My mission statement

The times we are working in now need a great deal of accelerated change and there must be no negotiating that down. So my mission statement for this part of my consultancy career is to be clear that there needs to be and will be a lot of change from the work that I do with individuals and organisations and if organisations don’t want that, then it is probably best to go somewhere else.

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What the NHS needs now are commissioners that are good economists, not just accountants.

Filed Under (Expenditure, Primary Care Trusts, World Class Commissioning) by Paul on 29-01-2010

Last Monday January 25th every PCT in the country finished its Commissioning Strategy Plan (CSP) for the next three to five years. Over the next month these will be published and somebody should be making sense of this “bottom up” approach to planning the future of the NHS. In a way, since this is the commissioning intent over five years for about £500 BILLION, it is more important than any DH operating plan or white paper. The collective wisdom of these documents should be describing the future of the NHS.

Even more significant is the problem that if the PCTs do not have the capability to bring these plans into reality the NHS will probably have no future.

I have only read a few of them but I suspect all will have been written with a view to planning for very changed financial services. The work has been carried out within David Nicholson’s parameter of having to save £20 billion nationally over the next few years. These numbers have more or less governed the ambitions of every PCT. So we have 152 plans for a very different future, with much less money.

 Many of them will recognise that the financial problem is not getting less money – the budget will stay more or less at a standstill. The financial problem is the fact that there will be a continued rise in demand for health care without a commensurate rise in resources. With existing patterns of expenditure resources will run out. The problem is not cuts in expenditure; it is the failure of expenditure to keep up with demand for health care.

Once this equation is clear, the problem is too much activity, and if the problem is too much activity then the solution is how to reduce the amount and cost of that activity. The financial question needs an organisational and not a financial answer.

I think this demands very different capabilities from PCTs.

The accountants now know that the money will not add up, not because of some financial problem but because there is too much activity. This means that whilst the people dealing with the money still have to understand how it adds up at the end of the year, they also desperately need to understand how some of that money in the “spend” column actually cuts the activity that leads to further spend.

How if you invest in x it will stop 3x or 4x by stopping demand in y.

I am slowing down this argument for effect. Of course, intellectually everyone actually “gets” this. They have known for years that a failure to invest in one area creates a cost in another.

In fact one example that exists for many of last years CSPs, was quite deliberately built on  the premise of how, if PCTs spent the money on building urgent care centres, they would  save money by cutting the number of referrals into A and E.

The plans were good, but most of them didn’t happen. In a few cases there was an obvious reason and the plan to open an urgent care centre just didn’t happen. It was found it takes rather longer than a few months to get this together, so the plan didn’t happen.

But in many cases the urgent care centres opened – but the numbers of people going to A and E kept rising. The intention of expenditure (a) to save money in hospital (y) was an interesting one, but the relationship between the two was not secured. So the plan to save money actually resulted in two increases. A and E referrals kept going up and cost more; the new service had to be set up and that cost more too. So expenditure increased twice rather than coming down.

And this is what this post is about. The process of planning can have some good ideas, but unless someone is there on the ground with the sole job of realising the financial benefits of investing in x and ensuring that the money locked up in y is actually unlocked, no money is saved.

As I said earlier, if this happens in the coming year the NHS will go bust sometime during the year as there will not be loads of money to bail out the deficits. That’s why the main theoretical skill that the PCT needs is economics and the practical skill that falls out of that is the capacity to realise – that is to bring into reality – the benefits of that investment.

We now know that simply starting new services does not guarantee less of the old. There needs to be a mechanic to bring this into reality 

WCC assurance should be asking if each PCT actually has the capability to make this happen.

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