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Go for broke? What is an ‘acceptable’ NHS provider deficit?

I was born just before the ubiquity of the computer in every home and at every desk; iPads were yet to be invented and mobile phones were of the brick variety. In these Neolithic times, your weekend entertainment was as good as your own imagination and often involved board games.  Monopoly was a favourite of mine because I generally won through a combination of good luck and ensuring that I had a hotel on Mayfair and Old Kent Road.  One game I never had a chance to play, but saw in the shops was ‘Go for Broke.’  I found the idea of the game - to give away all your cash - fascinating.  

Recently I read Alistair McLellan’s discussion in the Health Service Journal: What is an acceptable deficit for the NHS provider sector?”  It made me think. I thought of my Monopoly victories when I used to vanquish and bankrupt my opponents. I reflected on the recklessness of throwing away your cash playing ‘Go for Broke.’ It made me muse on what a fascinating question Alistair is asking.    

First, is a deficit acceptable? Should we accept a deficit as the default position? The reality for NHS providers is that currently there is not much choice. In 2014-15 the Department of Health issued £874million in “bailouts” to Trusts with £439million of this sum being classed as permanent revenue support. Many Directors of Finance that I speak with know that the numbers are awful, and lament the status of NHS finances on a regular basis. They often comment that quality must come first, closely followed by numbers. I agree with this view. Recent history shows us what happens when quality is not the strategic focus. 

So what do we do about it? It was Norman Lamb, the former Minister of State for Care and Support who said that the £22billion efficiency savings outlined in the NHS Five Year Forward View were “virtually impossible”. Should we just ‘go for broke’ and hope for more cash?  I don’t think more money is necessarily the answer. During the Weimar Government in 1920s Germany, the government printed more money - it didn’t work.  

I think we have to consider doing things differently. Last week, the first lump sum of £200million funding was announced for Vanguard sites to develop new models of care. Arguably, it’s not nearly enough money but it is a start.  Vanguards are an exciting development within healthcare and I watch their evolution with interest.  I believe the Foundation Trust model is dead, a relic of a former decade.  The Foundation Trust model, when it was first developed, was a laudable concept (greater autonomy and higher clinical standards) but a model that in the present climate arguably serves little purpose.  I believe the boundaries of healthcare delivery are becoming more fluid and the provider/commission split requires a radical overhaul. Recently, a proposal for the first accountable care organisation was announced where Northumberland CCG would transfer most of its budget and nearly all its functions to a provider led organisation. I am very interested to observe the outcome of this work.  

Is radical structural overhaul required to deliver a NHS capable of functioning long into the 21st century? What is an ‘acceptable’ provider deficit and whilst we fathom out how to deliver more with less, should we just ‘go for broke’? As always, I would be delighted to hear from you and welcome your thoughts and comments. 

David Rason is the Consultant for Healthcare at Interim Partners.

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