nhs productivity: weathering the storm - siva anandaciva
DESCRIPTION
‘Cost improvement programmes – from transactional to transformational’ Cost improvement plans (CIPs) have become a semi-toxic brand in some parts of the NHS, associated with vacancy freezes, staffing reductions, non-recurrent schemes and 5% year on year budget cuts. However, in the face of an unprecedented funding challenge many NHS providers are using CIPs to get leaner not meaner, and to deliver transformational improvements in patient care.TRANSCRIPT
COST IMPROVEMENT PROGRAMMES (CIPs)
Siva Anandaciva
From transactional to transformational
Cost improvement programmes (CIPs)
Costs of delivering that
activityExpected
income for planned activity
Cost improvement programmes
Cost improvement plans
BAD NEWS• The scale of the challenge is immense
and the impact is significant
GOOD NEWS• Providers are considerably reducing
costs and improving value for money
BAD NEWS• But it won’t be enough to meet the
challenge
Unprecedented national efficiency ‘ask’
Contributing to increasing NHS provider deficits
Monitor, TDA, FTN
2012/13 actual 2013/14 plan 2013/14 actual 2014/15 estimate
591
183
-108
-450Agg
rega
te p
rovi
der
surp
lus/
defic
it (£
m)
“Before I ask my constituents to pay any more money for the NHS, I have to be able to assure them that we
are squeezing every last drop out of what they are currently giving? Can I do that today? The answer is no”
Andy Burnham, 2014
And narrative on productivity unlikely to change
Cost improvement plans
BAD NEWS• The scale of the challenge is immense
and the impact is significant
GOOD NEWS• Providers are considerably reducing
costs and improving value for money
BAD NEWS• But it won’t be enough to meet the
challenge
Have taken £billions of cost out
2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
494614
788
1200
1555 1558
Valu
e of
reve
nue
and
cost
CIP
s (£
mill
ions
)
Monitor
Largely through the classic transactional CIPs
Grant Thornton
Following the classic principles
• Board awareness and support
• Capacity and capability to deliver change
• Clinical engagement & leadership
• Frontline engagement
• ….but….say CIP to someone and it can be toxic
Impact of CIPs on
staff morale in last two
years
Grant Thornton
Cost improvement plans
BAD NEWS• The scale of the challenge is immense
and the impact is significant
GOOD NEWS• Providers are considerably reducing
costs and improving value for money
BAD NEWS• But it won’t be enough to meet the
challenge
But CIPs are decelerating
Plans under-delivered• 21% under-delivery in 2012/13• 2013/14 £1.2bn (or 3%) costs
reduced (17% less than plan)• “I have a CIPs plan for 2014/15,
but it is falling apart” (Finance Director)
Workforce• Pay action is 50-60% of total CIPs. • 2013/14 plans for 4% nursing WTE
reduction over next two years• But Francis + Keogh + CQC = £1.2
billion planned investment in staffing & 2013/14 FT workforce WTEs 16,000 higher than plan
Increase in regulatory action
8 FTs had regulatory action applied and none lifted in
2013/14
Monitor
“The point here, is when we do all these things – this is pretty well everything we can think of, within reason, that the sector might do – it doesn’t quite close that gap. And we could imagine that that gap might have to be bigger.” HSJ 2013
Googleimages
Little hope that CIPs are enough to close gap
Do things betterLean, procurement,
estates, staff productivity, low-value procedures
Chart from Monitor
Do things differently Centralise services; more urgent
care in community; self-care
Adopt international models
Aravind & Medicall
BAD NEWS• But it won’t be enough to meet the
challenge
Cost improvement plans
BAD NEWS• The scale of the challenge is immense
and the impact is significant
GOOD NEWS• Providers are considerably reducing
costs and improving value for money
GOOD NEWS• We might be able to meet a different challenge
We’ve done well, we’ve ticked boxes.
Does it feel like we’ve done well? No, it feels like we’ve salami sliced as much as we can on
the easy things and now we are left
with….what?
(NHS Finance Director, Kings Fund survey)
We need a paradigm shift
From cost to quality
From in-year to multi-year planning
From cost reduction to revenue growth
From cost reduction to value improvement
From institution to health economies
Transactional
Transformational
From cost to quality – UH Birmingham
• Prescribing information communication system (PICS)
• Decision-support IT for prescribing & recording
• Supported by root cause analysis reviews by board and clinical teams – 3 hours x 4 times a month. Most important meeting CEO does
• Reduction in lab tests ordered, late and missed doses. Quality increase & cost reduction.
• £10m and 3 years…
From in-year to multi-year – Northumbria• SLM implemented ‘to understand the
consequence of clinical actions’
• Organise into business practice units (elective, acute medicine, support, paeds). With business unit director 50% clinical, 5% business development and management
• Clinical policy group used as a forum to generate, manage and challenge CIPs.
• Approach is ‘where do we want to be in 5 years time’, not end of March. Build in cap space, but 60-70% of CIPs should be within the 5 year plan.
• Took 12 years
From cost reduction to revenue growth
From CIPs to VIPs – Coventry & Warwickshire
• Develop an outcomes measures hierarchy– Health status achieved or
retained (survival, utility)– Process of recovery (time to
recovery of normal activity)– Sustainability of health
(reoccurance of illness)
• Efficiency programmes remain but conversation has changed from – ‘what do we take out and how
do we minimise the damage?’ to – ‘what delivers best value for
patients?’
From institutions to health economies• Problems to address
– Clinical e.g. only 1/3 of hospitals have consultant ED presence 16hrs/7days
– Financial e.g. £700m provider CIPs a year by 2017/18
• ‘Do nothing’ option does not lead to financially sustainable or clinically optimal. Provider CIPs range from 4% to 8%. Some will be deliverable for institutions, but the health economy still goes bust.
• Provider-led service redesign e.g. have a smaller number of sites providing Specialist Services for the very small number of very sick patients across Greater Manchester.
• Take 30m out by 2018/19 and raise clinical standards.
• Accept there will be winners and losers. Accept the political heat. Aim high and go for transformation together rather than be pushed slowly off the financial cliff one by one.
Final thought
Stephen Dorrell MP Chair, Health Select Committee
The perfect strategy is not going to walk out of Richmond House.
So find a problem and solve it.
And ask for forgiveness not permission.
THANK YOUSivakumar Anandaciva Head of Analysis | Foundation Trust NetworkOne Birdcage Walk | London | SW1H 9JJ
DDI: 020 7304 [email protected]
Q&A