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Elective Recovery Fund: Feasible or Flawed?

Last month, HSJ released an article highlighting that NHS England is returning to payment by results (PbR) despite strong opposition from some of the service’s largest trusts.

Amounting to £3 billion, the new Elective Recovery Fund (ERF) is available to each Integrated Care Board (ICB) and aims to achieve 107% of 2019-20 baseline activity by delivering system-wide specific activity targets.

Essentially, money is available for high performance.

What does this mean for elective care?

 

National elective care objectives set out in the 2023/24 priorities and operational planning guidance are to:

• Eliminate waits of over 65 weeks for elective care by March 2024 (except where patients choose to wait longer or in specific specialties)
• Deliver the system-specific activity target (agreed upon through the operational planning process)

 

To achieve these targets, each Trust, within each ICB will need to:

• Reduce OPFU activity by 25% against the 2019/20 baseline by March 2024
• Increase productivity and meet the 85% day case and 85% theatre utilisation expectations, using GIRFT and moving procedures to the most appropriate settings
• Offer meaningful choice at the point of referral and at subsequent points in the pathway, and use alternative providers if people have been waiting a long time for treatment

 

As part of these targets, ICBs and Trusts must set out the activity, workforce, financial plans and transformation goals to support the delivery of these objectives and achieve approximately 30% more elective activity by 2024/25 than before the pandemic.

NHS England will allocate £3bn of ERF to ICBs and regional commissioners and continue to work with systems and providers to maximise the impact of the three-year capital Targeted Investment Fund established in 2022.

 

Trust concerns

 

The funding available to the ICBs is based on achieving activity targets; if one Trust underperforms, they get less money, while the Trust that overperforms gets more money – is this an intentional way to encourage productivity?

Although Trusts have agreed to these targets, there are still understandably, many concerns over the ERF, believing it to be an unfair and stressful way to work. Taking money away from the lower-performing Trusts may seem counterintuitive, however, the need to treat patients safely, quickly and efficiently should take precedence.

Another concern is the variable element of the funding, which will fund all elective ordinary and day cases, such as outpatient procedures, outpatient first attendances, chemotherapy, and unbundled diagnostic imaging.

 

“Trusts are nervous about the variable element as it raises significant financial risks for underperforming the targets. It used to be that they lost a proportion of the tariff but now it’s 100%. So, if they lack confidence in meeting the targets that they have agreed with their ICBs, then anxieties will likely abound. That said, if they can do more, well the money follows the patients, so optimizing the surgical engine brings great reward ” Brian Wells, Founder, Four Eyes Insight.

 

Only time will tell if the ERF stimulates performance. It has good intentions of encouraging productivity and early signs are promising.