Nurse Led Clinics – 5 Finance Factors

Nurse led Clinic

Nurse led clinics have the potential to be a ‘win – win’ for everyone involved. Patients get more targeted care, nurses get more job satisfaction and hospital trusts get more value for money.


Like many things in life though, the devil is in the detail.

Some nurse led clinics have a transformative effect, but others can end up costing a lot of money.

So in this week’s blog I’m looking at the five finance factors to consider when NHS accountants get involved in setting up a nurse led clinic.

What, then, constitutes a nurse led clinic?

Generally it’s where nurses assume their own patient caseloads, provide health education to patients, provide psychological support, monitor patient conditions and perform nursing interventions.

What actually goes on in these clinics can vary widely, but the key commonalities are ‘autonomy’ and a defined caseload of patients.

In the UK, advanced nursing practice has developed since the 1980s in response to two main factors:

Firstly there has been an increase in health needs and cost, influenced by both demographics and advances in health policy.

Secondly the “new deal for junior doctors”, which was a government response to the European Community directive to reduced junior doctors’ hours of work, put more focus onto nursing care.

Some clinical areas naturally lend themselves to nurse-led care, particularly chronic chronic conditions such as diabetes, COPD and musculoskeletal disorders. In fact treatment guidelines in rheumatoid arthritis actually specify the role of nurses in managing the disease.

NHS finance professionals have a big part to play in setting these clinics up and then managing their performance.

Over the last twelve years, working in hospital trusts across the UK, we’ve identified 5 key financial factors that need to be considered before plunging in:

  1. Clinical need must be established. Why is the clinic being set up? Financial and other benefits can best be articulated in a business case. The more preparation at this stage, the less heartache later.

This business case should include identifying the typical cohort of patients that the clinic will treat.

  1. Next a suitable location needs to be found. What facilities will be required? Will it be convenient for patients? Are there any issues over the rent or lease if the clinic is operating away from a hospital site?
  1. Then a decision needs to be made on how the performance of the clinic will be measured. What metrics will be tracked, both financial and non financial? This should include an awareness that performance will increase over time as the clinic beds in.
  1. Perhaps crucially from a finance perspective, will the cost of patient activity be covered by the income available under PBR?
  1. Finally, as with any new service, there needs to be a communication plan so that referring professionals know the clinic exists. This includes both other teams around the hospital and external stakeholders such as GPs and other health professionals.

That’s our list.

I’d be really interested to hear if anyone reading had their own experiences of setting up these clinics, so do drop me a line if you’ve got an opinion on it.

Thanks for reading.

6 Strategies to Reduce the Costs Associated With Your Medical Equipment

6 strategies to reduce the costs associated with your medical equipment

Since the dawn of the NHS back in 1948 our basic offering has remained the same – healthcare free at the point of consumption – but the equipment we use to provide healthcare has changed beyond all recognition.

There isn’t an acute trust that wouldn’t grind to a halt immediately if you took away their medical equipment, no matter how good their doctors and nurses are.

So, when’s the right time to mothball (or list on Ebay?!) your existing medical equipment and buy some new stuff instead?

Working up and down the country we’ve seen NHS finance departments react to this challenge across the full spectrum, from sticking their heads in the sand all the way to active engagement with clinical and procurement colleagues.

The technical way to do it is to perform a medical technology assessment (MTA), looking at safety, performance and impact on clinical and non-clinical outcomes. This can be time consuming though, especially for a resource strapped finance team.

What’s the answer then?

Working with trusts over the last 12 years the most effective assessments we’ve seen, in terms of use of time and resources, have 6 commonalities:

1). User Training

How much will it cost you to retrain your clinical and nursing staff to use new equipment? Can these costs be built into the purchase price when negotiating with suppliers? Can these costs be split with other local providers who are procuring the same equipment?

2). Compliance with regulatory guidance

New regulatory guidance can sometimes lead to forced obsolescence of equipment. You may be able to put in place work-around solutions in order to mitigate against this, but you should have a risk register in place ranking equipment and the associated levels of liability associated with them.

3). Patient Safety

Is your trust using equipment that could potentially fail? Are you keeping an eye on whether other trusts are experiencing incidents with specific pieces of equipment?

4). Continuing Reliability

Are you beginning to experience difficulties in sourcing spare parts or accessories? Is your legacy equipment providing a lower standard of care than could be expected by patients? Is the time it takes to service or repair equipment impacting on patient care?

5). Cost Of Repairs

Are you monitoring repair expenses to check whether they justify the replacement of a piece of equipment? There are classes of equipment that are cheap to buy, but expensive to repair or service. Sometimes replacement is actually cheaper than repair.

6). Notification of End-of-Life

Has the equipment’s manufacturer issued an end-of-life notice? Even reliable equipment will be adversely affected by this. This is another area that should be under regular review.

NHS Capital spending is currently coming under intense pressure as trusts look to convert monies into revenue spending in an attempt to balance their books. A thorough assessment of medical equipment will lead to more effective spending and therefore increased value for money.

20 Ways To Bend The NHS Cost Curve

Assista Briefing Note 79

Healthcare spending continues to increase year on year, but as we all know, there is also a requirement from the DH to do more with less. Getting additional income is on one side of this coin, but cost containment is on the other. So how do we bend the cost curve downwards?

CIP is the main way to do this and it’s a good discipline for us to have an annual efficiency target, but there is another way to look at the control of costs…

THE big challenge

I believe looking at waste is THE next big challenge for NHS finance professionals and their clinical colleagues.

International studies have estimated that as much as 30% of all healthcare spending is essentially waste, being either unnecessary or inappropriate spending. A frightening figure indeed.

However, this estimate is based on publicly and non-publicly funded healthcare systems and wastage in the NHS is likely to be much less than, say, in US healthcare where physician costs and insurance company profits can be eye-watering.

 Types of wastage

There are commonalities in wastage though and in a 2009 white paper Thomson Reuters broke these down into 6 categories:

  • Administrative system inefficiencies
  • Provider inefficiency and error
  • Lack of care coordination
  • Unwarranted use
  • Preventable conditions and avoidable care
  • Fraud and abuse

An American healthcare consultancy, McManis Consulting, analysed these down further into ‘25 factors having the greatest impact on healthcare costs’. Some of these factors are not applicable to the NHS so I’ve not included them here, but the 20 listed out in the table below are worthy of consideration:

Inertia & resistance to change


Poor quality of care


Uneven access to care

Movement of costs

Unrealistic expectations of patients

High levels of staffing

Capital investment in estate

Complexity and high overheads

End-of-life processes

Advances in medical technology

Slow application of clinical IT

Lack of care coordination

Fragmentation of care

Management of outpatient costs

Inconsistent management of patients with chronic conditions

Medical malpractice

Aging of the population

Inappropriate and unnecessary care


McManis then went further and tried to identify major initiatives that could be put in place to address these factors. Again, many of these initiatives concern the US healthcare system, but there are some learning points for the NHS (in no particular order):

1. Focus on the management of people suffering from chronic diseases and also cohorts of people who are likely to become chronically ill.

There’s a degree of prevention involved in this, but also more effort needs to be put into encouraging patients to adhere to clinical guidelines and thus effectively manage their conditions.

2. Reduce administration costs

This is a tricky one because the NHS is a complex system and clearly there needs to be a degree of administration, but anyone who’s spent any time in an NHS back office function (finance, HR etc.) knows there’s loads of stuff being recorded for no reason, stuff recorded on paper and so on and so on. Every time any of us carries out a repetitive task we should be asking ourselves, how could I automate this?

 3. Expect more from the patients

People don’t end up in hospital by mistake. There’s always a reason they come and mostly that reason is in their control. Obesity and smoking are 2 of the biggest challenges we face. It’s our job to educate people to help themselves.

4. Improving end of life care

For most people, the NHS spends the most amount of money on them at the end of their life. Finance departments should be examining the make-up of this spend. There must be ways it can be provided more effectively.

Lessons From America

Briefing Note 75

It’s widely recognised that healthcare needs to change in order to drive efficiency through the system.

This is not a problem that’s specific to the UK – it’s something that health systems across the globe are having to tackle.

Here’s 5 new approaches that I picked up whilst reading some recent articles from the USA.

  1. Be more like Columbo.

If patients are regularly getting re-admitted with conditions like chronic obstructive pulmonary disease (COPD) why not spend some time interviewing them so you can better understand the factors that are causing these patients to return?

Many of the factors will be controllable by the patient if they’re given the right guidance and support.

  1. Get the Board involved.

Any widescale change needs support from top management. For change to be really effective though this means ‘boots on the ground’ – your Board members need to be out and about around the hopsital putting change in place.

It’s not enough to mention things at Board meetings. Their involvement needs to be tangible to staff and patients.

  1. Patients looking after other patients.

At the Boston Medical Centre expectant mothers share their pre-natal appointments with other expectant mothers in a programme named ‘Centring Pregnancy’. There is contact with doctors and midwives, but the highlight for these patients is the peer-to-peer interaction.

Boston Medical Centre president, Maureen Bisognano, identifies the example of two women counselling another woman about how to manage pain during childbirth.

  1. Make health fun.

Look around your hospital at all the leaflets you have explaining this or that condition. Are they fun? Do they get people’s attention and hold their interest? I bet they don’t.

There’s a Canadian doctor called Mike Evans who does these amazing whiteboard style cartoons on a whole variety of health topics. Check out his channel on YouTube –

This is the way to get people interested in their own health and so keep them out of hospital. 

  1. Me and my shadow.

At the Magee-Womens Hospital in Pittsburgh they shadow their patients during a specific health event (an operation for instance) in order to identify opportunities for improvement in process. Typically a member of staff, a student or a volunteer will stay with the patient as they make their way around the hospital.

One incredible result of shadowing was the introduction of valet parking for surgery patients after it became apparent that problems with finding a parking space were delaying operating theatre start times.

If you’ve got any examples from your Trust that you’d like to share email us at [email protected] and we’ll feature them in a future Briefing Note.

Pricing Opportunities For Commissioners

Briefing Note 74

Alongside the new provider models identified in the Five Year Forward View, Monitor have recently signalled reforms to the NHS payment system and identified several payment approaches that will be developed with the NHS to support the implementation of the new care models by 2020. Monitor also propose reforms to the information building blocks which underpin the payment system over the next five years. This all presents some exciting opportunities for CCGs to commission care pathways in ways not previously possible.

Commissioners have been using the national tariff or national currencies for acute care services and mental health services for many years, and have developed local pricing solutions where there are gaps in the national tariff. However, for other services – particularly community and primary care services – this is not as straight forward, with problems in defining commissioning currencies and gaps in robust data to support the commissioning process. Increasing use of integrated care models and personal health budgets will also need to be supported by robust pricing mechanisms which balance financial risks for both commissioners and providers, and do not hinder the development or delivery of innovative care models.

For integrated care models, Monitor propose a formula based capitation based system, covering as much of health and social care funding as possible. Previous use of capitation payment systems have resulted in perverse incentives for providers, such as shifting costs to other providers, and do not appropriately address the management of financial risks. To make new versions of capitation approaches work, they will need to be linked to quality and outcome measures, and supported by an appropriate contract structure such as the prime contractor model with alignment between financial and clinical accountability.

In reviewing Monitors proposals and the test cases it is clear that the proposals for capitation payments are far more comprehensive than those used previously in the NHS, with risk adjustments, quality standards and a mix of financial and non-financial incentives all factoring with more robust contracting processes and innovative commissioning models to support more integration and coordination of health and social service delivery models.

In developing capitation pricing, there are a number of things that commissioners will need to consider:

  1. Patient cohort to be included – could easily be linked to GP registers, however advice is for cohorts to be at 5,000 as an absolute minimum to reduce financial risks.
  2. Budgets to be included within the capitation price – there are rules to follow in setting the capitation price, particularly if it includes services covered by the national tariff. NHS England commissioned primary care services cannot currently be included within capitation budgets. Local Authority funded social services also cannot currently be included, but this may change as pooled budget arrangements (e.g. Better Care Fund) develop.
  3. Financial planning risk mitigations – these should be agreed upfront with the provider, e.g. where a patient incurs much higher treatment costs than expected. Also arrangements for any financial loss or gain as a result of activity or cost changes
  4. Contractual arrangements, including provider-to-provider payment mechanisms, existing contractual commitments, and also new contract terms. Longer contract terms will help to manage some of the risks of capitation models.
  5. Quality and outcomes incentives – Need to have a balanced financial / non financial incentive package
  6. Information systems and dataset availability, both for initial baseline setting and for performance reporting, benchmarking and pricing realignment. Whilst this is readily available for acute and mental health services based upon nationally determined currencies, there are challenges in accessing meaningful community services and primary care data to support activity based costing and monitoring.
  7. Governance structures, particularly where budgets are pooled across health and social care, and where decision boards may include potential providers.

Development and implementation of new models of care can take time. Time invested in robust planning and stakeholder engagement will pay dividends to the success of the service delivery change, making sure that the patient benefits are delivered and that accountabilities and risks between the commissioners and providers are fully understood and managed. The opportunities for CCGs to use different tariff models such as capitation will help remove some of the financial barriers to commissioning clinical pathways or services, and provide a more meaningful way of funding patient care and managing financial risks.

The Power of Benefits Realisation

Briefing Note 73

As we travel to different clients around the country we see lots of time an effort being put into detailed project plans and business cases. Then we have conversations and read in the press that Project A didn’t deliver X, and that in some cases we failed to evaluate whether a completed project was a good one or delivered the intended outcomes.

All project plans and business cases should contain a robust and clear benefits realisation plan. This is the tool against which to measure the project’s achievements and in our experience it is the often overlooked at the end of the project. It is good practice for a full and final benefits realisation report to be issued on projects, post completion, but in many cases this fails to happen. Why is this? In reality it is because staff move on to the next task. This is understandable, but in this briefing note I want to show you why it’s important to stop and reflect.

It should be noted that a benefits realisation plan is not solely about £’s and activity. It is much wider than that and could include increased access to services, reaching out to wider sections of the community, impact on energy and the environment, workforce etc. It could be a lengthy list for some projects, or contain just a few items, but it is important we measure the total impact of the change/investment and that it can be demonstrated by value for money tests.

The issue tends to be that a project goes live, has some normalisation issues to be ironed out, and is then streamlined. Having a formal process that evaluates the benefits at 3 or 6 months of going live really will show the reader the true value of the project. For some projects we would go as far as to say the benefits realisation reports should be received at a formal committee and the combinations of such reports makes writing the annual report a lot easier.

So, what should a benefits realisation plan include?

  • It should make a record of the desired benefits. You may want to discuss this with stakeholders to identify those that will be affected by each proposed benefit.
  • Identify the outcomes and enablers within the project required for each benefit realisation.
  • Determine how you will measure whether a particular benefit has been realised. Ideally, try taking a baseline measure before the project starts, and use this as a benchmark to determine realisation of the anticipated benefit.
  • Allocate responsibility for delivery of these benefits and prioritise the benefits so that the most important always has the most focus. This ensures that the project makes the greatest impact.
  • Be SMART (Specific, Measureable, Achievable, Realistic and Time bound) in setting the benefit expectations and timelines.

Having created and updated the benefits realisation plan throughout the project you should review it at agreed points. This helps you decide whether the project is still delivering the original desired benefits. If not, you may wish to consider corrective action. It is vital that a final benefits realisation report is written post project completion and shared as appropriate. In many ways it shows the project’s impact and value. The benefits realisation report should not something that sits on the shelf to collecting dust!

What are the key advantages of seeing through the benefits realisations process?

  • Being clear on the total benefits a project achieves, not just the £’s, but its wider impact.
  • It will show where the £’s have been met (or not) and can be used as an aid to budget setting.
  • Where desired outcomes are not achieved it gives you the opportunity to review and understand what didn’t happen, and learn lessons for the future.
  • Or alternatively, if you over-achieve you can sell the success,
  • Seeing the benefits achieved could be an enabler of change for other projects and help identify future CIPs

It’s likely you will have projects on the go at the moment, some small and some big, some pivotal to the delivery of CIPs and service redesign. At the next meeting why not ask about the benefits realisation plan? If your project does not have one, ask yourself why. It’s such a no brainer!

What Every NHS DOF Ought to Know About Mergers

Briefing Note 70

In the private sector big companies take mergers and acquisitions very seriously, bringing in specialists to look at every aspect of the process. Clearly DOFs in NHS Trusts and FTs don’t have the same resources to call upon, but there are some rules of thumb that it’s worth bearing in mind if you’re considering joining up with another NHS organisation.

1). Why are you doing it?

We all know examples of NHS bodies that merged simply because they could, resulting in a destabilized and demoralized workforce going forwards. Trust boards need to identify why they want to merge – what is going to make the whole more than the parts? Establishing baselines is also important – where will you draw the line in terms of risks and costs?

2). What due diligence will you do?

In the private sector due diligence focuses on financial results, future prospects and competition. For NHS organisations there are probably seven main areas to consider – financial results, commissioner contracts, assets (both physical and intellectual), PFIs, borrowing, on-going issues and key staff.

3). Are you asking enough questions?

Don’t take information at face value. You need to dig into issues and examine them properly to get a real picture of the other organization. In practice this will often mean getting on site and actually speaking with their team. Don’t be afraid to go down the organizational structure if the detailed answer you require resides at a lower level.

4). Too much information?

You will receive a torrent of information as you attempt a merger, but where should your focus lie? Use your questioning in point 3 above to guide you. If the other side is unable to answer your questions satisfactorily you’ve got to consider walking away or else wringing more concessions out of the DH.

5). Think of a number

Sometimes the urge to actually get the merger done means the financial figures can get lost. Make sure you focus in on income, expenditure and working capital in your target organisation. As DOF you’ve got to immediately bring any issues to the attention of both the execs and the non execs.

6). Stakeholders

Stakeholder relationships can make or break the chances of a merger succeeding. In particular you should investigate the target organisation’s commissioners. What proportion of income is non-recurring? Are there services currently being provided that commissioners want to move to another provider? On a more positive note is there activity that commissioners are looking to re-patriate into the target organization? In a wider context, are there any political considerations you need to take into account?

7). Are there any showstoppers?

Identify any major issues quickly. Is there anything that’s going to prevent the merger going ahead? For example, Bournemouth and Poole’s merger was halted due to intervention by an external regulator. Could this happen to you? Seeking external help with this may be cost effective in the long run. Your employees will not have the same exposure to or experience of issues and may not spot the potential showstoppers that external advisors see regularly.

8). Getting it together

In the private sector it’s reckoned that fifty percent of all mergers/acquisitions fall short of increasing shareholder value. In order to tackle this it’s best to identify integration issues early on, as you’re conducting your due diligence. Have you established a post merger plan? In particular have you made the hard decisions that need to be made about organisational structure? This should be done as soon as possible in order to keep disruption to a minimum and also to re-establish business as usual.

Effective Departmental Quality Checking

Assista Briefing Note 78 - Preview Pic

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Effective Departmental Quality Checking – Is your Finance Department the answer?

Our MD, James Wilson, outlines ways the finance department’s policies can be implemented in a clinical environment.

Quality checks, performance reviews & scrutinised report writing is something that’s second nature to most employees in finance departments across the country. Within the NHS we have long been used to it. What you may be surprised to hear (or not) is there’s a large amount of research weaving its way from the U.S stipulating that finance departments, within hospitals, should be commended and emulated by other departments.

When looking at what can be done to improve the quality-implementation challenges facing the NHS in 2016 one of the primary concerns should be employing the best, most effective ways to roll out new procedures and plans, relating to both quality and care.

Consider the NHS organisation you work for and reflect on these questions. Which department has the best track record in meeting targets? Which department is honest and efficient with their goal setting? Looking to the leaders of departments, which team does the best at holding the management accountable? Which department has the most influence in the whole organisation? Finally, look back on previous quality control implementations and think about the department that most successfully absorbed new processes and policies into its daily work routine.

If you find yourself answering ‘The Finance Department’ to these questions, you’re probably not alone. Detailed research from the US has revealed that when leaders in quality and safety programmes within hospitals tested the productivity and success rates when emulating the finance department’s hard wired processes and tactics, the results were astonishing and showed massive rates of success.

Aspects of successful finance departments, which we all recognise, include: management accountability (for quality performance) and managing with data. By applying strategies such as these, the test studies showed huge improvements in execution, and removing barriers to implementation of new, important strategies. These improvements where not just incremental, but statistically substantial shifts in performance.

Take a look at the Finance Departments rule book:

  • Recording of financial performance – any department within a health care organisation should be able to report on quality or safety performance to the standard to which the Finance Department is expected to. As the Finance Department is expected to report on the accounts of every department in the organisation, clinical leaders should report on the quality aspect of every service line. For example, using something that is typical in a cost-accounting system such as medication records will indicate whether your clinical colleagues are using evidence-based medicine, and the complication rates should indicate the amount of optimal care given to their patients.
  • Partnering – don’t allow clinicians to try and perform or guess calculations. Unless they’re trained in finance, frankly, nobody should give credit to their numbers. Partner up with a clinical colleague. This may sound ambitious at first, but creating a model that can calculate the savings generated by the quality reform, in addition gaining support from your financial colleagues, including management at CFO/DoF level, will go along way to building confidence in the initiative’s savings.
  • Equate your chief quality officer to your CFO/DoF – Imagine a finance department without a DoF – an unlikely and daunting proposition. Logically, if we expect a certain level of management to take care of our financial services, the equivalent accountability should be applied to a member of management who looks after safety, performance improvement, patient satisfaction and so on. Each sector requires a certain level of expertise and supervision.

The methods that you use, as finance professionals, are exactly the techniques and insights your clinical colleagues can learn from when attempting to implement a highly effective quality programme. Offering to join forces and open up a productive dialogue between two teams can create a great basis for shared knowledge.

Where Are Your Extreme Cost Outliers?

Briefing Note 69

Since Monitor introduced the concept of SLR/PLICS in 2007 the principles around costing have become well embedded in most NHS finance departments. We’ve worked with Trusts all over the country and everyone gets it, but very few costing teams have considered the quick wins that are involved in identifying extreme cost outliers.

The most effective way to get started is to focus on a specific medical condition or care pathway. There are a couple of different ways of looking at this – you could for instance start with a high volume, high cost HRG or you may want to look at a chronic condition.

As you start this project the other dimension you’ll want to consider is the level of clinical engagement you’re going to need in order to make your findings useful. This being the case you’ll probably want to start with a department that’s receptive to using costing in this way.

The last key resource is getting hold of someone in the information department with good IT skills – to effectively look at outliers you’re going to need to review clinical, financial and quality (in terms of health outcomes) data. Bear in mind though with this type of advanced costing work you, as an accountant, are just a facilitator – it’s up to your clinical colleagues to analyse the clinical and quality data.

There are four stages involved in identifying outliers, their cost drivers and putting place systematic improvements.

Stage one: construct a care map

A care map is a visual representation of a patient’s episode of care, including all clinical activities. This may span several months and include several specialties. It’s important to create the care map at a high level and thus let clinical and finance colleagues have visibility of the full cycle of care, not just the individual activities that are generally the focus of most lean or CIP schemes.

The care map is used as an analytical framework to bring together your clinical, financial and quality data so that you can monitor care delivery. This then encourages multi disciplinary discussions on how care is delivered.

It should start with the current standard of care and identify the major components of care and key decision points for the episode.


Stage two: associate relevant data

The components of care will have financial, clinical and quality data associated with them. When you put these datasets together you can then monitor delivery of care and therefore identify outliers and areas for improvement. A word of caution though – don’t overload your care map. Limit data to what is essential to identifying outliers.

Clinical decision making is informed by patient characteristics and the clinical data should provide insight into this.   A surgical HRG for instance will include data points such as comorbidities, possibly patient demographics and diagnostic results. You don’t need the patient’s complete records; you just need to focus on a small number of critical items that inform clinical decision making and therefore outcomes.

Financial data will come from your ledger and your SLR/PLICS costing software, but remember to limit the scope of it to understanding the component of care.

Quality data will encompass a wide spectrum of process metrics and other quality assurance information.

In bringing together quality data with finance and clinical data Trusts can assess the impact of quality improvement efforts.

Stage three: spotting your outliers and deciding what to do with them

Actually spotting your outliers is easier than deciding what to do with them. It’s at this point that clinical colleagues become invaluable in identifying the reasons for disparities.

There is a job to be done here in terms of presentation of this data in clinical terms in order to drive engagement. Rather than presenting data in pound note terms, a more effective approach is to describe how things impact on patient care. For example, the extra minutes in an operating theatre that could have been allocated to another patient.

Dimensions of the care map:

Component-of-care analysis

A lot of outliers may be identifiable from the total charges generated, but looking at the individual components of care will indicate why a patient is an outlier and suggest ways to prevent future instances.

Patient-level analysis

Once a patient is badged as an outlier the work should concentrate on the patient’s medical care in order to establish if action is needed.

Programme-level analysis

To analyse care delivery for the whole episode of care, all the data should be pulled together at the programme level. You can then assess the impact of your decision making in one component of care on the whole episode.

Stage four: Monitor care delivery and programme improvement

As you analyse the data and identify outliers your clinical colleagues must begin to address the underlying issues. This may require new procedures or difficult discussions with other clinical colleagues. Key data extracted and presented in the correct way will help them do this.

Your job as an accountant is to facility your clinical colleagues as they come to understand the financial implication of their clinical decision-making.

Theatre Profitability

Briefing Note 68

The quest for efficiency began earnest when Sir David Nicholson announced he wanted the NHS to make £20 billion worth of savings by 2015. At first, many NHS finance departments, thought how are we going to do that? But if you’re like me and you enjoy thinking of new innovative ways to tackle challenges you might have thought, how can I improve efficiency in theatres? With some American healthcare commentators estimating that operating theatres are responsible for driving up to 67% of hospital revenue there are many ways in which efficiency savings can be engineered within this department. So here are my 6 KEY POINTS TO IMPROVE THEATRE PROFITABILITY in your NHS finance department:

Theatre Utilisation

Theatre Utilisation is the highest-level metric to measure theatre efficiency. It works by making DOFs consider the performance of their theatres and then making a judgement on when further analysis is necessary.

The main two measures of utilisation are:

  • Actual Utilisation
  • Theatre Turnover Time

Actual Utilisation, which measures the number of minutes a patient is in the operating theatre, is the most useful method as it can be used the same way in every Trust. Yet many DOFs often get Theatre Utilisation wrong, by calculating how well the physical location is utilised. Instead, to gain more accurate data, the calculation should be how well STAFFED theatres are.

Unique Morning Starts

Unique Morning Starts are the measure of the number of surgical starts in a theatre business day. By identifying Unique Morning Starts, the figure acts as a substitution for the ACTUAL number of anesthetising and nursing locations, in use, during the day. Usually, this measure is more accurate than the planned staff number which tends to be exaggerated. Nonetheless, analysis of Unique Morning Starts can often discover cases where staff locations are not in use, resulting in significant staff cost savings.

Block Utilisation

Block scheduling is used in many hospitals. However, problems can arise when not enough cases are booked to fill all of the surgeon’s time. To reduce this, each surgeon’s block utilisation should be recorded on a regular basis by measuring actual theatre time divided by allocated block time. This provides the required data to create block-utilisation rules. Fundamentally, if properly monitored, block utilisation can calculate the proper use and allocation of valuable block time.

Day-of-Surgery Delays

Across the country, surgery delays cost hospitals SIGNIFICANT AMOUNTS OF MONEY and ultimately adds to POOR THEATRE UTILISATION. For DOFs, the immediate challenge is to understand how predominant delays are in their theatres. Delays are quite often caused by the late arrivals of surgeons, which is a problem that can be difficult to discuss. However, in many cases, delays such as lack of proper surgical equipment can be reduced or, more importantly, entirely prevented. To address day-of-surgery delays the total number of delays and the root causes should be assessed. Root causes can be often be chased by engaging with theatre nursing staff. However, to reduce the cause of the delays, the trust should implement significant changes, such as more available surgical equipment, to considerably decrease the root causes.

Day-of-Surgery Cancellations

Often, day-of-surgery cancellations are caused by extreme medical issues that prevent the surgery from taking place. However, similar to day-of-surgery delays cancellations can be prevented. Comparable to delays, the total number of day-surgery-cancellations should be tracked along with an analysis of the root causes. Once again the root causes of cancellations can be determined by engaging with theatre nursing staff and changes should be made in order to reduce cancellations and additional costs.

Percentage of Add-Ons

Add-ons are the cases that, for numerous reasons, are fitted into the schedule after the schedule has been finished. In many circumstances they are quite often added on the actual day of surgery. This can lead to disruption of theatre schedules, resulting in staff working overtime, extra incurred expenses and low staff morale. To measure an accurate account of the theatres daily, or even weekly, percentage of add-on cases a well-organised THEATRE STAFFING MATRIX should be created. This will take into account the amount of time left in the schedule for add-on cases.

CIP – Project Types

We think there are four types of initiative to deliver the CIP of which three can be described as projects:

Budget Clipping (BC) – Removal of excess or unrequired budgets by the Divisional Accountants with no project work to support whatsoever. This process is not a project as such but contributes to the CIP targets. Budget clipping only requires a project validation sheet completing to support evidence of delivery. The accountant however is validating that no corresponding overspends will be evidenced elsewhere.

Just Do It (JDI) – Simple projects that require little planning or management.

Typically projects that are worth less than £100k and will be completed within 45 days.

JDIs only require a project validation sheet completing.

Standard Improvement Projects (SIP) – Projects that are relatively straightforward but require planning and management. Typically SIP projects are worth up to £1.0M and take up to one full year. These require a set of paperwork completing.

Complex Projects (XIP) – Projects that require significant planning and management.

Typically projects that are worth more than £1.0M and run over 1 full year. These require a set of paperwork completing plus business case paperwork too.

Thanks to Ed Grimshaw

What Every NHS Finance Manager Needs to Know About Zero Based Budgeting

With Christmas now receding into the distance it’s time to start thinking about 2012/13 and how (if?) we can squeeze even more efficiencies out of NHS organisations.  The usual approach is to simply roll the budgets over and then pester operational managers for CIPs, but in this week’s mail we look at another way of doing things…

Background to Zero Based Budgeting

Unlike the ‘roll over’ budgeting process that many Trusts currently employ Zero Based Budgeting (ZBB) starts with no costs factored into plans for next year.  Therefore, all spending needs to be justified. This focuses attention on the actual resources required to support the work to be done rather than a percentage increase compared to the previous year.

It is essential that this process is a joint partnership involving the budget holder, the “customers” of the service, and finance. There needs to be clear support for the use of Zero Based Budgeting from the Board and Senior Management of the Trust.  Other key requirements are strategies and plans to manage the potential concerns of staff that may arise as a result of changes in resource usage.

Recommended Process

It is generally accepted practice that an initial pilot of a few discrete areas within an organisation should be undertaken. The Overhead and Indirect functions are those most suited to ZBB. It should be introduced in phases concentrating firstly on the less complex areas in order to build skills and experience. ZBB is most appropriate for activities that are truly discretionary.

The strategic objectives of the function should to be clearly defined – firstly levels of service to meet basic statutory requirements should be determined, then what is the Current Service Level. It needs a flexible approach which considers the relationship of service delivery by step changes.

After this the resources required to fulfil the objectives of the function at various service levels can be evaluated. This provides a ranking of benefits and costs which can then be used to decide the level of funding for the function.

Plans should be made for the management of the surplus resources which will arise from the radical reductions in some of the functions. Resistance to the ZBB process can often be mitigated by staff knowing that they can be redeployed and retrained.

Advantages of ZBB

  • Zero Based Budgeting questions accepted beliefs, bringing a focus on value for money.
  • It clearly establishes links between budgets and the combination of objectives and services.
  • It is a partnership process involving operational mangers both as budget holders and “customer” of a function.
  • It is an adaptive approach which can be changed according to circumstances.
  • Through the partnership approach it enhances understanding, consensus and communications.

Disadvantages of ZBB

  • The process requires substantial time and effort.
  • It needs to be seen to be driven from the top of the organisation.
  • There can be difficulties in identifying performance measures and criteria.
  • ZBB can be an unsettling process for staff members and it requires careful people management.