THE GOVERNMENT is planning the biggest reform of the NHS in its history. From April 2013, 80% of NHS funding will be devolved directly to GPs in a hugely controversial move.
There are concerns among every major health group that it’s too much reform too soon and risks financially destabilising the service. For finance professionals it’s a period of massive uncertainty. Thousands of job losses loom and any potential roles in the next stage of the NHS are not completely clear yet with the political wrangling over the reforms intensifying.
Under the Health & Social Care Bill, two major tiers of the NHS, strategic health authorities and primary care trusts, will be abolished. Consortia of GPs, which currently cover around 87% of the country in shadow form, will take over £80bn of the NHS budget and directly commission services for local patients. They will be funded via a new NHS Commissioning Board, which will calculate GP’s annual budgets based on their patient lists and the levels of socio-economic deprivation in consortia areas.
The idea behind the reforms is to devolve commissioning down to a local level to ensure that patient services are clinically led. Through closer interaction between patients and GPs the theory is that treatments will be more responsive and patient-focused and this shift is widely supported. However, the scale of the transition and its implementation timescale is highly ambitious.
The ten strategic health authorities, which monitor performance, will close by 2012, although most are already shedding staff and starting to wind down. The 151 PCTs, which commission primary care, are in the process of being folded into 50 clusters and will disappear by April 2013. This is further complicated by the demand for all PCTs to be debt-free, for the NHS to make up to £20bn in efficiency savings and to cut management costs by 45%. Implementing such structural change while significantly curtailing costs is a tall order.
For the new consortia, which could number anywhere between 300 and 500, they will have to perform a fine financial balancing act. The new system will have to meet patient needs but remain within a tight fiscal envelope, which means the demand for financial control has never been greater. “Consortia are going to have to maintain a tight financial grip to ensure there’s no slip back into overspending,” says Chris Calkin, chairman of the Healthcare Financial Management Association’s policy forum.
“There will have to be the necessary assurances to Parliament about giving £80bn to GPs and one way is ensuring that controls are in place.”
Calkin says this inevitably means a greater role for finance professionals. “There will be a lot of effort going into reducing transactional costs, sharing services and getting efficiencies out and all that says to me that people will want to invest in financial controls and expertise.”
But he concedes that the picture currently looks gloomy due to the uncertainty still surrounding the reforms. He estimates that between 3,000 and 4,000 finance staff will lose their jobs as the SHA and PCTs fold but says once “this period of uncertainty” passes and more details emerge he expects new opportunities and new career paths to open.
The HMFA has already run a course, Taking Control, to help prepare staff for interviews and tailor CVs. Funded by the Department of Health over 3,000 finance staff have already taken the course, mostly from PCTs and SHAs hoping to transfer to consortia or other sectors.
“We have tried to encourage movement between the sectors in the past, but it can be a challenge,” he says. He adds that these finance professionals will have fully transferable skills and he’s positive about them finding opportunities in the new consortia.
“They will have to break down their skills from dealing with finance at a macro level in PCTs to micro levels for GP consortia,” he says. “There should be a good take up on new roles so it may be less about losing jobs and more about changing roles.”
Andrew Hine, head of UK healthcare for KPMG, said it’s unlikely that the NHS will significantly lose the finance skills it has already built up. But he warns that consortia will need to select the best blend of skills and the best-equipped people to support GPs in the new regime.
“I don’t expect there’ll be a one-on-one transfer,” he says. “You would expect to lose congruence.” Hine says one of the biggest risks will be the time it takes GPs to develop commissioning skills and understand control of resources and prioritisation. He adds that GPs will need strong support.
Hine goes back to Calkin’s earlier point about using financial controls to reduce risks and says finance staff will need a multitude of skills, from establishing “risk pools” between consortia to create contingency funds to managing efficiency demands.
The Department of Health has also made it clear that it expects consortia to share senior finance staff, particularly chief financial officers, which curtails some of the deployment potential in the NHS.
David Flory, deputy chief executive of the NHS says he thinks it would be a “struggle” to find the number of CFOs needed for all the consortia. But he signalled the importance that finance professionals will play by adding that he intended to get “very involved” with the recruitment process to “make sure we have the right people in the right places”.
It is clear that however these reforms pan out, finance professionals will be at the forefront of supporting commissioners. But there is a danger that in such a tight fiscal environment finance, not patient care, becomes king.
Calkin, also deputy chief executive and finance director at North Staffordshire University Hospital NHS Trust, says we need to learn the lessons from GP fund holding in the 1990s where managers took over from GPs. “We have to make sure that this stays clinically-focused and doesn’t become just a numbers game,” he says.
Karen Day is a freelance journalist
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