Mind the Caps - a dive into NHS Rate caps
Leading on from my last post, I take a deep dive into the impact of the Monitor and TDA (NHS Improvement) Prices Caps for all agency staffing in the NHS.
April Caps
All Trusts are now meant to be complying with the April caps, and reporting to NHS Improvement any breaches to these rules. They have, very kindly, put a break-glass buffer in there where Trusts can escalated these rates on extreme patient safety grounds.
This is not just for Doctors and Nurses, but for all agency workers on temporary contracts across the board, including anyone running their own PSCs, LLPs and self-employed sole traders. From July this will then be extended to cover a capped pay rate (so agencies cannot attract candidates using that… question – is this anticompetitive in itself? Interested to know your thoughts on this!) and then from November they are insisting that the approved framework providers retender their offerings to be set at rate cap. (I’ve already talked about the legal procurement basis for enforcing these rates at a supplier level - https://www.dhirubhai.net/pulse/feather-price-caps-verity-smith?trk=prof-post ) It seems they’re attempting to do something about it.
Whilst the driver for this seems noble, attracting more people to work in the NHS substantively, the impact is disastrous. The NHS are being hold to ransom by not only the agencies, but increasingly by the workers themselves, patient safety is being compromised, quality of agency staffing falling, and brain-drain from the back-office professional categories.
The winners following this instruction are undoubtedly the off-framework agencies, who are sitting still and reaping the benefits of agency staff not wanting to accept lower wages. It’s been reported recently that one such agency has upped their charge rates by 100% as they believe the NHS cannot live without them!
Can’t NHS Improvement Do Something About It?
The problem is, NHS Improvement aren’t seeing the real picture. Nearly 100% of the Trusts spoken to in recent months have admitted to not actually knowing the true level of incompliance in their respective Trusts, and putting in “best guess” figures which they (on a personal level) know do not reflect the actual trust picture. There is also a general ‘we’re doing fine’ attitude in the NHS which is not helping, when there are clearly many Trusts struggling who feel that have to keep up with the neighbours.
If they can’t see the truth how can they know whether this is truly working?
Stand Firm : Stand United
However, there ARE some Trusts who are doing well with managing this, and gaining compliance – this is generally in more built up areas where geography, travel and accommodation are not so much of an issue, and in places where local Trusts have formed joint-working groups to attack the problem head on in a collaborative way.
One of the past issues has very much been a lack of knowledge and a lack of communication between Trusts, and this is slowly being recognised addressed and can be seen as a positive output of the rules.
However, this work in itself needs staffing, and with HR, Finance and Procurement teams stretched enough, and with a lack of understanding in all of these areas, this is difficult to manage. Procurement are now finding themselves drawn into spend areas in the NHS where they have had little-to-no involvement in the past - this is a positive thing as there is real impact to be made in all areas of Professional Services spend. Joint-working groups are popping up all over the place, with procurement and supplier management being the crux of the outcomes deliverable.
Foundation Trust Status?#
There is also further consideration due on the Foundation Trust constitution, too, which allows Trusts to step away from central ‘rules’ such as this and make their own decisions – however I’ve not yet heard of a Trust yet who has decided to do this, and NHS Improvement are holding the Sustainability Fund money at ransom if NHS Trusts do not comply!
Lets Work Together!
As an outcome of this post, and the work I personally have been doing with Trusts struggling with the impacts of these changes, I would be really interested to hear your views and experiences with this and to enable a frank and open discussion below.
?? Procurement Partner - Delivering Value for Healthcare, Public Bodies & Private Businesses??
7 年There are varying degrees of success all over the NHS, if you consider the exercise in its simplest form, an exercise in reducing agency spend, it has had a positive impact on all in terms of rate reduction and successes to reduce costs. At times the approach is a bit of a sledgehammer to crack a nut and there's a certain political line to tow which can inhibit a level of transparency that would be beneficial. I think an occasional pat on the back with respect to the significant progress the NHS has made would go a long way too. To a degree, market pressures will denote what you can immediately achieve strategically, but accountability is essential ... E.g. a trust with a starting point of large scale last minute/off framework usage will need a different approach to one with historic controls and centralisation. A one cap to rule them all approach is always going to be difficult in a market starting in such a fragmented place. I've found that Trusts working together has proven successful (not perfect) in a number of regions with the valued support of many framework suppliers so I guess we all strive to continue to put our best foot forward and achieve the next phase in controls
The agency rules & caps, both charge & pay, simply provide strict guidelines with penalties associated to prevent poor performing Trusts from accessing further funding - sorry to state the obvious but I must establish that point first. Essentially the NHSi/HMRC business plan is going extremely well with I'd say circa 2 years left to run until the landscape has changed in its entirety. April 2017 & the introduction of 3rd party debt transfer to ensure that healthcare contractors who sit inside IR35 are paid into their PSC business bank account less PAYE/EmpNI is another massive ball breaker for the agency world. Traditionally Employers NI formed a key part of the agency gross margin, very soon that is no longer the case, the agency world must hand this money to the HMRC. Umm VAT mitigation schemes taken up by the NHS and private companies have pissed off the treasury who need VAT. This is the NHS (public sector) actually taking away from the treasury, but the sleeping giants have awoken and its time for pain within the contractor world. The caps have set in but I would say circa 50% success with another 2 years to work their way through. Many firms to crash out, many new innovative firms to come, watch this space!
Director of Operations
8 年Interesting observations Verity. As you know, information is the key to this. Most Trusts can't see their own usage data quickly and easily. As a nurse, I can say that the best quality care is given by a workforce made up of substantive workers supporting their own vacancies through bank. Agencies should be used for last minute crisis situations as a key matter of strategy. I was at the NT deputies conference over the last two days, and it was great to hear the workforce planning that is being implemented along side the agency controls that the regulators are helping with. I have seen in real time, bank fill increasing against a decrease in agency fill for the first time in years. Yes it remains aspirational that this project has long term success, but it is working for now. The key to making this a success is for Trusts to hold the line. Collaborate, and work together. The benefits are not only financial, but care quality, and professional. Love the NHS return to the bank!
Helping Sales and Recruitment business owners grow their business with data
8 年Hi Verity, From what I've seen the majority of trust's seem to feel that they are alone in having to break glass and increase their charge rates. They are often not realising that every time they do this...a worker at a different hospital receives a call and cancels a shift to come and work at their trust for the increased rate...causing the other hospital to have to break glass at short notice and creating a kind of chain reaction. We are seeing hospitals strictly enforce the April rate caps and then only authorise an increase at the absolute last minute...sending all of their requirements straight to a very expensive off framework agency and some of them have actually increased their overall spend since April began. TNA Medical have always supported the caps, the rates had previously spiraled out of control and something had to be done to bring them back in line.. however these April rates were always risky and the level of non-compliance across the board is making them impossible for workers to accept. The pay difference is just too high. I'd be interested to discuss further if you have any insights or thoughts from a different perspective.
Consultant
8 年Whilst I cannot comment on other staffing groups on the Doctors side my observation is that off framework has been a no go area for quite some time now, even before the cap. ????