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.

Why Every NHS DOF Should be Very Interested in Reference Costs

Assista Briefing Note 80 - Preview

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Why every NHS DOF should be VERY interested in Reference Costs

Reference costs have been collected by the DH since the 1997/98 financial year. Since then many refinements have been made to the collection process and over the years the quality of the data produced has significantly improved, but still they’ve ended up the Cinderella of NHS finance departments, unloved and undervalued. All that, however, is now beginning to change.

 Three Important Factors

Whether they realise it or not Trusts and FTs currently face a perfect storm, meaning no one will ever underestimate reference costs again – NHS Improvement’s forthcoming mandating of PLICS returns, PWC’s audit of 2014/15 reference costs returns and the imposition of Lord Carter’s ATC metric.

These three factors will drag NHS costing kicking and screaming out of the dark and into the glare of the NHS spotlight.

Going back in time the main purpose of reference costs was to help set prices for NHS-funded services in England, but they were also intended to support the DH’s commitment to data transparency, thus benefiting patients.

What started the new focus on costing was when the 2012 Health and Social Care Act transferred responsibility for the National Tariff Payment System in England from the DH to Monitor and NHS England. The DH continue to collect reference costs, but Monitor is now accountable for them.

Clearly it’s common sense that accurate costing should underpin everyday decision making in the NHS, but it also underpins Monitor’s ability to set efficient prices. This is reflected in Monitor’s provider license. Both trusts and FTs must submit reference cost returns that adhere to Monitor’s costing guidance. This falls into 3 main areas:

  • adherence to Monitor’s six principles of costing,
  • compliance with the Department of Health’s reference costs guidance,
  • compliance with the Healthcare Financial Management Association (HFMA) costing standards, on a ‘comply or explain’ basis.

Enter Capita

Building on their increased focus on reference costs Monitor engaged Capita to audit the 2013/14 reference cost submissions of 75 acute trusts in July 2014. These organisations equated to £23 billion of NHS expenditure. However, a somewhat mixed picture emerged with 49% of the trusts audited being found to have materially inaccurate reference cost submissions.

Building on this initial work by Capita, PWC will shortly be reporting on the 2014/15 Reference Costs Assurance Programme. It will be interesting to see if any further headway on accuracy has been made in the interim.

Not ones to ever rest on their laurels Monitor also set up the Costing Transformation Programme (CTP) with the objective of improving the quality of costing within the NHS and to move towards having a more detailed cost collection, at patient level, rather than the traditional ‘top down’ approach to costing used in reference costs.

The CTP will take several years to come into full effect across acute, community, mental health and ambulance services in England, but it’s worth noting that 128 NHS organisations used patient level costing in their 2014-15 reference costs returns. On the face of it an impressive step in the right direction.

The latest CTP timetable indicates the first year of collection by the new method will be 2018/19 for acute and ambulance service providers, 2019/20 for mental health providers and 2020/21 for community service providers.

 88% said ‘yes’…

Given our experience ‘on the ground’ this sounds like a big ask, but when Monitor consulted trusts on this last year 88% of respondents said this pace of change was achievable. Time will tell.

The final piece of the jigsaw is Lord Carter and his Adjusted Treatment Cost (ATC) metric – a new productivity and efficiency measure.

The idea here is that the ATC highlights to trusts how they vary in their costs against other trusts for a variety of outputs. The hope is that as the ATC is developed it will be used to identify both the most efficient practices and also where the greatest efficiency opportunities lie. But the ATC is based on reference costs and only 51% of trusts have got materially accurate returns. So whilst it’s a good idea in principle it’s going to take a lot of work in NHS finance departments across the country to get the underlying data right.

Hopefully then, given the factors above, there is a virtuous circle starting to form around costing in the NHS – greater accuracy at patient level, an engaged regulator and a high profile secondary user of the base information.

 David Ginola

All well and good, but this needs to be set in the context of the everyday reality. A bit like David Ginola at Newcastle United too often costing has been the luxury player in NHS finance departments. Whilst there are undoubtedly some shining beacons out there many trusts have just a single costing practitioner, sometimes even less. This is not enough resource for the task in hand.

The present economic outlook and political sentiment points towards a continued focus on efficiency and therefore costing, but if the potential gains are going to be achieved more investment in this vital area needs to be made sooner rather than later.

Done the right way reference costs can have a massive beneficial impact on the performance of NHS finance departments.   If you’d like help improving yours, do get in touch. We’d be delighted to help.

6 Ways To Enhance Patient Safety


Assista Briefing Note 77 Preview Pic

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Unfortunately, it’s a fact of life that human beings don’t function as well at night as we do through the day. There’s a wealth of evidence to back this up. Obviously, there’s no getting around the night shift in the NHS, but there are some things we can do to increase productivity, improve the working environment and minimise errors.

  1. Rely on Each Other

Nowhere is team work more important than on the night shift. Try to create an environment where employees, in particular nurses, are encouraged to voice their opinion if they see something that could be a potential error. By building a system that ensures everybody is responsible for double checking things e.g. medication doses, and therefor sharing the accountability, workers will feel grateful when somebody stops and questions them, rather than feeling affronted.

  1. Break the Routine

Look into new, innovative research surrounding shift patterns. Studies show that the most valuable, replenishing sleep happens between the hours of 9pm and 3am. Shift models that emphasise this importance are being tested and implemented across the U.S right now.

Look into the benefits of reducing the typical 12 hour shift to 8 hours, ensuring workers have more time for rest during the ideal sleeping hours. Compensate night shift workers in a tangible way – pay these shifts higher, enable them to work less yet receive equal pay. Consider rotating shifts forward (morning – evening – night) to correspond with natural circadian rhythms.

  1. Take a Break.

The benefits of taking breaks are now understood and well documented. However, the notion of a ‘tea/coffee’ break is becoming outmoded by more effective methods of relaxing. For example, during shifts, napping and exercise are great ways to refresh and increase the release of endorphins. Hospitals should reflect on the paybacks of providing fitness rooms or sleeping quarters for their staff.

  1. Food for Thought

The fuel that night shift workers put into their body should be seriously considered. For ease and to combat hunger, carb rich foods seems like the best option, however these cause lethargy and sluggishness about an hour after consumption. It’s not ideal to have integral members of your staff relying on vending machines. Offer foods that are high in protein – meats, cheeses and olives. If keeping the cafeteria open all night stretches budgets constraints too much, having cold foods prepared, such as the examples above, during the day and having a cafeteria worker distribute through the night could be a solution to consider.

  1. Utilise Real-Time Pharmacists.

If your most active clinical units are A&E or the intensive care unit, try appointing a dedicated space for pharmacists where they can review dosages and be of assistance with regards to medication questions. Despite some areas of hospitals having fewer patients at night, the intensity to which patients require attention are usually increased. This could cause a rise in the need to quickly administer medication – having someone readily available for specific advice would be of great value.

  1. Gifting Goes a Long Way

Finally, recognition of the impact working unsociable hours has on an employee can go a long way to improve the general moral. Try sending regular e-mails with tips and advice on the best way to combat tiredness and cope with a night shift – especially to juniors. Consider night shift packs, including things like ear plugs, sleep masks, de-caffeinated drinks and fruit, which are inexpensive to provide but will been seen as a token of appreciation.