Responding To The NHS Financial Challenge

Money and the lack of it in the NHS never seems to out of the news and media for very long.   Report after report suggests that if we carry on as is there will be a significant gap between what is available and what is needed.


An HFMA Briefing in June 2014 highlighted that for the year to 2013/2014 more NHS organisations were in deficit compared to the position in 2012/13.


In many ways this is not surprising.  When faced with financial challenges NHS Finance teams have often been very good at finding short term fixes.  Trouble is the level of flexibility around these short term fixes over the years has continually declined.


Service improvement, re-design, reconfiguration, reducing bureaucracy and improving efficiency are also held up as being what is needed.


Of course all of these will help.  On the other hand little or no progress has been made in terms of reducing demand.  Staff in the NHS cannot be faulted for effort in this area but it seems that despite the best efforts limited progress has been made.


Perhaps the reason why demand management has not really been successful is that no one can really control it.  The decision about whether to access health services is made by the individual.  With more focus on educating people and encouraging them to look after their health it seems like the demand can only ever keep going up.


If that is the case then it seems like there is a need for some open and honest debate.  Ultimately it comes down to decisions around:


  • What services will be provided and what services won’t
  • Whether more services need to paid for than at present
  • Whether some new ways of funding healthcare are necessary


Now I don’t for a minute believe that these decisions are easy.  At the same time it is not easy for people on the ground who are having to run services where safety is paramount.


Staff costs are still the most significant area of spend.  If you take staff out of wards and departments you might reduce expenditure.  At the same time it means that you either have to take out some capacity or take greater risk.


If you take out capacity and the demand does not change, patients will more than likely wait longer for emergency or planned treatment.


This might not be hugely popular but I am sure most would put safety ahead of speed.


Clearly all of this is complex.  Expecting a handful of people in the organisation or across a health system is never going to work.  Everyone needs to play their part from government level down to patients.


At an organisation this requires people to better understand the relationship between what happens operationally and what impact it has financially in depth.  Having a surface level of understanding is not enough.  Ultimately it is about team work.


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