Future Focused Finance – Working Group Meeting (08/09/2014)

Present

Bill Shields -Imperial College Healthcare NHS Trust (Chair)

David Ellcock – NHSE

Nick Robinson – SC CSU

Robert Jackson- BT

John Nielson - Steria

Neil Callow –Empath

Sarah Brampton - Devon Partnership NHSFT

Neil Kemsley – NHSE

CharlesNall – Moorfields Eye Hospital NHSFT

Suzanne Tracy – Royal Devon and Exeter NHSFT

Simon Collier – EY

Sunny Sanghera - EY

John Yarnold - MVC ltd

Apologies

Richard Samuel - Hants CCG

Mary Pettman – Hants NHS trust

Paul Mapson – United Hospitals Bristol NHSFT

Simon Marshall – Ashford and St Peters NHS trust

Martin Sykes - Frimley Park NHSFT

Sandra Betney – Birmingham and Solihull MH NHSFT

Nicholas Cliffe – Kent and Medway CSU

Emma Lunney –Norfolk and Suffolk NHSFT

Mark Mansfield – Oxford University Hospitals NHST

Jon Cooke – North Yorks and Humber CSU

Jon Gamble – University Hospitals Coventry and Warwick NHST

Neil Priestley -Sheffield Teaching Hospital NHSFT

Overview – the general belief is that the Systems and Processes work stream is the enabler for the rest of the FFF work streams, and that the deliverables will be passed on to the other work streams at the end of 2014.

General Points on Work Stream and FFF

  • It’s noted that in some meetings there is a wider representation and less so in others – this could impact on the opinions garnered from the group (e.g. skewing opinions)
  • It was questioned if the scope was entirely deliverable –JY described a prioritisation process
  • Commercial aspect will be picked up within the Service Development area (services covered slide)
  • BS suggested that the way services were described was open to interpretation and asked that these be defined
  • FLC will need defined baseline costs & savings before they will support the proposed changes and further research was needed to develop these
  • What will FLC use this for?

­Will form the basis for the other work streams

­Provide a baseline

­Set context for the other work streams

­Will form ‘where we are, where we need to get to, and how we get there’ piece

  • The expectation for organisations using the MM is that they are to strive to be best in class level, not just to meet everyone else’s position, but there will need to be some leverage applied by the FLC to make sure that all organisations implement improvements
  • We must make it clear that our recommendations are picked up – the danger is that organisations that are already highly rated will take the recommendations to push to the next level, but poor performing organisations won’t pick up on the recommendations
  • Question was asked as to what the ‘Close Partnering’ [work stream] entails – feedback from the group through DE was at this stage they were asking clinicians to establish needs & best value
  • BS questioned how can we be assured that an organisation is moving from one maturity category to the next at an appropriate time and ability (e.g. when they have the correct skill level, systems are appropriate)

­A potential method is by requiring staff to be accredited to prove competence

­There could also be potential controls in place to recognise when something is going wrong

  • Self-assessment should be organisational wide, not just departmental

Revised Plan

  • Working group in process of developing Maturity Matrix (MM) and Benchmark Data
  • Aim of this meeting is to gain views on the overall direction – a first draft of MM will be available W/E 19/09/2014 with the view of getting feedback from working group by 25/09/2014
  • Group want to be able to do live tests of the MM with organisations represented in the working group at the end of September – NK suggested that he could ask other organisations to participate . The group felt this should be welcomed where possible as a broader base involved in testing MM would help to make the results more robust.

Maturity Matrix (MM)

  • A draft matrix was circulated to the group
  • Further development work was needed and in particular performance metrics will be added in some cases linked to individual questions on the MM and in others to a section
  • The MM has been drafted by the project team whose recent experience was mainly in the acute sector so further development of the MM will likely require greater input from non-acute organisations.
  • It may be difficult for organisations to be completely in one ‘bucket’ in terms of level of maturity – it’s more likely that they will be a combination of 2 or more levels
  • BS suggested that some questions need to be more specific and others less so – the group suggested that there will be lessons taken from the private and other organisations to help shape this – the questions will be linked to metrics backed up with benchmark data
  • Caution needs to be shown when looking at privatesector benchmarks, asin some cases private sector [finance] functions tend to be more costly – JY stated that there was a much broader range in the private sector and that the very best organisations out performed NHS and other public sector organisations but often NHS average performance was better than average private and other public sector benchmark. It was suggested that NHS organisations tend to sit in the middle in comparison to good and bad private sector finance functions
  • Suggested some points should not be so specific e.g. TDABC
  • Moorfields has a multi-currency requirement, as do other organisations, will this be picked up?

­There is often great friction in the commissioning environment, largely born out of poor data quality; it seems like CCG’s and CSU’s are largely on board with this program

  • Will behavioural & cultural aspects be covered within the MM? it was said that often the importance placed on the metrics will impact the performance against – e.g. a metric that is widely considered as meaningless will likely be ignored by those that need to deliver it
  • Each category will have performance & quality metrics to achieve in order to be considered in that category – i.e. for an organisation to be in a particular category, they will need to meet certain metrics and standards
  • It was suggested that the context of the rating must be considered before the org can be held to account for their performance against the question – the group were told that the tool is designed to give the organisation an idea of where the issues are so they can focus their development
  • How will organisations develop up to the next category?

­The group will produce next steps documents which will cover things such as exemplar examples and advice on how to progress

  • It was suggested that the current conversations on pricing are very basic and more discussions, work and debate needs to happen around it
  • The chair felt that the business partnering section of the deck would have more input/focus from non-finance functions and suggested perhaps the titles could have less focus on finance –The project team were asked to update to include procurement and other support functions.General discussion suggested that business partnering required unique skills that are hard to obtain – experience suggests that business partners quickly revert back to management accountant type data crunching
  • SCsuggested that the majority of business partner time is spent on administrative tasks – how do we stop this and focus on value adding activities?
  • Business partnering metrics – profitability could be one, but it is difficult to determine the cause and effect (how to be sure that increased profitability is as a result of business partner actions?). However as one of the major roles of a business partner is to influence and educate this measure of improving profitability or contribution was still felt to be a reasonable target for business partners.

Discussion around Shared Services

  • There is clear evidence that Shared services can reduce transactional services by 20-30%
  • if an organisation is not using a shared service and meeting the financial process metrics, there should be explanation on why they have not; consideration needs to be taken to ensure that organisations don’t simply just state that they are more complex, special etc. and therefore they cannot use shared services
  • IT is not essential for every transactional service to be with the same self service provider
  • CN suggested that Operational Metadata Standardisation could be developed at a future point

Establish NHS clearing system for inter organisational charges including PBR

  • It was proposed that inter organisational trading in the NHS could be handled by an independent layer acting as a clearing house.
  • It was agreed that significant levels of resources were engaged in often “combative” negotiation and challenge processes on moving money around the system, where no real value was being added
  • Some basic issues for inter trust trading on agreeing invoice amounts could be potential for quick wins
  • Considerable issue around clinical coding of patient activity is impacting greatly on data quality
  • It was suggested to the group that we test the [deliverables] in areas where there is a 1 to 1 provider to commissioner environment
  • It was suggested that real value can be added by removing org to org ‘noise’ [created by poor data and inability to agree on invoice amounts]
  • Data and coding is not part of this work stream] but it is suggested that they are pushed
  • The question was asked if there was scope to mandate some of the recommendations this can only be answered by the FLC and to enable them to make a decision the group will need to collect baseline cost data and develop the proposal in more detail[Standardised Coding & Data could be key, and shared service providers could help with this]

Defining business partnering and business analytics

  • It was proposed that whilst we await definition of business partnering from Close partnering group we needed a working definition to enable us define the supporting systems and processes ie the business analytics which would support the function
  • CN suggested that there are essentially two approaches:

­Orgs will look at what is wrong (systems, processes etc.) and focus on fixing them, or

­What adds value and focus on developing that further

  • Business partnering focuses on identifying what adds value
  • There was some debate on the categories presented and whether they were part of business partnering or management accounting
  • Rob Jackson stated that business partnering is a “thin layer” between management accounting and management and uses the outputs from management accounts and business analytics and advises management on actions to be taken and optimal decisions in the light of the evidence. In this interpretation this would exclude financial planning , budgeting and forecasting
  • JY proposed thatwe should be proposing the use and development of systems which enable clinical managers to plan and forecast using meaningful “currencies” , such as volume of patients to be treated , average theatre time and length of stay , staffing templates with the system using algorithms to calculate the financial value of the resources being planned or forecast to be deployed. In this scenario business partners would be closely supporting their managerial and clinical “customers”
  • What was clear to all though was that business partners are interpreters of information and advisors, influencers and educators. They should not be spending their time extracting manipulating or formatting data.
  • Many organisations have invested heavily in recent years developing performance dashboards. However these have mainly been developed within silos so dashboards focus on finance, activity, theatre utilisation, RTT performance etc. The project believe that to fully support effective business partnering these should be developed to meet the needs of the various roles. The purpose of these “dashboards” would be to help the responsible person identify , or get as close as possible to, the root cause of any variation from paln or standard
  • The project team posed the question as to whether we should be developing standardised report
  • There was a suggestion that developing skills for business partnering is more important than developing standardised reports

Set Standards for Systems Technology

  • Question is it setting or articulating or defining the standard?

­There are some standards that have already been defined, but is a case that some orgs simply ignore

  • How do we make it relevant (the entire FFF) – how do we make it ‘real’ for the organisations?

­Making a compelling case does not mean orgs will definitely up take

  • At what point does Financial Risk Management become a blockage in the system? (resulting from too much contingency)

­Suggested that a more structured approach should be taken to FRM rather than an overly risk adverse approach

  • Question around whether operational staff really understands what the data means and have the ability to analyse it, making the correct decision?

­[Bill’s] experience is that finance and operations focus mainly on just hitting targets rather than really developing the service

Future Meetings

  • Suggested to do combination of meeting in person and WebEx option

­Also suggested that WebEx only used for meetings where there is feedback required from the working group as opposed to general discussions

Timings

  • End of November to have published outputs of MM (self-assessment) FROM sample NHS organisations giving an assessment of where we feel that NHS orgs are in maturity
  • We will also gauge the appropriateness of the MM by monitoring queries from organisations – we must be careful not to send the MM out to sample orgs with the intention to gain feedback on the model as this could unintentionally give orgs a reason not to fully complete
  • A WebEx meeting could be scheduled for shortly before the final working group meeting to finalise deliverable points and any other issues
  • The final working group meeting will be scheduled for shortly before the HFMA annual conference , it may be possible to hold it at the same time. Next meeting initially scheduled for W/C 27.10.2014

Actions

Tasks / WHO / End Date
Brief members unable to attend / JY / 30/9
Complete MM with benchmarking information and distribute / JY/EY / 19/9
Comment on MM to JDY / All / 26/9
Conduct research to collect evidence and baseline costs for recommended changes / EY / 20/10
Complete first draft of report on vision and blueprint for finance - incorporating comments agreed on 8/9/14 / JY / 21/10
Convert MM to self-assessment tool / EY / 3/10
Arrange future meetings and WebEx / JY/EY/DE / 29/9