A consistent theme across our survey and interviews was that, although most leaders know where efficiency gains can be made, they need support beyond their own organisation to be able to realise them. This chapter addresses the gap between what trusts need to be able to make more progress on efficiency and their current capacity.
Figure 5 demonstrates that only a fifth of respondents agreed that they had received enough support from central bodies (20%), and had the resources they needed to make progress on efficiency (19%). The majority disagreed with both these statements.
Yet some of NHS Improvement’s most high profile activity driving operational productivity has been well received. Respondents told us that the most useful NHS Improvement’s contributions over the past three years had been data sharing and trust benchmarking exercises (such as the Model Hospital), with 77% suggesting this had been useful. More than two thirds (69%) of respondents had also found the coordination of national cost saving programmes (such as agency caps) useful in supporting efficiency savings at their trust.
From the survey and our interviews, the overarching message has emerged that sharing data on efficiency is helpful but trusts need more support to deliver.
Under the Model Hospital, NHS Improvement shows trusts how they measure against their peers on a range of cost, productivity and efficiency measures. These include spend per unit of activity within service lines, spending on routine consumables, staffing costs, medicines use, operating theatre productivity, estates costs, and so on.
One the whole, the tool largely applies to the acute sector. However, we consistently heard from community and mental health trusts that they wanted access to better benchmarking information. These trusts feel they would benefit from more comparison data to identify which areas of their organisation they should be targeting for savings. There is one note of caution from the mental health trusts: their overheads are lower than the acute sector and benchmarking on patient outcomes rather than inputs would provide much more value.
Generally, acute trusts were positive about the Model Hospital that has supported internal scrutiny and helped boards identify where gains could be made. However, trusts are also realistic that benchmarking is mainly useful in prompting questions. "It gives you a clue for where you might look – but it doesn’t provide an answer" was one typical comment. "If one out of ten findings turn out to be worth acting on, then it’s a good thing", was another.
Under the Model Hospital, NHS Improvement shows trusts how they measure against their peers on a range of cost, productivity and efficiency measures.
However, some variation can be explained by the differences in how trusts cost bases are accounted for. The Model Hospital does not yet account for the fact that overhead costs are apportioned to different departments in different ways from one trust to another. The tool will not be wholly reliable unless this data is recorded comparably by all providers.
Likewise, in the ambulance sector, trusts record activity data differently. For example, some trusts will include hoax calls or repeat calls in some activity indicators, while others will not. This makes it difficult to compare trusts on the proportion of calls that lead to patients being treated. The implementation of the new ambulance quality indicators have gone some way in addressing this, but there is a period of bedding before data is truly comparable.
Another important caveat is that, while unnecessary high costs or low productivity should be identified and tackled, there will always be some variation between providers – any savings projections associated with reducing variation must be based on a realistic projection for the difference between the worst and the best, and not assume that everywhere will be as good as the current top performers.
Providers with experience of the Model Hospital were keen to point out that the data it uses is not perfect, and sometimes throws up misleading results. For example, one acute trust explained its workforce costs skewed unfavourably because it employs some staff on behalf of other organisations – and then had to defend itself when questioned by NHS Improvement.
It should also be noted that not all variation is "unwarranted". An example that two trusts gave was the price of food. Both spent more than the average on food for their patients – both had had this highlighted to them via the Model Hospital. Both acknowledged the higher spend, and said they would continue to spend more on food because they believed it complimented the medical and nursing elements of patient care and supported patients’ recovery.
The Model Hospital does not yet account for the fact that overhead costs are apportioned to different departments in different ways from one trust to another. The tool will not be wholly reliable unless this data is recorded comparably by all providers.
The support offer
While benchmarking is seen as broadly a good thing, trusts would like more support to act on the data. Specifically, trusts felt that NHS Improvement was putting a lot of effort and resource into analysing questionable data, however, they would also welcome more support to make improvements as trusts do not always have the capacity to make large scale change happen quickly. Within the cap set out in Lord Carter’s 2016 report (trusts should limit administrative spending to 7% of turnover), trusts may be able to sustain normal operation but are unlikely to be able to undertake large change programmes.
One finance director told us: "Trusts know what they have to do but they do not have the capacity or resources."
Too often, we heard, NHS Improvement feels like an analytics function armed with regulatory powers to ensure compliance. We have consistently found that, in future, trusts want NHS Improvement to focus on helping trusts to improve (NHS Providers, 2018). This would require a change in behaviour at different levels within NHS Improvement, however the organisation’s collaboration with NHS England presents a key opportunity as it repositions its offer around improvement and support, and develops new regional teams.
Trusts felt that NHS Improvement was putting a lot of effort and resource into analysing questionable data, however, they would also welcome more support to make improvements as trusts do not always have the capacity to make large scale change happen quickly.
This national support should initially come in the form of including a framework within the long-term plan setting out where trusts could realise efficiencies and working with trusts to agree a stretching, yet deliverable, efficiency requirement. More ongoing and direct support could take the form of practical support for people trying to bring about improvements. Another suggestion was to identify top performers and introduce a structured programme for them to spread best practice, along the lines of the Global Digital Exemplars, where organisations that have independently made progress are matched with trusts in need of development.
Trusts would also like to spend less time producing data returns for central bodies. The more these processes can be automated, the more time trust staff can devote to making change happen within their organisations.
Figure 7 shows that more than two thirds of respondents cited short-termism encouraged by the current financial regime (69%) and operational pressures (66%) as barriers to making efficiency gains. Almost half (46%) also felt the lack of transformation funding was a barrier and 39% pointed to a lack of capital investment.
The control totals regime was introduced in 2016-17 to establish central grip over financial performance. NHS Improvement has used the provider sustainability fund (formerly the sustainability and transformation fund) to enforce compliance with stretching year end targets, with the aim of bringing the trust sector back into a sustainable position.
While this has not happened, the regime could be credited with a slowdown in the deterioration of the overall sector position after the rapid decline seen in 2015-16.
However, trusts tell us it is failing to incentivise system efficiencies, which they say present the greatest opportunity, and instead encourages potentially unhelpful, organisation-centric behaviour such as growing profitable activity, stopping unprofitable services and arguing with commissioners over contracts. It also does nothing to encourage trusts to invest in schemes that may pay off over many years, but not immediately.
This, combined with a lack of dedicated money to fund service change, and operational pressure that diverts all management, clinical and physical capacity into hitting performance standards, has created a situation where many trusts will find it impossible to make progress on transformation.