A bit about Michael Treharne:
Michael Treharne is a seasoned finance professional with a substantial 34 years’ worth of experience within the NHS. He is currently the Chief Finance Officer at NHS Wirral CCG.
One of the major challenges is being able to deliver on the required QIPP savings, particularly if you are in recovery, and in a challenged health economy. 70% of costs for CCGs are largely spent on providers but it is difficult to deliver savings when Trusts may be trying to generate additional income, as part their CIP or recovery plan. In addition, there is the danger that CCGs base their savings on tariff, through activity diversion, but in reality this is likely to be very different from the costs providers can actually lose or reduce? Therefore, unless CCGs and providers have signed up to a CEP lite process and principles, and mean it, real savings for the system remains challenging.
Coding changes usually cost the commissioner, but there is a query on the amount of value this adds to the system. This means we lose sight of what the real challenges are, unless the coding adds to our knowledge and intelligence, and influences future service and care pathway development.
Providers, particularly hospitals, have extremely challenging pressures to face and manage, but we need to ensure that our time is spent on doing what is right for the patient and system, and not just individual organisations. Some places appear to have done this quite successfully, but it requires trust between people, much more of a selfless mindset from leaders, plus cessation of the contradictory messages from regulators!
There has to be a debate about what kind of health and care service we can afford – both locally and nationally – including the dreaded “rationing” question – and not at the margins!
The regulators too need to be on the same page in terms of consistent and transparent messaging. As accountants we know that savings come from decreasing costs but organisations within the system can often work against each other to achieve this aim.
We have had circa 35 years of cost improvement targets and the current levels are simply unrealistic and unachievable, and hence the large deficits, many of which are structural. Going forward some form of CIP/QIPP holiday needs to be considered to focus energies more appropriately. However, given the tensions between the treasury and department of health (where the latter look for more funding, and the former look for offset efficiencies) this may be unlikely.
It was expected and necessary but the issue I have is what caveats are to come? Is it to go back to constitutional standards or will new standards and targets be put in place? How much of this will go into social care? We certainly need to see more detail. However, there is a downside to extra funding because it does not encourage systems to transform, to adapt to what is already available. With additional funding, systems often remain the same so in some instances money can be an inhibitor. There is also the proposition that the PM wants a ten year plan which makes me question, how radical this should be and will it be consistent with the existing five year plan?
There needs to be a debate about service provision. The technology is there to facilitate but we have a growing ageing population which inevitably puts an increased demand on services. Patients should be given more choice and we should be weighing the balance between treatment and non-treatment.
Organisations also need to forward plan for services. STPs were originally introduced for this very reason to redistribute/allocate specialist services across their regional footprints, even if that meant travelling for specialist treatment.
I don’t think we can defend the NHS as the best in the world without looking at other countries in comparison. The NHS is by far the most cost efficient but not necessarily the most effective. We should also be focusing on educating patients and investing efforts in areas such as social prescribing. We need to empower patients and encourage them to take greater control over their own health.
Michael Treharne will be speaking at the UK Health Show, participating in a keynote panel debate focusing on incentivising prevention vs. payment by results on day 2.
Join us at the show on the 25-26 September to find out more.
This interview conducted by Natasha Smith, Senior Programme Manager, UK Health Show