Give with one hand, take with the other. NHSI and NHSE are confused
The Carter review’s approach to back-office spend is a bit of an odd one, we must admit. According to the report (and NHSI), all Trusts should be spending less than 7% of their turnover on back office functions, meaning in many cases 2% or lower of turnover on IT provision.
If you’re spending more than those benchmarks, you have to write off to the NHSI team to explain how you’re going to get your spend down to the required levels. Tellingly, the Carter report includes the wording that “this should include plans to commit to national shared service models”. Which we also have a number of objections to, but we’ll leave those for our next blog.
So, using a % of turnover measure seems pretty sensible, as it gives a standard benchmark regardless of the size of the Trust. However, there are two main challenges that make the benchmark unworkable.
The first is the historic context of IT investment. What happens in the case of a Trust that has suffered from years of underinvestment in IT, and as a consequence is now having to invest heavily to catch up with the rest of the world? Will they be told to cut their spending and remain a laggard?
The second, and much more worrying one, is that benchmark takes no account of value for money. Which is astonishing really when you think about it. The table below illustrates the fundamental problem:
And of course, what the above doesn’t show is that increased NHS digital maturity is universally acknowledged to be unavoidable if the NHS is to modernise and survive. So although Trust A may well be offering equal value for money to Trust B from its IT, it will be slowly failing.
In effect, the approach from NHSI is enforcing a national dumbing down of NHS IT. Of course there are always efficiencies to be made in IT service provision, but to assume that digitally mature Trusts can continue to provide the same high levels of service with significantly smaller budgets is bonkers. So, a nation-wide decrease in digital maturity is being driven by NHSI- yet we’re unaware of any wide-spread alarm amongst providers.
But then we have the Wachter Review, which categorically states that the NHS needs to invest more in IT. And highlights the top Trusts in the country (the Exemplars) to be given up to £10m each to show the rest of the NHS what amazing things can be done when digital healthcare is properly invested in.
So- just to be clear- NHSI are telling top digital Trusts to spend less on IT (with a corresponding decrease in quality) whilst at the same time NHSE are handing out cash to the exact same Trusts telling them to spend more on IT to improve their services even further.
Total and utter madness.
There is of course a simple solution to this- measure value for money! Combine digital maturity ratings with spend as a % of turnover. This would give a nice simple (centrally held) value for money rating, and one that would be infinitely more useful to the NHS. Suddenly the NHS would be able to identify Trusts that are delivering great value IT services. These may not be the Exemplars, they may be much smaller, lower profile organisations. But as Exemplars in their own right in delivering optimal value for money, they may be even more valuable in ensuring the NHS continues to digitise under unprecedented financial pressure.