Cost Improvement Programmes

1. Cost Improvement Programmes Kate Thomson

2. Ballpark figures…. National • NHS England ~£90 billion • NHS Pathology ~£3 billion Regional/Local • Oxfordshire PCT ~£1 billion • Oxford Radcliffe Hospitals NHS trust ~£600 million • ORH Laboratory Medicine Directorate ~£27 million • ORH Genetics Laboratory £2 million

4. Operating framework for NHS 2011/12 (Published Dec 2010) • “year in which we establish the building blocks for the NHS to respond to the White Paper” • £20 Billion efficiency savings expected over 4 years (reduction in management costs and QIPP) • NHS Commissioning Board to be created in shadow form (fully operational April 2012) • Programme of pathfinder GP consortia underway • SHAs still accountable for service delivery • SHAs to ID when each of its trusts will become FTs • PCTs accountable for service delivery and commissioning until 2013, and will support development of the new commissioning system. • Some PCTs to form clusters:-oversee delivery during the transition, support emerging GP consortia and close down the old system. • National contracts come into place • Must include efficiency savings • Penalties and sanctions when terms of contracts not met • “financial framework will require NHS organisations to ensure they gain the maximum benefit when making investment decisions. Running costs will need to be reduced at every level”.

5. Sir David Nicholson-Chief Executive of the NHS in England “Only by driving up quality and productivity together can we realise the £15-20bn savings needed by 2013/14” “the Department of Health would be reviewing if the current penalties and incentives were in the right places to support these improvements."

6. ORH NHS Trust Business Plan 2010/11 • Financial Plan and Budgets • Majority of predicted income comes from contracts with commissioners(PCTs, Specialist commissioning, “Other”) • “expect real term reduction in income over next few years as commissioners implement their own plans to reduce expenditure and live within their budgets” • Set out Divisional Budgets on basis of predicted income • Cost Improvement Programme included in the Financial Plan:-

7. ORH Cost Improvement Programmes (CIPs)

8. ORH CIP workstreams

9. Review of NHS Foundation Trusts 2010-11 plans • Average CIPs of 4.4% (3% highest achieved 09/10) • “high quality planning is essential ” • Key areas of risk to CIP delivery: • Quality • Capacity and skills to deliver transformation • Long Term planning • Restructuring costs • Future risk

10. Areas for CIP in the laboratory • Procurement • General efficiency • Equipment utilisation • Productivity • Workforce cost reduction • Research Income • Private patient Income

11. Oxford Laboratory examples of CIPs 2009/10 • Introduction of new services to bring in new income • Reduce consumables budget • eg. 384 well sequencing • New costing and pricing model for contracting based on weighted reports • Workforce/process changes • Combined technical staff into one operational team • Improved efficiency • Improved utilisation of equipment • Reduction of waste

12. More ambitious ..…… • The Lean Laboratory • Workforce re-design • IT

13. Clinical responses to the DownturnRoyal College of Pathologistswww.nhsconfed.org • Focus group August 2010 arranged by NHS Confederation* • Recommendations produced to highlight where resources could be released in NHS Pathology services, while maintaining or enhancing quality. • Intelligent requesting • Workforce profiles and training • Efficiency and productivity • Openness on performance • New Developments and molecular testing • Intelligent commissioning • Information technology and disintermediation • Clinical Leadership in Pathology *The NHS Confederation is the independent membership body for the full range of organisations that make up the modern NHS.

14. Suggested Activity…… • Productivity • Disintermediation and harmonisation of tests • Workforce re-profiling • Information Technology

15. Are your CIPs QIPP or is a CIP a QIPP? • QIPP umbrella term to describe the approach the NHS is taking at local, regional and national levels to reform its operations and re-design services. • Proposed reforms assessed against four components • Quality • Innovation • Productivity • Prevention • QIPP is an attempt to avoid slash and burn cuts • Maintain focus of the Darzi report to “put quality at the heart of the NHS.” • Regional QIPP plans/workstreams in place to deliver operational and service changes and White paper reforms.

16. QIPP in Pathology (from Pathology Newsletter, DH, Autumn 2010) Quality • greater standardisation • more appropriate use of testing • innovative technologies (electronic requesting) • point of care testing Innovation • self-testing • pathology in pharmacies, community venues • high throughput genomic tests Productivity • consolidation of local services • networks, strategically located labs • procurement economies of scale • LEAN process management • workforce reform Prevention • vascular checks • infection control

17. provide service improvement and redesign expertise, including Lean and Six Sigma methodology • provide clinical and managerial expertise • support the delivery of timely access, high quality and effective patient centred diagnostic services • Support the delivery of NHS guidelines and DH policy • Work in partnership with the Department of Health Imaging and Pathology teams.

18. Useful (?) References • The QIPP initiative (England) and addressing the recession. Health Policy & Economic Research Unit, BMA.org.uk. • The Operating Framework for the NHS in England 2011/12. DOH Dec 2010. • Quality, Innovation and Pathology. Health Service Journal roundtable 16 September 2010 • Cost Improvement Achieving engagement by evolving culture. www.trainingbulletin.co.uk • Review of NHS Foundation trusts annual plans 2010-11). Monitor. • http://www.improvement.nhs.uk/diagnostics/ • Royal college of Pathologists Clinical Response to the downturn. www.nhsconfed.org