By Dr Christine Armistead and Gurminder Khaira

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The combination of significant financial challenges, growing demand for services and major workforce shortages demands a different approach if the NHS is deliver the ambitions set out in the Long Term Plan (LTP). A key priority is the need to put the NHS back onto a sustainable financial footing. This includes major reforms to the NHS’ financial architecture, payment systems and incentives, and a requirement for the NHS to deliver cash-releasing productivity growth of at least 1.1 per cent a year.1

The LTP recognises that this efficiency challenge cannot be managed by organisations in isolation and will require more collaborative working at a system level. Hence, the requirement for all organisations to form Integrated Care Systems (ICSs) and to operate system wide financial control totals. However, the complexity of aligning system stakeholders behind an efficiency programme and driving it at scale should not be underestimated. Especially, given the long history of competition in the NHS driven by the Payment by Results (PbR) regime and the continued scrutiny of individual organisation performance.

In this latest in our series of blogs exploring the challenges facing ICSs, we discuss some of the insights we have gained in working with Sustainability and Transformation Partnerships (STPs), ICSs, and individual providers as they attempt to implement large-scale efficiency and transformation programmes.

System efficiency programmes look to change the traditional commissioner Quality, Innovation, Productivity and Prevention (QIPP) and provider Cost Improvement Programmes (CIP) approach to cost improvement to one of collaboration in which system partners collectively identify, develop and deliver cost efficiency and transformation programmes.

What are the common themes to delivering system efficiency?

Through our work in supporting ICSs and STPs to develop system-wide efficiency programmes, we have identified a common set of issues and themes.

Clinical engagement and collaboration

The development of system transformation programmes should be a collaborative process between all organisations, including explicit engagement with clinicians and service managers, not just commissioning project managers. Given the many competing priorities and demands on the time of front line staff, however, we often find that projects and programmes are designed without sufficient clinical and operational involvement. As a result, there can be a lack of buy-in by the people who need to adopt the proposed changes, which invariably undermines implementation. There are a number of pragmatic ways to achieve more effective engagement, which can be tailored to local circumstances, such as using existing forums and meetings, arranging sessions outside of core hours, as well as establishing more formal engagement channels such as programme steering groups and dedicated clinical leads or champions for each programme area.

Design and delivery - capacity and capability

Often projects fail when they rely on people delivering the programme in addition to their day job. To improve the chances of success, service change leads, operational managers and dedicated project management experts need to be given dedicated time to work as part of a project delivery team, with appropriate support from cross partner business intelligence and finance teams.

Freeing up project management capacity and ensuring the individual has the tools to deliver is key to success. Consistency of approach across programmes with strong governance and tracking tools are fundamental to system wide delivery. ICSs are often constrained in capacity and, as such, need to look across the system for transformation leads (which may be currently sitting in provider or commissioner organisations). Seconding these individuals into the ICS can be an efficient way of making effective use of system wide resources.

Place versus system

In working with system efficiency programmes, there is often an ongoing debate about what activities should be delivered at place level versus the system level. For example, transforming outpatients (OP) by increasing clinic utilisation would be viewed as an ’at place delivery’, whilst introducing new technologies (such as virtual clinics, integration of wearables, real time monitoring) and agreeing a new models of OP care are better delivered at a system level. There are significant gains from agreeing an OP strategy and buying technical solutions and training staff at the system level, with place level nuancing where required.

Pace of delivery

Maintaining the pace of delivery is key to keeping engagement levels high; however pace can only be delivered with capacity and strong decision making capabilities. It is better to do a smaller number of programmes well and at pace than spreading resources too thinly and not progressing which risks losing the confidence of stakeholders.

Short versus medium/long term planning

Transformational programmes take time to plan and execute with financial impacts taking longer to realise. Quality impacts are generally realised more immediately. As a result, system wide transformational programmes are often put on the back burner in favour of programmes that will deliver more immediate financial benefits, this is a missed opportunity. It is important, therefore, that the impact of efficiency programmes and expected timings are clearly articulated, including financial and quality impacts, and that stakeholders are realistic about the length of time required to deliver transformational change. As well as transformational programmes, in year programmes that are more organisation based can help deliver short to medium term financial savings.

System leadership

Strong system leadership and governance arrangements are essential for gaining consensus for transformational programmes and ensuring that decisions can be made quickly. Individual organisations often struggle to give up autonomy, this, coupled with embryonic system leadership, creates particular challenges in effective decision-making and achieving consensus.

Cross-system, facilitated, development sessions (that enable difficult issues to be discussed) and coaching of senior leaders by other influential high profile NHS leaders, can help an ICS to develop and mature. Some of the less mature systems have had strong NHS leaders brought in to support development; others have developed system-wide organisational development initiatives. Given the many years of competitive behaviours between individual organisations, building trust is key, but takes time. It is essential, therefore, to be clear from the outset about the operating model and agree the behaviours expected of leaders across the system.

Enablers

When developing efficiency programmes it is important to remember the system enablers that may be required to avoid expected savings in one area, creating risks elsewhere. For example, demand management programmes in the traditional PbR contract created a loss of income to providers at full cost, whereas providers were more likely to take out costs at a marginal rate. Today, many systems are moving towards traditional block or Aligned Incentive Contracts (AICs) to manage such risks. The contractual and other payment reforms highlighted in the LTP2 should help programmes avoid unintended consequences and ensure that any efficiencies are a true saving to the system.

We have worked with several systems on establishing AICs that focus on shared principles and agreed working arrangements, that manage demand jointly while being clear on the risk share arrangements. This has helped increase certainty for both commissioners and providers as they move to cost-based rather than activity-based contracts. One example involved developing a block contract with an agreed risk and gain share arrangement for each transformation scheme.

Conclusion

Collaborative working and system efficiency is the direction of travel for the future sustainability of the NHS. Those ICSs who fail to remove silo-working and/or competition between providers, are unlikely to deliver the scale of efficiency savings needed or, the level of transformation required to ensure the sustainability of the NHS.

Each ICS should focus from the outset on identifying and agreeing system wide efficiency programmes as a way of bringing the different organisations together. This in turn will start to drive the wider ambitions in the LTP, specifically to improve population health and improve the delivery of healthcare for patients.

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Dr Christine Armistead - Director, Deloitte Consulting LLP

Dr Christine Armistead is a Director in Deloitte and has spent the last 17 years supporting the NHS to transform and become more efficient. She leads our Northern Health Account and many of our challenging large scale transformation programmes including, ICS efficiency programmes, commissioner transformation programmes and provider productivity programmes. Christine started her career at the Department of Health as an Economist.

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Gurminder Khaira - Director, Deloitte Health Advisory

Gurminder Khaira is a Director in our Healthcare Advisory practice and has over thirteen years public sector experience. He has extensive experience in supporting CCGs to deliver their efficiency agenda and is currently working with a number of STPs in developing financial frameworks and governance and monitoring arrangements to help deliver system wide efficiency programmes. He has worked with commissioning and provider partners to identify system transformation schemes and model the impact across both commissioner and provider organisations.

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1 https://www.longtermplan.nhs.uk/wp-content/uploads/2019/01/nhs-long-term-plan-june-2019.pdf
2 Ibid.

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