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The annual planning process

by Rob Findlay

Every year the NHS plans its future activity in great detail. And things never turn out that way. Why? And what should change?

Each year, information professionals in Trusts and PCTs devote enormous effort to the annual planning round. Activity for the coming year is described in intense detail, broken down by HRG, by calendar month, by specialty, between electives and non-electives of various kinds, and not least between each separate commissioner and provider.

Every year, the plans fail to anticipate reality. The finer the detail, the more inaccurate those details are. It’s nobody’s fault, because the demand for healthcare is largely random. But shouldn’t we be wondering what is the point of all this planning? And worrying, perhaps, whether any attempt to stick to such plans might be suppressing innovation and improved pathways of care?

This is an example of a point raised in an earlier post, which contrasted the conventional NHS conception of “strategy” (a kind of long-range plan) with Carl von Clausewitz’s conception of strategy as a way of responding to events in order to achieve an objective. So let’s start with the objective, and then look at the theories that might guide our responses to events.

The objective is fairly straightforward: for each Trust and PCT to balance its books at the end of the year, by planning activity to fit the budget available.

Simple as that. We don’t really care about the activity for Minor Ear Procedures in June, even though we may specify it. And the process we use to draw up our plans reflects our real priorities. Nobody picks through the detail, number by number, estimating from first principles exactly what each number should be. Instead we start with whatever happened last year, and apply some broad assumptions about demand, the tariff, shifts to daycase and outpatient settings, and some particular adjustments if we know that certain pathways are going to change. This is a top-down planning process, disguised in its presentation as being bottom-up. Perhaps, as expert providers of top-down planning services, we at Gooroo Ltd should hesitate to say so, but this is really not the best way to go about it.

A genuine bottom-up planning process would start by defining the bottom. HRGs? Months? I don’t think so. How about GPs? That’s more like it. If our theories about how to achieve financial balance include giving GPs greater control over finances, then the plans should be directly relevant to them. So commissioning GPs need to know in real time how their overall referrals and costs compare with their indicative budgets and with last year. If a particular area is ballooning out, they need to be able to spot it and address it. If an individual patient ended up costing many times more than expected, they need to spot that and challenge it. If a waiting list backlog needs tackling, then activity will need to exceed referrals temporarily. Note that this is not the same as increasing the level of planning detail; it’s about defining the objective at the right level and then being able to monitor and respond as time goes by.

If that is the intention, then where does that leave our planning process?

Firstly, it unhooks the commissioner plans from the provider plans. They do not need to reconcile. Trusts would plan in the same way as any market-driven business: anticipating likely trends and competitive effects, and looking for areas to expand or contract, to break into or withdraw from. If they cannot attract the referrals they were hoping for, then they need to adapt. They cannot expect any plans that commissioners may (or may not) draw up to translate automatically into referrals or income. In short, trusts would plan less and respond more.

Secondly, it pushes genuine monitoring and planning to GPs. GPs need to be equipped to do this, and given an interest in doing so (a big subject, and best left for discussion in another post), but they are certainly capable of doing it well. The role of PCTs in acute commissioning is then to act as a kind of bank manager, supporting GPs in setting, monitoring and balancing their budgets, providing the IT systems and central analysis they need, and helping to administer risk pooling arrangements.

That is very different from the current planning process. But then again, it might turn out to have its uses, even beyond the early days of each new financial year.

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