Ensuring better care and increased efficiency are two sides of the same coin
Episode four of Hospital series two explores how staff at Imperial College Healthcare NHS Trust are developing new models of care and pushing the boundaries of what's possible technologically, while also making efficiency savings across the board. Here, chief financial officer Richard Alexander explains why these are two sides of the same coin.
BBC Two’s Hospital series has provided a real insight to the complexity of the challenges and dilemmas facing NHS organisations like ours – as well as the great care and innovation. It’s looked at many different aspects of our work and a range of issues. But one constant throughout has been the demand on our ‘resources’, whether they be human, physical or financial – staff, beds, theatres, or money.
The reality is that there will always be a limit to our resources, while patient needs will always increase, and better diagnostics and treatments will continue to be developed. In order to solve that very tricky problem, we have to continually develop new approaches, determine what has most impact and make them work as efficiently as possible. There has been a lot of work in the NHS over recent years to compare performance across trusts and to learn from one another. Increasingly, we are also working jointly with patients, GPs and other partners to find the best solutions.
Often, better care is less expensive, not more. No one wants delayed or cancelled appointments, staying longer in hospital than is necessary, or duplicate tests. While we strive to offer the best, there are still many opportunities for improvement. We have to harness that aspiration for great care to become more efficient and reduce waste – so that we can provide even more great care.
We also have a number of particular funding challenges and opportunities, though they are reflected in other hospitals up and down the country. For NHS trusts like ours, income is based primarily on the amount and type of care we deliver. The formula is a complex one, with payments – from local (clinical commissioning groups) or national (NHS England) commissioners – for specific procedures or treatments based on national averages.
We are a provider of specialist services, with a major teaching and research focus. We do receive additional funding for these activities but it doesn’t necessarily cover the costs of treating patients with more specialist conditions who are referred to us due to our track record in innovation. We also have a particular challenge with our estate – much of it, especially at St Mary’s, is very old and has been developed in a piecemeal fashion. As well as costing more in building maintenance, this also means we can’t always implement the most efficient ways of organising and running services.
On the plus side, having world-renowned clinicians and being based in central London, we can bring in more income than many others through our private healthcare division – all of which is reinvested in the trust and helps fund our NHS services. We also attract investment from innovation and clinical trials.
The upshot is that we are regrettably running at a deficit, currently. We are forecasting a year-end position of a £41 million overspend on a total spend of just over £1 billion. This is taking into account planned savings of £54 million plus an increase in the number of patients treated and the quality of our care. Last year, despite also delivering £54 million of savings, we were in the same position. However, the wider NHS system was able to accept and afford that deficit; this year, it cannot and we are under great pressure to find further savings.
To get to an agreed position, as part of what the whole NHS can afford, we need to find a further £23 million of savings this year. Ultimately, we have to plot a route to sustainably achieving at least a small surplus every year, so that we can replenish our infrastructure and, importantly, ‘invest to save’ – spend on change and innovation where that will bring future savings.
Addressing our financial challenge is one of our key objectives. At the same time, our most important goal is to provide high quality care to all of our patients – which is why most of us work in the NHS in the first place. If we’re to succeed, which we must, they have to be two sides of the same coin rather than competing priorities.