Spring In-Brief 2019 - Flipbook - Page 3
Model function over model form
Mark Hindle talks about the evolving landscape of efficiency
The NHS has typically been required to deliver cost
improvement plans (CIPs) to try to improve efficiency.
These are nationally mandated savings to balance the
income needed to run organisations and deliver services.
Recently, NHS Providers reported that 40% of trusts are
failing to meet their financial targets, resulting in a multibillion-pound deficit. My experience as a board member
tells me that this meant that true transformation to
improve quality and reduce cost was often sacrificed to
deliver annual financial targets. Relatively small financial
targets occupy a large amount of Board time at the
expense of the important strategic conversations about
true sustainable services driven by high quality care.
Regulators were equally complicit in this “race to the
bottom” by demanding short-term balance at the expense
of longer-term real change based on collaboration; now
the central premise of the Long-Term Plan. It does,
however, seem that many NHS providers have run out of
road in delivering CIPs in traditional ways. Many
organisations have focussed on cutting services, which
sometimes reduces head count in an incremental “death
by a thousand cuts” way. There are examples of services
that have been at risk of being unsafe as a result of this
practice; many of these examples are rated as
“inadequate” by the Care Quality Commission.
Procurement standardisation is also an area which has
long since been mined for efficiency. There are, however,
still huge discrepancies in what providers spend on
products to support the delivery of care and it has proved
virtually impossible for the NHS to get on top of this
agenda.
The NHS is a collection of hundreds of statutory bodies
all buying or acting in relative isolation. Regulators and
commissioners have encouraged them to think and act
like they are all in competition with each other and the
fundamental commissioning “mantra” has all been about
tendering, contracts and competition. Consequently,
there is little evidence that collaboration is working and
providers often struggle to work together to share
buildings, services, supply-chain and expertise.
Another common strategy to redress the ‘outgoing
financial tide’ has been for organisations to consider
mergers to reduce corporate costs, increase delivery
efficiency and save costs. Some mergers have proved to
be successful, whilst others have seemingly created
many more problems than they have resolved; some, as
we know, have failed altogether. Mergers have all
ultimately, underpinned a preoccupation with
organisational form, boundaries and sovereignty.
The case for change
The Department of Health and Social Care have longsince expressed concerns about the NHS failing to get to
grips with spending and in 2015 Jeremy Hunt asked Lord
Carter to look at NHS efficiency and how to increase
productivity and reduce cost by standardising practice.
Examples of what Lord Carter found included:
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Average running costs for a hospital vary from £105 to
£970 per square metre.
Hip replacement costs vary from £788 to £1590.
Sickness rates vary from 3.5% to 10%.
Simple tools such as electronic rostering were not
being used consistently if at all.
Lord Carter made a range of recommendations, such as:
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Paper rostering should cease.
Unused floor space should be no more than 2.5%.
Non-clinical floor space should not exceed 35%.
Delayed transfers of care should be eliminated.
In no uncertain terms, providers will have to get a grip of
how they use and deploy their resources. To help them do
this NHS Improvement have developed Model Hospital a
sophisticated set of data, benchmarks and tools to help
trusts run their services efficiently. This tool collates trusts’
own information into one place and benchmarks this
against peers. It is intended to allow hospitals to ask
themselves the questions about what they are spending on
non-clinical services and any hospital can get access to
this data by going on the NHS Improvement website.
Using Model Hospital
Model Hospital is not just about cost saving. The most
sophisticated providers will use the information to
understand if they are investing enough in governance
structures to reduce incidents and harm and so reach the
holy grail of improved quality and reduced cost.
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