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How can we deal with financial pressures in health and social care?

The financial pressures facing health and social care can be approached in one of two ways. Organisations can adopt a fortress mentality and seek to protect themselves in the current harsh climate, regardless of the impact on others. Alternatively, they can reach out to partner organisations and work towards a whole-system solution, even if this means sacrificing their own interests for the greater good.

Our recent conference on building an integrated system of care drew on experience in England and other countries to identify four key building blocks of a whole-system solution. First, it is essential to align financial incentives to make it easier for organisations to work together. Current payment systems in the NHS and social care fail to do this, and in a forthcoming paper we shall be exploring how these systems need to be reformed to support the development of integrated care.

Innovations such as bundled payments and year-of-care funding hold promise, but more radical options such as allocating a capitated budget to a lead provider or a provider network merit serious consideration. The experience of high-performing integrated systems such as Kaiser Permanente, which were discussed at the conference, illustrates the advantage of capitated budgets. The flexibility offered by these budgets enables providers to deliver the new models of care we have argued are needed in the future in our Transforming the delivery of health and social care paper.

Second, whole-system solutions require a different style of leadership in public services. The familiar ‘pace-setting’ style that predominates among top NHS leaders must be complemented by a willingness to facilitate change by working with others to deliver improvements in care. This in turn depends on the ability of leaders in different organisations to establish the trusting relationships on which successful partnership working hinges. The Fund will be playing its part in this process through its leadership programmes and support in the field to leaders involved in the development of integrated care.

Third, whole system solutions must keep the needs of populations and service users at the forefront of their efforts. By asking how they can work together to improve outcomes for Mrs Smith, to invoke the fictional user who has helped Torbay deliver impressive results by integrating health and social care, public sector agencies can transcend organisational rivalries and find common cause in the desire to use their combined resources for the benefit of the people they serve. And by ensuring users are fully engaged in the development of integrated care, these agencies can avoid the ever-present danger of providers assuming they know what users want.

Last, but not least, whole-system solutions must be based on sound governance arrangements with absolute clarity around decision rights and accountabilities. Senior leaders of the organisations involved need to provide overall direction supported by joint executive teams and dedicated programme management support. In the absence of these characteristics there is every chance that organisations will go their own way and the fortress mentality will prevail.