This statement was issued by Sir Amyas Morse, head of the National Audit Office, yesterday:
Running a deficit seems to be becoming normal practice for acute trusts. There is a risk that poor financial performance is seen as the least worst option compared with poor healthcare provision. The Department, NHS England, Monitor and the NHS TDA must take a rounded view of how to improve trusts' finances. The government's commitment to give the NHS more funding, with almost half of this coming upfront, could be a significant step towards financial sustainability, if this funding can be devoted to improving the financial position of trusts rather than dealing with new costs. Continued demand for healthcare services means that the pressure on acute trusts will not go away. Until there is a clear pathway for trusts to get back to financial stability, we cannot be confident that value for money will be achieved.
I would add, before commenting, that Sir Amyas Morse was previously a senior partner at PWC.
Maybe that is what informs his view. I cannot, of course, be sure, but what is offered here is quite extraordinary. First there is surprise that:
Running a deficit seems to be becoming normal practice for acute trusts.
Of course it is! Why on earth would an NHS trust want to underspend the money it has been given? When its job is to provide health services why would it decide not to do that? These are not private sector activities run for gain. They are public sector services run to meet need. In that case of course deficits are what they should expect. That Sir Amyas does not comprehend that leads to doubt as to his fitness for the task given to him.
So does this lead to similar questioning:
The government's commitment to give the NHS more funding, with almost half of this coming upfront, could be a significant step towards financial sustainability, if this funding can be devoted to improving the financial position of trusts rather than dealing with new costs.
Or, to put it another way, balancing the books comes before meeting health care need.
Now, I admit, the last two sentences might suggest some comprehension of the conflicting aims within the NHS, but only some at best. As the report also notes:
Despite recent efforts to work together, interventions from the Department and its arm's-length bodies risk creating perceived or actual competing priorities for trusts. One area where advice to trusts could have created actual or perceived conflicts is on safe staffing. The Department's interventions to reduce trusts' spending on agency nursing staff, for example, came at a time when acute trusts needed to recruit more nurses to meet safe staffing guidelines, and when the vacancy rate for permanent nursing staff was high.
It's right to point out that the NHS's senior management are confused. But it seems to me that Sir Amyas may be no less confused as to priorities: it would seem he values financial stability more than healthcare, as well a former PWC partner might. But for the country as a whole that is the wrong priority and when those tasked with key roles within its management do not understand that we need to worry about three things.
The first is the future of public services.
The second is who we can stop such inappropriate appointments.
The third is how we might restore a proper civil service, which was once the backbone of much that worked well in our society.
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I will confine myself to saying that Sir Amyas is disingenuous: economists and commercial accountants struggle with the economics of healthcare, but I think that he – and others – are happy to leave their confusion unexamined and unresolved.
I find that there’s a litmus test for economists and for accountants: do they seek to make things clear, or do they seek to obfuscate?
You, yourself, might need to clarify your analysis:
“These are not private sector activities run for gain. They are public sector services run to meet need.”
It’s not just a ‘public sector service model works better’ issue – although that is definitely true: the economic model is wrong. There is no business model, and no possible construction of a market, in which profit-driven market participants can successfully provide healthcare services.
You can identify individual items to be bought and sold on market terms; but the services of assisting the sick, curing disease, and delivering improvements in the general health of the population, do not fit any economic model of profit-taking and returns on investment.
All attempts at introducing for-profit services fail: from America’s unnecessary interventions to a care home’s callous cost-cutting, to specialists in ‘diseases of the rich’ and cherry-picking by insurers and the ugly fact that poor public health is, in economic terms, a ‘sales driver’ for intervention-led profit models…
…It all ends up with the conflict between health and profit losing both ways: unhealthy and unprofitable, except to a handful of rent-seekers far-removed from the actual healthcare providers.
Economists and managers who have that economic worldview – who can only think in terms of profit and return on investment and managing the commercial tensions of the customer-supplier equilibrium – might as well be mediaeval theologians when they come to healthcare: they are utterly irrational and might as well apply their logic of angels, devils and dancing on a pinhead to the intricate relations of subatomic particles.
In practice, they are worse than naive theologians: they are a destructive Inquisition, confronting whatever does not conform to theur prejudices with denial and destruction; and they are knotorious for proclaiming it ‘reform’.
The truth beneath the confusion is simple: the commercial model doesn’t fit healthcare: it’s an economic fiction – a delusion – to say that it does, and imposing an approximate fit that restricts the perverse incentives with a thicket of regulations and complicated contracts creates the most perverse incentive of all – a class of bureaucrats and auditors and specialist ‘accountants’ with an interest in making the system profitably complicated and opaque.
And this is where Sir Amyas came in.
Agreed
“knotorious”
I like it.
It might be that we are all reading this in the wrong way. You’re spot on that NHS trusts should not be aiming to run a surplus if it’s aim is to provide the healthcare needs of the people they are supposed to be serving, but as we suspect that privatisation is a non-disclosed aim, what private investor would take on services that are losing money? That would suggest, maybe, that the aim of reducing/eliminating the deficit is to make the trusts more attractive to private investors when the time comes to sell them?
You may well be right
That would suit the PWC agenda
The rot stated in when the media started talking about hospitals “making losses” rather than “overspending”. Overspending can be caused by achieving more: having more injuries to deal with, treating more sick patients.
Language is key here and the sociolinguistic implications:
Clearly we need to redefine what costs really are.
Clearly we need to redefine what deficits really are.
Clearly we need to redefine what value is.
Sir Amyas (Wiki: “Amyas is a surname and male forename thought to be derived either from the Latin verb amare or the city Amiens) is using a language frame which reifies money to the detriment of life.
Internal market, Management consultants, PFI, tendering by NHS providers to run ambulance services and such, all these pointless presentations cost money that should go to front line services. The heart and soul is being ripped out of the NHS.
Sir Amyas, never heard of him, doubtless has never used the NHS, sorry if I am wrong. I abhor with a vengeance the damage done by these puppeteers. Those who work in it give their heart and soul to it, try a shift on a busy acute hospital, or a district nurse round, follow the young Doctors on A/E, a GP juggling priorities and decisions.
I am very cross to put it politely.
So what we are actually saying is that:
Budget surpluses are being used to signal to the markets that in the long run these Trusts can deliver a return to investors – and a return that can keep going up – when they are eventually privatised.
What a great incentive to the ermerging management class in the NHS who will be anxious to retain their positions when the investor comes along.
I have to admit that I have never thought of this issue like this before. ‘Just goes to show that it is always well worth turning up here!
Compelling. So the efforts that heave been made to get people to lead healthier lives are not for our benefit perhaps but infact to help the investor and the Trust generate a regular return.
Incredible.
This can be the only purpose for the comments
Why bother to run a surplus, if that surplus will be returned to treasury?
As it has been, and will be again.
If you have a deficit, you need more money.
If you have a year-end surplus, you get less next time the money train stops at your station.
Meanwhile, in our real world [far removed from the westminster 650-seat toilet], the local hospital has zero beds available now….some ambulances are just dropping-by to get instructions to depart immediately for another [full] hospital 25 miles away.
But conservative, and (previously new) labour backers are busy drooling at the prospects of endless cash…
It’s all down to the nonsense of state technobabble!
If the government chooses not to fund public service budgets sufficiently to meet the level of public needs, it is inevitable there will be “overspending” and “deficits” unless we are to become such a heartless country to turn away those in need.
It’s about time the real questions need to get back into the public domain such as what is the economy for (private gain or public well-being), how best to achieve maximum public happiness and how to act responsibly as the guardians of this planet for future generations.
Until we have a government that does not pander to corporate interests, this non-sensical drivel will prevail from people who have been so “highly educated” (i.e. indoctrinated to the point they can no longer think for themselves) that they’ve lost sight of all common sense, reality and humanity.
OK, but how does one measure how a Trust is badly managed ?
You think cash management and health outcomes are necessarily equated
It us easy to think of financial KPIs for the NHS, but balanced books would not be a good one
The answer to that is simple Stephen.
You ask those who use the service about their experiences.
And then you fund the improvement response from the org adequately to address any issues until customer satisfaction is restored.
I believe that this is not currently practised in the NHS as much as it should be because I’m convinced that its being made to operate poorly by this Government in order to get people to accept that privatisation will cure its problems – problems that have been manufactured by market-mad politicians.