Analysis: Still reasons to be sceptical about the better care fund

It is interesting that the government has chosen to make today’s announcement about the better care fund a part of its response to the NHS Five Year Forward View – as that document was distinctly lukewarm about the project.

‘Another risk must surely be around recruitment: many of the schemes require new staff to be hired’

The forward view, led by NHS England and published last week, suggested that the fund should not be expanded without a full evaluation of its impact next year. It also praised many better care fund style integration schemes, before going on to say “some [of these examples] may even cut costs” – a cautious turn of phrase given that this is just the sort of thing that ministers are now confidently telling us will save half a billion pounds next year.

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It is reasonable to be sceptical about the likelihood of every health and wellbeing board achieving what it sets out to in full. In many places, the sorts of schemes being funded by the better care fund – establishing multidisciplinary teams to manage people with long term conditions, setting up improved discharge procedures – will be new innovations. Not every area will necessarily get the implementation right first time – where integration has been successful in the narrow terms defined by the policy, it has often taken many years to perfect.

Another risk must surely be around recruitment: many of the schemes require new staff to be hired – community geriatricians, for example. Recruitment does not always happen instantaneously, especially when demand for certain types of professionals, goes up everywhere all at once.

Mismatched assumptions

We should also not automatically assume that the planned activity shifts will definitely translate into the assumed financial savings. The 30 per cent marginal tariff rate for excess emergency activity is one cause for concern. If emergency admissions do drop by 3 per cent, much of this will be being paid for at the reduced rate, and therefore may not yield significant savings to the commissioner. The Department of Health’s figures appear to suggest that a cut of around 163,000 emergency admissions will save £253m, or £1,550 per admission avoided.

‘Half a billion pounds is not to be sniffed at, but it is only the size of a national winter pressures fund’

Better care fund guidance from August suggested that the average admission cost £1,490, but invited areas to adjust that figure depending on local costs and use of the marginal rate. However, with an average cost per admission of £1,550, the marginal tariff cannot have been a major factor in many HWBs’ assumptions. It is, however, a major factor for many trusts, and this mismatch is problematic.

If the local initiatives do succeed in improving care while saving money – and affecting an heroic 3 per cent cut in emergency admissions against a rise of 5-6 per cent this year – the fund will generate £500m. In reality even that sum should be offset by the amount being transferred to councils simply to support existing social care – a figure the DH has not published today.

Half a billion pounds is not to be sniffed at, but it is only the size of a national winter pressures fund. Put another way: it only accounts for about one fortieth of the efficiency requirement by the end of the next parliament set out in the forward view. Using integration to drive efficiency is a key policy for all major political parties. The limits of the better care fund’s ability to save large amounts of money therefore represent a significant challenge for whoever forms the next government.