John Matheson & Stephen Gallagher Quality Driven Financial Performance Scottish Government

1. John Matheson & Stephen Gallagher Quality Driven Financial Performance Scottish Government

2. NHSScotland Event SCENE Horizon Scan 1 Economic Overview 2 Quality and Efficiency 3 Current Perspective

3. NHSScotland Event • Economic Overview

4. Total Managed Expenditure vs Current Receipts

5. Public Sector net borrowing

6. Two-Speed Recovery Two-Speed Recovery

7. International GDP Growth - Update

8. SCENE ‘On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity’ Adam Smith

9. % Annual Real Growth Rate in Scottish DEL Budgets • IFS predictions – Dec 2009 • Reflects current use of EYF

10. Estimated Scottish Government DEL Expenditure – June 2010 Budget Results (2010/11 Prices) £39

11. UK Comprehensive Spending Review 2010 Scottish Government DEL Settlement 2011-12 to 2014-15

13. NHSScotland Event Efficiency is a dimension Quality. It can be safer care, more timely and can offer better patient experience.

14. Quality & Efficiency – Two sides of the coin “To improve the overall quality and efficiency of NHSScotland while ensuring good value for money and achieving financial targets.”

15. Case study: NHS Tayside Older Peoples Services • Project established to realise significant improvements, both qualitative and financial. By focusing on the patient and removing waste, NHS Tayside is delivering: • Reduced inappropriate admissions, • Reduced length of stay through focus on patient goal setting and partnership working (from 27 to 18 days), • Lower readmissions by shifting the balance of care, • Capacity and capability in staff to proactively manage and support more effective and efficient patient pathways, and • Potential to save £1.4m p.a. in net savings from service reconfiguration.

16. Case study: NHS Borders Enhanced Recovery • Enhanced Recovery focuses on improving patient outcomes and speeding up a patient’s recovery after surgery. NHS Borders has successfully adopted and implemented this model of care for patients receiving planned major orthopaedic operations, resulting in a reduction in the length of stay in hospital for patients from an average of 7.7 days to a new average of 3.5 days. • This reduction not only represents a long-term productive opportunity for NHS Borders but also provides improved patient outcomes by reducing variability, decreasing the risk of infection, and ensuring that patients are active participants in their own recovery process.

17. We have a record of achievement…. NHS Scotland’s Health Boards delivered £262m of local efficiency savings in 2010/11, equivalent to 3.1% of baseline funding made available to NHS Boards. This exceeded the minimum level of savings required by £61m and made it the third year in a row that NHS Boards have exceeded their efficiency targets

18. NHS Scotland Productivity • No. of inpatient & day cases has increased every year since 2002/03 (1.41m in 2010/11) • No. of WTE has increased at similar rate but decreased last year • Number of staffed acute beds has reduced every year since 2006/07 (2009/10 average 17,099 beds); day case surgery up by 4.6% over the same period • ALOS for emergency inpatients from 4.2 days (06/07) to 3.7 days (09/10)

19. NHS Scotland Performance • Scotland has lowest median waiting time for 7 of 11 procedures (UK Health Stats comparisons) • Scotland has lowest 90th percentile waiting time for 7 of 11 procedures • 99.9% patients waiting 12 weeks or less for 1st outpatient consultation • 99.6% of patients waited 6 weeks or less for key diagnostic tests • HAI – Since 2007, c.diff cases reduced by 73% • HAI - Since 2007, MRSA bacteraemias reduced by 61%

20. 1 2 3 4 Scottish Patient Safety Programme 23% increase in surgical briefings 72% reduction in critical care c.diff 14% increase in ward hand hygiene 58% decrease in ward c.diff 15% increase in on-time antibiotics`

21. Efficiency and Productivity Framework How? Support – supporting our workforce through engagement, partnership and placing quality at the centre. Cost reductions – using the data to identifypotential based on variability of care Enablers – identifying, testing sharing and sustaining good practice. Focussed Approach: Work-streams identified and links made to QAB and Delivery Groups Portfolio Board established to identify priority projects Return on Investment Collective approach to implementation of what works. “To improve the overall quality and efficiency of NHSScotland while ensuring good value for money and achieving financial targets.”

22. Work-streams: Reducing Variation, Waste and Harm • Primary Care & Community • Patient Flow & Acute Services • Workforce Productivity • Evidence Based Care • Prescribing, Procurement & • Shared Services • Service Redesign & Innovation Service Redesign

23. Three Phases of Activity • Estimate Potentials based on variability • Meaningful comparison • Understanding blend of productivity, cash efficiency • Building the quality as well as efficiency case for redesign 2. Agree Priorities • Best practice actions • Case studies • Pilot/Project based activity with clear ROI • Agree what support required to deliver to scale 3. Benefits realisation and reporting, challenge to adopt, re-examine potential

24. Emerging portfolio 2011/12

25. What seems to make a difference? • Strong CEO leadership • Clear Organisational Narrative linking Quality, Efficiency and Productivity • Good use of information to identify opportunities and drive improvement • Dedicated and rigorous Project Management • Clinical Leadership and Engagement • Clear system rules/norms (based on quality) and aligning incentives/sanctions • Delegated budgetary responsibility and bottom up idea generation • Directors focus on delivery of critical projects • Ownership of benefits realisation (quality and efficiency) across organisation • Agile, targeted improvement support to realise benefits within portfolio

26. Targeted Improvement – Case Study: NHS Lothian • Clear link to strategic objectives • Clear articulation of the place of continuous improvement in delivering significant quality and efficiency gains for the organisation • Evidence of triangulation in organisation between operational management, finance and improvement/modernisation teams • Table outlining projects, link to E&P themes, quality and capability benefits and the efficiency and productivity benefits

27. NHSScotland Event • Current Perspective

28. SCENE Five Year Perspective • Development of Strategic Narrative detailing Five Year Vision • Recognition of challenges facing NHSScotland • State of Scotland’s Health • Demographic Profile • Challenge of UK Finances • UK Barnett Consequentials will be passed on to NHS • Service change to be described in the context of quality improvement • Different service delivery approaches required at a local, regional and national level

29. SCENE Health Manifesto Commitments • Delivery on Manifesto Commitments – Low in number • Alcohol Minimum Pricing Policy • Health and Social Care Integration • Family Nurse Partnerships • Early Detection of Cancer • Further Investment in Dementia Services • Ring-fenced Support for Carers

30. SCENE Spending Review • Identify and Prioritise the spending policies which: • maximise economic recovery and increase sustainable economic growth • protect services for the most vulnerable • prioritise the most effective preventative spend • deliver actions to meet statutory targets on reducing greenhouse gas emissions

31. SCENE Spending Review • Exploring scope for • further integration; • new funding mechanisms; • reducing duplication; and • reflecting on the key messages from the Christie Commission.

32. SCENE Spending Review • Specific focus on the following areas:- • Support for Business • Assets & Infrastructure • Offending & Community Safety • Delivering Services in Rural Areas • Work to reduce carbon emissions • Early Years • Post-16 Education • Employability • Adult and Social Care

33. SCENE Spending Review • Timetable • two months shorter than normal • Cabinet meeting 28th July • further Cabinet discussion 9th / 23rd / 30th August • Cabinet final sign-off 6th September • Spending Review and Draft Budget Announcement 21st September

34. SCENE Implications for Leaders (1) • The evidence base for what improves quality is clearer than for what reduces costs • The two agendas are related and leaders must connect them • Taking a broad and balanced approach to quality may improve clinical engagement • Increasing reliability and reducing variation matters • Have to do this with people and not to them

35. SCENE Implications for Leaders (2) • Greater efficiency alone won’t be sufficient • Needs both short term and long term approaches (low hanging fruit and culture shift required) • A requirement not a choice to connect quality and cost given what we know about demography and demand.

36. SCENE “We look to Scotland for all our ideas of civilisation” Voltaire (1694-1778)