“We have several sites that on a financial basis alone we should close, but because of patient choice and accessibility we’ve continued to run them.”
The research provided no evidence as to the ideal size of a network. It was clear that some networks initially grew to address unmet demand without a clear network expansion strategy. Regular network reviews will be needed to assess the point at which an expanding single specialty network becomes financially unviable.
A balanced scorecard which measures important indicators, such as workforce availability, financial contribution and patient experience, could be used to highlight where the network is sustainable and where there is need for consolidation. This will also indicate if the network as a whole is healthy enough to support further scaling up.
Regulators and providers alike stressed the importance of financial sustainability and its effect on quality and brand. Understanding the market, income flows and relationships with commissioners were also found to be critical to expansion.
There is a clear need to evidence the financial value of networks, for which reliable data is needed. Difficulty in obtaining specific site-level data was a consistent challenge among network providers. This reflects a wider issue around data collection in the NHS.
Evidence would strengthen the argument for networked care as an option for the sustainability of services.
The financial risk associated with expanding networked care will vary depending on the model used. The research included talking to network providers using a range of different models and analysing the perceived financial impact.
All networks explored have mainly directly-contracted services:
- Network model 1 (see table 1 below) appears to carry the most risk when expanding as it is resource intensive, employing the staff, buying the equipment and paying to use the space. Any new site should be profitable or at least cost neutral given the potential impact on the financial performance of the entire network. Understanding the cost implications of each site within the network is essential as new sites requiring significant capital investment may not make a return in the short to medium term. Having a clear network strategy aligned to corporate objectives is critical.
- Single specialties in wider organisations delivering care, such as in model 4, appear to have limited financial risk. It is unlikely this model would have a major impact on overall trust finances. Expansion of this network model would depend on both commissioners and the trust executive team having a good understanding of the service and how expansion of the network fits with the wider trust strategy. This could be a challenge.
- The level of risk in models 2 and 3 varied and seems to depend on clear and agreed SLAs. From the perspective of the host provider, the full financial implications of moving the service into the network should be considered and understood. Through carefully agreed SLAs and understanding of the impact, both organisations should be able to share benefits, including financial ones.
Finally, it is worth considering the function and purpose that networked sites provide, as this can affect the scale which can be achieved. Some providers have made the most of commercial opportunities internationally. The additional effort and resources needed to set up and maintain a site so far away, although difficult, are seen as worthwhile if it provides income into the NHS.
- Increasing critical mass may be crucial to network sustainability.
- Evidence to determine the ideal size of a network is needed; this can be obtained through regular network reviews that monitor key performance indicators.
- Reliable and accurate data is crucial in evidencing the financial value of networks and their sustainability.
- Commercial opportunities can provide increased revenue to help sustain NHS services.
- The level of financial risk varies depending on the network model, some of which can be mitigated through the use of clear SLAs.