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Current NHS funding leads to reduced collaboration at system level, a National Audit Office (NAO) report has said.
The NAO’s seventh report on the NHS financial sustainability, published today, said that ‘the current funding flows in the NHS are complicated and do not support partnership working, integration and the better management of demand’.
The independent parliamentary body said NHS England and NHS Improvement should create the right incentives for NHS bodies to collaborate.
Financial incentives such as Sustainability and Transformation Fund payments to trusts have helped providers improve their performance, the NAO said.
However, they encourage them to focus on short-term gains ‘at the expense of collaborating with other local bodies’, the report added.
Local partnerships: different stages of development
The NHS long term plan set the ambition for all Sustainability and Transformation Partnerships (STPs) to become Integrated Care Systems (ICSs) by 2021, discouraging trusts and CCGs to make decisions that ‘would result in a worst position for the system overall’.
However, the NAO report highlighted that local partnerships are at different stages and that it’s difficult to determine their progress as NHS England and NHS Improvement have ‘yet to repeat their baseline assessment of sustainability and transformation partnerships’ progress, published in July 2017’.
The report also said that collaborative working is vulnerable because partnerships are not statutory bodies and are based on goodwill, which means individuals organisations need to meet their own statutory requirements first.
‘Continued financial pressure will test this goodwill’, according to the report, which highlighted that CCGs have a reported overspend of £213m while trusts have a combined deficit of £991m, plus a self-reported underlying deficit of £1.85bn.
Supporting system working
Responding to the NAO report, NHS Clinical Commissioners chief executive Julie Wood said:
‘As we move towards more collaboration and system working, it is vital that financial and payment structures support this and resolve perverse incentives that encourage a focus on individual organisations as opposed to system working.’
BMA council chair Dr Chaand Nagpaul also said the NHS should ‘end the use of payment by results as a funding method for the NHS and move towards a system advocated by the BMA which supports collaborative working’.
Dr Nagpaul shared the NAO’s concerns that the extra funding announced for the NHS in June 2018 might not reach frontline staff, as it will be applied to NHS England’s budget rather than overall healthcare spending.
He said: ‘We do need the Government to urgently ensure the NHS long term plan is built into a strategy that not only provides stability, but also gives the NHS the resources to meet the growing needs of its patients and to fund a proper workforce.’