National leaders are introducing spending measures for health economies considered to be living off bailouts.
This may result in its own NHS contracts being revised for the existing financial year.
NHS England and NHS Improvement have implemented this process in order to curb spending.
The focus will be particularly on the combined financial performance providers and commissioners within a particular health economy achieve.
It has been decided by the authorities that consultancy firms will be commissioned in order to work within some of the regions identified by the initiative.
Several areas within the sustainability and transformation programme have already been targeted in relation to overspending.
While most contracts for the 2017/18 financial year have been finalised, there have been warnings over unrealistic efficiency assumptions built into some of the deals.
Financial gulfs have resulted from this, and there are currently no feasible savings plans in place to address this difficulty.
The new process is targeted at health economies that “cannot produce plans which fit within the available financial envelope”, or where the agreed plans are “highly unlikely to be deliverable” due to unrealistic efficiency expectations.
Local organisations will be forced to consider how spending will be broken down for charitable donations in their area, while the whole process will be “underpinned by contract mechanisms that materially de-risk the delivery of plans”.
The healthcare authorities also offered further details on how the process will be delivered.
“Where the resulting envelopes between organisations (after taking account of the provider control total and sustainability and transformation funding) differ from the agreed contract values, these will need to be reviewed to re-cut the spend profile to fit within the revised envelope. Certainty of expenditure control may also require the form of the contract to be revised.”
Meanwhile, local leaders have been asked to ensure “growth is set at reasonable but not excessive levels, that any discretionary investments have been stripped out and efficiency savings are set at an appropriate (ie: challenging but achievable) level.”
This effort is partly a response to the record levels of deficit that have been accumulated by NHS organisations over the last couple of financial years.
Indeed, the sustainability and transformation programme itself is an attempt to ensure that the NHS effectively balances its books.