Funding flows in the NHS: Parliament to frontline

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Following the money


Webinar report

The fourth Parallel Learning webinar focused on understanding the NHS England ‘money trail’. 

Chaired by Michael Sobanja and with expert insight from speaker Julie Wood, Chief Executive of NHS Clinical Commissioners (NHSCC), this webinar sought to deliver an appreciation of how financial allocations are made in the NHS. It also concentrated on awareness of funding flows, identifying how key decisions are made and how spending arrangements might change in the future.


How is the money spent?

With the help of a flowchart created by The King’s Fund covering the 2016-17 figures, Julie opened by explaining how the money flows to and through the NHS once Parliament has voted on how much it intends to allocate to the health service. Parliament voted to invest just over £120bn in 2016-17, and this flowed down into the Department of Health (DoH), which decided how to allocate the resource to the organisations that play a role in influencing the spend on health, including NHS England and regional teams, regulators and Health Education England, and Public Health England. Julie then covered how that money flows from commissioner to provider – acute care, mental health, community services, and primary care, including GP practices and community pharmacy.


Risks and opportunities

Julie went on to talk about the opportunities and risks posed by the shifting NHS landscape – pointing out that: “Nothing stands still in the NHS”. She said that the development of Sustainability and Transformation Partnerships (STPs) means that commissioners and providers are being asked to work much more closely together in terms of commissioning and delivering care.

“It’s the politicians’ job to determine how much the NHS is allocated and what it expects for that allocation, and it’s NHS England and its commissioners’ job to make the very best of the NHS pound,” concluded Julie. “You can only spend the same NHS pound once, therefore it’s really important that we spend it on the right thing, so that we get the best return on that investment.”


The death of commissioning?

In the Q&A session, Michael Sobanja asked if STPs and the move towards integration, “Really mark the end for CCGs and commissioning?” Julie responded that it doesn’t mark the end of either, and that the activities we currently enjoy as part of a commissioning process are the very same activities that any healthcare system has to go through.

“It has to decide on priorities, it has to decide what to do about those priorities, it has to plan healthcare, it has to understand the healthcare needs of its population,” Julie explained. “Commissioning is here to stay. We might change the language, the lexicon, but we still have to have a commissioning focus.”


Working together

Julie pointed out that in the last couple of years commissioners have been working much more collaboratively together: “How they work together to transact their commissioning activities is where I think we will start to see, and are seeing, differences. What’s really good for STPs is that for the first time in a long time we’re having commissioners and providers getting around the same table.”

She added: “If there is much greater ownership of the same pound that you can only spend once, it will free up the opportunities to start thinking differently.”


Under pressure

Michael cited a recent report by The Health Foundation, in which the charity identified three ‘unavoidable financial challenges’ that need to be tackled by the incoming government if it is to maintain healthcare and social care services. Any shortfall will inevitably result in downward pressure on budgets, including on drugs budgets, he said.

“With its current level of resource, the NHS cannot do all that it is expected to do,” agreed Julie. “There is no doubt that the NHS is under significant pressure. This gets us into the territory of difficult choices. We have to make sure we’re doing things as efficiently as possible.”

When a delegate posed the question, “Does greater integration mean the end of differential pricing for pharma?” Julie referred to the development of Regional Medicines Optimisation Committees, saying that a national system of medicines optimisation across the country could help to ensure delivery of the right care and outcome: “Pricing of drugs is part of that, as well as how we reduce variation in spend and take–up of medications.”


Delegate feedback

“Really excellent. I certainly learnt a great deal.” Simon Reese, Regional Business
Manager, Apodi.   


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Julie Wood’s NHS career spans 30 years, focused on service development and innovation in primary care and commissioning, with the last 16 years at Director or Chief Executive positions within health authorities and primary care trusts across the UK.