Management for Doctors: Making finance work for you--strategic issues in clinical directorates

Abstract

The NHS has a long history of underinvestment interspersed with periodic bouts of overspending to relieve the ensuing crises. Strict cash limits make it unlikely that funding will match the multiple demands of an increasingly aging population, rising drug prices, and advancing technology. In this context it is difficult to perceive the finance function as a “flexible friend.” The restructuring of the NHS, with the formation of budget holding clinical teams (directorates) and self governing (trust) status for hospitals, and especially contracting, which brings together activity and financial data, means that clinicians now have the opportunity to influence the use of revenue funds in a more imaginative way than before, to improve patient care. Yet, many doctors view financial management as yet another mechanism for restricting clinical freedom. But doctors who participate actively in financial management within a sufficiently large clinical directorate can make finance work to achieve a clinical service of more uniform quality. To illustrate the point, we have compiled a case history (box) which is not based on any one hospital or health authority. We begin with a clinical service directorate (surgery) and follow with a support service directorate (laboratory medicine). Bottomless Memorial Hospital is a large district general hospital in an urban health authority which also contains one other general hospital and a specialist hospital for the elderly. The three hospitals have recently amalgamated to achieve self governing NHS trust status (Bottomless Trust Hospitals). There has been little or no collaboration between the hospitals in the past, but a new management structure with clinical directorates extending across all three hospitals has now been established by a new chief executive. A computerised clinical information system is also being developed as part of the NHS resource management initiative. Serious financial difficulties in both clinical and support services have …