Still no change in NHS finance after Francis

There’s a terrible blame culture in the NHS, runs the old saying. And I’m about to tell you just whose fault it is.

‘Monitor was the ogre which the Staffordshire directors were so anxious to please’

Of course we prefer not to do blame, recrimination and all that nasty stuff. Yet everyone knew Robert Francis QC’s report on where it all went wrong at Mid Staffordshire Foundation Trust would make uncomfortable reading. Even the dogs in the street knew broadly what the wise QC would write, so then also presumably did NHS England when, in December, it published Everyone Counts, its planning guidance for 2013-14.

So if, as we have been told, Francis changes everything, what is actually changing in the NHS business and financial regime? 

The business regime is, you will recall, rather central to Francis’s findings. One reading of what happened in Stafford is that a trust board, browbeaten by a performance management culture and terrified of not becoming a foundation trust, placed financial balance above patient care. In pursuit of acceptable earnings before interest, taxes, depreciation and amortization (EBITDA), frontline staffing levels were hacked away. Quality and safety were allowed to slip catastrophically. 

Protecting the regulator

Implicitly, Francis blames Monitor. Monitor, after all, was the ogre which the Staffordshire directors were so anxious to please. Monitor, the organisational embodiment of competition, marketisation and the down-side scenario, famously led by a man wishing to see the NHS dismembered. Mr Francis calls for a single regulator to oversee “corporate governance, financial competence, viability and compliance with safety and quality standards”, and suggests the Care Quality Commission might fit the bill.

But Monitor has been protected. Barely was Mr Francis’ ink dry when the health secretary assured Monitor its economic regulator role is sacrosanct. David Bennett, chief executive of Monitor, argued it was “important, if possible, to avoid destabilising the organisation”: a plea which doubtless prompted wry smiles among departing primary care trust directors. Not to mention at the Audit Commission.

‘The post-Francis context looks remarkably like “business as usual”. Which is slightly worrying’

Possibly then, the blame should reside not with Monitor but with the failure regime: the regime that imposes such severe consequences on trust boards wading through near-impossible financial messes. Might we see some acknowledgement that, with integration across primary, secondary and community care nearly everyone’s preferred future, carving up a “failing” trust and throwing the bleeding chunks to waiting predators is hardly fair to those trusts, or the communities they serve? Hardly encourages managerial talent to take on challenged organisations?

It is not as though the regime has a spectacular success record. Witness the debacle of South London Healthcare, where the only solution from the appointed administrator dragged a neighbouring trust into the mire and provoked very public opposition.  And there’s little likelihood of the next beleaguered trust – Mid Yorkshire Hospitals, perhaps, or Epsom and St Helier – offering an easier ride. Their problems are deep-seated and unlikely to be resolved by a £5m fee to an accounting firm.

No, the failure regime also seems sacrosanct. In January HSJ reported a tender process for a £300m four-year contract, to pay for future teams of consultants and accountants. Financial failure, clearly, is not going out of fashion.

Blame the numbers

Perhaps then, blame should rest not in the financial model but in the numbers: the imposition of “efficiency targets” so large they dominate management attention. Targets, rebadged as the “Nicholson challenge”, which provide a smoke-and-mirrors route to meeting pledges on NHS funding levels, yet also shuffle £1.5bn per year back to the Treasury. The Commons health committee has been openly critical. Time to ease up on austerity?

Well, any softening in the savings regime is at best marginal. True, the planning guidance assumption of a 1.3 per cent cut in tariff prices for 2013-14 was trimmed to 1.1 per cent, reflecting “changes in underlying costs faced by providers”.

‘If all else fails, blame the boss. And his successor. And the next boss too’

But it is a little early to uncork the champagne. The 30 per cent “marginal tariff” for additional non-elective admissions continues. So does the withdrawal of funding for readmissions within 30 days of discharge. And Everyone Counts effectively freezes 1.5 per cent of commissioner funding in contingency funds and “surplus” requirements. Financial pressure on providers will be sustained or even increase in 2013-14, while another large underspend will be returned to George Osborne.

In short, the post-Francis context looks remarkably like “business as usual”. Which is slightly worrying.

Of course, you could always blame NHS managers as a class, for being so pig-headed and cocksure and not deferring to the doctors like they used to. Or whoever it was that encouraged nurses to become graduates and get ideas above their station. Or, if it makes you happy, you could blame “the culture”.

Finally, if all else fails, blame the boss. “The man with no shame,” as the Daily Mail describes him. And his successor.  And the next boss too.

Noel Plumridge is an independent consultant and former NHS finance director