Financial Improvement Programmes - increasing the chances of success

Since the “Nicholson Challenge” to secure £20bn of savings was announced in 2010, NHS Trusts have been familiar with the annual drive to achieve cost efficiencies. This onus will not abate, despite the announcement of a long-term funding settlement for the NHS and the hopes invested in Integrated Care Systems as vehicles for delivering transformation.

Establishing the rules of engagement 

Repetition and prevarication are two of the most frustrating characteristics of financial improvement programmes. Avoiding undoubtedly challenging yet often purely political or administrative questions delays initiation of meaningful transformation and, ultimately, costs money. Examples include:

  • Should capacity enabled by planned efficiencies be utilised to increase patient activity or to drive cost savings?
  • How is productivity internally attributed when it is derived from cross-cutting initiatives, such as inpatient flow, diagnostic services or pharmaceutical spend?
  • Is funding available for transformational projects? Is there an escalation route when genuinely radical change is inhibited by its absence?

These questions can be quickly answered with clear leadership and early engagement of the right teams, establishing a programme with clarity of purpose and momentum from the outset.

Ambitious pragmatism

We all know that sustainable, meaningful change takes time. The points of delivery of greatest activity in acute Trusts – inpatient wards, outpatients and theatres – present the most significant opportunities for genuine financial improvement, but they are also complex, interrelated businesses. Short-term improvement efforts are rarely sustainable or effective, and can be actively counter-productive.

Instead, we need collective agreement to plan and invest in longer-term solutions that can address the deep-rooted, systemic and behavioural causes of the care system’s inefficiencies. The proposed multi-year contracts for Integrated Care Systems may help in this regard, but only when coupled with a genuine shift in mentality and approach. This should also accept the interrelation between transformation initiatives; that some can take place concurrently, but others may need to be sequential to release a full benefit, even if this delays implementation initially. 

Renewing the focus on innovation

Engaging the clinical workforce can sometimes feel like the holy grail of financial improvement. Not only are clinicians the most familiar with service inefficiencies, they are also the best placed to effect change and, crucially, often the most aware of the latest innovation that can inspire it. Yet, too often they see financial improvement as a threat rather than an opportunity. We need to re-frame the agenda to be one that cultivates an optimistic, entrepreneurial environment, intimately linked to the national investment in Academic Health Science Networks and NHS England’s Innovation Programme (among other initiatives), in which clinicians can pursue innovative improvement ideas. And, we should promote not only those that can make services efficient, but also those that can add income streams to the NHS. 

Just do it: delivery over theory

Modelling efficiencies that are based on benchmarking or theory can be useful in identifying opportunities, but it often consumes far too much transformational resource. The time taken to agree the assumptions within such models (leaving aside the inevitable ongoing challenge given each organisation’s unique circumstances) can pale in comparison to the time devoted to its actual delivery. 

We know that embedding change is challenging at the best of times, let alone within complex, multifaceted NHS providers. External support can be more impactful by focussing on enhancing and developing the delivery capacity and capability of operational teams, as well as the corporate functions that wrap around them, to realise and sustain known productivity opportunities.

Financial Improvement Programmes: increasing the chances of success

Since the “Nicholson Challenge” to secure £20bn of savings was announced in 2010, NHS Trusts have been familiar with the annual drive to achieve cost efficiencies. This onus will not abate, despite the announcement of a long-term funding settlement for the NHS and the hopes invested in Integrated Care Systems as vehicles for delivering transformation.

This pursuit of productivity has, counter-intuitively, not been without financial cost. Between 2010 and 2014, Trusts spent on average £1.2m each per annum on external support – predominantly from large consultancy firms – to help identify and deliver savings, at times with variable results. Leadership and front-line staff alike are fatigued with the perennial sense of déjà vu that accompanies the latest target, and attempts to galvanise a workforce confronting the daily operational pressures of care delivery. 

So how we can we develop a refreshed approach to financial improvement, one that meaningfully applies the lessons of previous experience, acknowledges the constraints within which it operates, and places a renewed focus on innovation? 

Establishing the rules of engagement 

Repetition and prevarication are two of the most frustrating characteristics of financial improvement programmes. Avoiding undoubtedly challenging yet often purely political or administrative questions delays initiation of meaningful transformation and, ultimately, costs money. Examples include:

  • Should capacity enabled by planned efficiencies be utilised to increase patient activity or to drive cost savings?
  • How is productivity internally attributed when it is derived from cross-cutting initiatives, such as inpatient flow, diagnostic services or pharmaceutical spend?
  • Is funding available for transformational projects? Is there an escalation route when genuinely radical change is inhibited by its absence?

These questions can be quickly answered with clear leadership and early engagement of the right teams, establishing a programme with clarity of purpose and momentum from the outset. 

Ambitious pragmatism

We all know that sustainable, meaningful change takes time. The points of delivery of greatest activity in acute Trusts – inpatient wards, outpatients and theatres – present the most significant opportunities for genuine financial improvement, but they are also complex, interrelated businesses. Short-term improvement efforts are rarely sustainable or effective, and can be actively counter-productive. 

Instead, we need collective agreement to plan and invest in longer-term solutions that can address the deep-rooted, systemic and behavioural causes of the care system’s inefficiencies. The proposed multi-year contracts for Integrated Care Systems may help in this regard, but only when coupled with a genuine shift in mentality and approach. This should also accept the interrelation between transformation initiatives; that some can take place concurrently, but others may need to be sequential to release a full benefit, even if this delays implementation initially.

Renewing the focus on innovation

Engaging the clinical workforce can sometimes feel like the holy grail of financial improvement. Not only are clinicians the most familiar with service inefficiencies, they are also the best placed to effect change and, crucially, often the most aware of the latest innovation that can inspire it. Yet, too often they see financial improvement as a threat rather than an opportunity. We need to re-frame the agenda to be one that cultivates an optimistic, entrepreneurial environment, intimately linked to the national investment in Academic Health Science Networks and NHS England’s Innovation Programme (among other initiatives), in which clinicians can pursue innovative improvement ideas. And, we should promote not only those that can make services efficient, but also those that can add income streams to the NHS.

Just do it: delivery over theory

Modelling efficiencies that are based on benchmarking or theory can be useful in identifying opportunities, but it often consumes far too much transformational resource. The time taken to agree the assumptions within such models (leaving aside the inevitable ongoing challenge given each organisation’s unique circumstances) can pale in comparison to the time devoted to its actual delivery.  

We know that embedding change is challenging at the best of times, let alone within complex, multifaceted NHS providers. External support can be more impactful by focussing on enhancing and developing the delivery capacity and capability of operational teams, as well as the corporate functions that wrap around them, to realise and sustain known productivity opportunities.

 

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Adam Igra Manager