Where to look: making savings in the NHS

NHS Improvementhas been active in recent months helping trusts identify more than £50 million inpotential savings through the Financial Improvement Programme (FIP).So where do we suggest you look when you think you have already tried everything,including down the back of the sofa,and found nothing?

Now that the FIP has completed its first phase, we can reveal the top ten places you should check to help find the savings and cost improvements that can make a difference. Thesehigh value interventions have emerged from the financial turnaround work carried out by the trusts on the programmeworking closely with external consultants.

Lessons learntfrom the first phase

Sixteen trusts were selected to be part of the FIP programme designed to support trusts to deliver in-year savings and improvement to their finances and to meet their control totals.The first phase concluded in late summer. It included a rapid review of how good the trusts involved were at finding and delivering better ways of working and cost savings across their organisations.

Improvement teams have worked closely alongside trust staff to help change things in practical ways on a day to day basis. Thegood news is thattheyfound a wide range of areas that people in the NHS could focus on to help them deliver savings. They have also found better ways for trusts to find and report savings. Together this makes a strong foundation to build on in the future.

Many of the opportunities identified dovetail with the recommendationsfrom the Lord Carter report on unwarranted variation in operational productivity within acute trusts. The report found there was potential for trusts to realise at least £5bn of efficiencies by 2020-21 from the £55bn they spend each year. Fifteen recommendations set out how productivity improvements and efficiencies could be made across a range of areas in hospitals including workforce, medicines, procurement, diagnostics, estates and facilities and back office costs.

The largest areas of savings found so far within the FIPinvolve the trusts finding better ways to use existing facilities. For example, theatres can be used more productivelyif trusts find ways of communicating more effectively with patients to reduce cancellation levels and ‘do not attend’ rates. There were also significant opportunities for savings in hospitals’procurement processes. Theseincluded: using a smaller variety of types of the same product, seeking volume or other price discounts from suppliers, and making sure everyone who buys products uses the standard product list.

Our ‘top ten’opportunities by value broadly split into two areas: ‘actions that can be quickly delivered’ and longer term ‘different ways of working and service transformation’.Many of these seem obvious but that doesn’t mean they are being addressed everywhere in the NHS – you might want to make a start by checking whether these are being done in your own trust.

Use a

We asked external improvement teams to coach trust staff and ensure they were left with useful tools once the FIP ended. Tools have included trackers to keep an eye on vacancy and headcount levels, as well as templates to help forecast cash balances and likely requirements more accurately. Structures have also been put in place to monitor cash flow and vacancy control. Group workshops and one-on-one training sessions have helped make sure trust staff feel confident carrying on what they've learned.

Further success in finding savings will rely onimprovement teams and trust teams passing on new and better ways of working,as well as continuing to find areas to improve and make savings.Trust leaders will have to demonstratethey have an improvement mindset by ensuring thatfinancial and service improvementgo hand-in-handas an everyday part of the way staff go about their business.

Next steps

Four or five months after FIP launched, the majority of trusts are now in the second, delivery phase. NHS Improvement will share the lessons learned and good practice emerging from this new phase across the NHS, through events and sector forums.We are confident that the FIP can help protect patient care while delivering savings so both patients and taxpayers benefit.

Author

David Hill

Financial Improvement Programme Director