces mental health and learning disability trust’s it has a massive impact on a large part of the a number of challenges, including recruitment. chief executive in 2016. Drew Kendall has population and on what can be done to ease the He says: ‘How do you encourage clinicians to been the trust’s interim director of finance and pressure on the system as a whole. come and work in different parts of the trust information since then. ‘The trust itself has an exceptionally good geography? How do you bring developing Currently the BSA’s director of finance and reputation nationally, with a good Care Quality technology such as robotics, AI and apps into commercial services, Mr McGahon has more Commission rating. Its leadership is rated the mainstream of mental health and learning than 20 years’ board-level experience, mainly in outstanding and it’s a high performing trust. My disability?’ NHS provider organisations, as finance director focus is on supporting the trust and our service Improving the trust’s electronic patient record and in strategic roles, as well as periods as acting users to continue to improve services.’ will be high on Mr McGahon’s list of priorities, chief executive. He is expected to take up the He is a member of the HFMA’s Policy and as will digitisation – this will save clinicians’ time new post in April. Research Committee, Future-Focused Finance’s by ensuring patient data only needs to be input ‘I always wanted to move back to the front Great place to work group, and is an HFMA once and supporting clinical decision-making. line. I’ve worked for this national body for four mentor and chair of Carlisle College. He remains He is sorry to leave the BSA. ‘There have and a half years and wanted to move to a trust in committed to the HFMA and to the work of FFF. been lots of positives – for example, we saved particular – that was one of the key drivers for With the NHS in England moving towards £800m for the wider NHS and developed an HR applying for this job.’ outcomes-based contracting for some services, shared service for the arm’s length bodies sector. An additional factor was the chance to work Mr McGahon is keen to examine the scope for However, I have missed working directly with once again in a mental health provider – he expansion in mental health contracting. ‘The service users, patients and clinicians and this worked in the sector around the turn of the critical thing is the outcomes for the service new role gives me that opportunity.’ Efficiency focus The Future-Focused Finance and East Lancashire Financial Services, are Mr McLoughlin said: ‘The NHS Future Efficient processes and systems also represented on the group. processes as many as 20 million focused finance action area has been relaunched The group met for the second time in late invoices a year and e-invoicing recently under the guidance of January and has set its sights on improving could generate savings of more Adrian Snarr (pictured), director of financial systems and processes in areas such as than 50% in processing costs per control at NHS England. non-contract activity and e-invoicing, while transaction. If the service saved £1 per Assisted by John McLoughlin, winner of working to ensure that sustainability and invoice, commissioners could save as much the FFF prize for 2017, Mr Snarr has pulled transformation partnerships and accountable as £5m in hard costs through e-invoicing. together a delivery group from across the care systems/organisations make the Across the NHS as a whole, efficiencies NHS, including representatives from NHS most of the systems currently available to gained could be more than £20m.’ England, NHS Improvement, the Department them. The action area’s previous focus on The delivery group is looking for more of Health and Social Care and provider benchmarking will also continue. volunteers to help take its plans forward. To organisations. Shared service providers, Speaking after receiving the FFF Award get involved in any aspect of its work, please including NHS Shared Business Services at the HFMA conference in December, email [email protected].

32 February 2018 | healthcare finance