Serving more than just the bottom line

The financial health of the NHS is rarely out of the news at the moment, and Simon Steven’s recent report confirms that this level of interest will only grow as we get nearer to the general election in May 2015. All our politicians will seek to reassure the public that our hospitals and GP services will be secure in their hands.
However, a quick view of the facts reveals that the situation is far more complex than the competing parties often allow. Demographic pressures, a growing population and the availability of new treatments and drugs are all adding to costs. At the same time, public expectations and demands are rising as well.
The UK’s management consulting firms are very alive to these challenges. Many are working to relieve the pressure of rising costs, or to help trusts and others to manage demand effectively. They are able, often, to help introduce changes that both improve patient care and the use of valuable resources.
One area where Management Consultancies Association (MCA) members have made a real impact in recent times is in helping hospital trusts and others on the front line to improve their financial and people management. Sometimes, it takes an extra pair of eyes to see where the problems are, or to bring people together in support of the best solutions.
And it often requires consultants with deep financial and other skills to get to the bottom of how to put institutions on a sustainable footing for the future.

Engaging outside support when it is needed is a sign of real strength. The institutions of the NHS are entitled to draw on the best skills, insights and knowledge that is available. With the challenges facing trusts as great as ever, some of the problems can seem very difficult to disentangle due to the complexity of the task in hand. However, we can be optimistic and, critically, many of the changes that are required can be made without the need for recurrent investment.

Providing better care for less
Any trust CEO will tell you their job is to manage the inherent tension between access, quality and cost – the three card trick. However, for many trusts delivering that trick is a challenge mainly due to increasing non‑elective demand and the requirement to make recurrent savings of 4.5 per cent each year. The forecast increase in trust deficits from £400 million in 2013/14 to £800 million in 2014/15, alongside growing waiting lists and deterioration in A&E performance, confirms this challenge. However, this isn’t inevitable.  Experience shows that quality care costs less – for example it is much better for an elderly patient with a fractured hip to have their operation within 12 hours of their fall than it is to keep them in hospital for several days before operating; it is also much cheaper.  
Experience also tells us that there is a significant variation in the utilisation of resources such as operating theatres or clinic rooms. This variation exists not only between trusts but also within them. For example, it is quite common to see threefold variation in the number of patients seen by doctors in the same team during their clinics or operating lists. By identifying this variation, understanding the causes and taking steps to address it, trusts can make significant savings whilst concurrently improving access for patients. This principle also applies to differences in length of stay, day-case rates and the proportion of emergency patients managed through ambulatory care.
Furthermore, there is a vast body of evidence which shows too many patients are admitted to hospital and that they stay in hospital too long once they have been seen. The management of patients with chronic diseases such as diabetes or chronic obstructive pulmonary disease is a good example of this. These patients account for a disproportionate number of hospital admissions, most of which can be avoided through improvements in community care, primary care, social care and improved use of technology.

Talent management
Global competition for talent is a key challenge for all sectors of the economy.  Thirty years after the introduction of general management in the NHS, this is especially true in the health service. Recent data shows that over 10 per cent of trusts do not have a director of finance or a director of operations. And the average tenure of a ceo is just 15 months. Making these positions more attractive to those already working in the service and professionals in the private sector is essential if we are to avoid decline in the calibre of leadership. This challenge is even more acute when it comes to clinical managers and leaders. Good clinical leadership is essential to any well-run trust; however most clinicians view these roles as unattractive. Changing this perception is crucial.

Governance and cultural change
Achieving cultural change is just as critical to the future of the NHS as good governance. There is a growing interest in mutual ownership as a way to improve ownership and engagement. This is an interesting concept, which will undoubtedly appeal to some organisations and teams, although to succeed it must be underpinned by accurate and timely service line reports and performance data.
 Regulators, such as Monitor and the Care Quality Commission (CQC), recognise the importance of good governance and that it needs to be improved within the NHS. In the case of Monitor, the CQC and the Trust Development Authority, there is now consensus as to what governance should look like, and the features that they will be expecting when performing inspections. These new frameworks come in response to the Francis enquiry and will form a critical step in the transformation of NHS Trusts.
The challenges facing NHS Trusts remain significant. However, with the right information, an engaged workforce, strong clinical leadership, the right incentives, a culture of innovation, appropriate governance and the right support, the trust sector can thrive.

Written by Alan Leaman, ceo of the Management Consultancies Association (MCA), and Michael Allen, director in the Health Practice at EY.

Further information