‘Major overhaul’ of NHS finance system needed

Following news that the NHS financial deficit was twice the amount planned last year, a new report has argued that more resources will fail to deliver results unless there are major reforms to the current NHS financial system.

Working alongside PwC, the Healthcare Financial Management Association (HFMA) has explored how financial flows could be redesigned to find a better way to make money work in the health and care system and examined why change is necessary to maximise benefits to patients.

Some 76 per cent of HFMA members think that the current financial structures in the NHS are not fit for purpose. Making the money work in the health and care system therefore proposes that financial flows should be aligned with the emerging place based architecture and that systems should be provided with more clarity through longer-term funding. Furthermore, the report states that money should be focused towards achieving better outcomes.

Led by former health secretary Alan Milburn, who is chair of PwC Health Industries Oversight Board, the research found that too much of the money invested into the system and the way it flows currently is focused on increasing activity in hospitals, rather than improving outcomes in the community, making it predominantly short term and often missing the point about prioritising prevention rather than just treatment.

Milburn argues that the current financial system is ‘caught in a time warp and needs to catch up’, suggesting that, without reform, the NHS financial system will be a ‘stumbling block to the service transformation that is so desperately needed’.