Radical 10-point plan to refocus NHS estate

It is not quite the winter of discontent the media would have us believe, but many Foundation Trusts, PCTs, and future GP consortia, will have to make some very tough choices if they are to meet the (“Equity and excellence: Liberating the NHS”) White Paper system reform and cost reduction programme required by the Department of Health and the Treasury. The focus to date for many organisations, rightly, given the efficiency opportunities available, has been on headcount, and on achieving performance improvement. However in assembling the efficiency jigsaw, organisations have to make all parts, including the estate and its supply chain partners, operate on par with commercial companies to drive through lower cost, while improving outcomes. This paper outlines 10 steps which would lead to radical efficiency savings and service improvements if the NHS carried out a systematic review of its estate. We concentrate on the estate operation, and estimate that it could generate revenue savings of approximately £1.39 billion from its estate operations, and a long-term capital receipt of some £1.45 bn to £2.5 bn, with the further upside of other land and stretch targets in procurement processes. These savings could be reinvested directly into frontline services to deliver better health outcomes more efficiently.

 Step 1: Demand and capacity review

Fundamentally, every industry can benchmark its data, and look at each service, to assess and improve its performance. Previous Department of Health reports have demonstrated that, in the acute sector alone, should providers work to the median of clinical staff achieving 50-80% of potential improvement, productivity savings of between £1.5 bn and £2.4 bn could be generated. Add in non-clinical staff benchmarking, GPs’ and drug costs, and that is a further £2 bn. The NHS encompasses a total of over 395 different organisations at the time of writing, which means a big potential saving per organisation. We know of several NHS organisations that may have to find savings running into many millions of pounds. This will not happen by being an average-performing organisation. Instead such organisations will have to perform at the top 5% to 10% to enable such savings to occur. The issue is that all areas now have to benchmark; our teams carry out simulation modelling, which often leads to clinical groups making changes to operating processes. In a recent study, a decentralised ward had 80% of nursing time available for patients against 30% in a centralised ward, with the key differential factors being the impact of queuing and interruptions. This is a substantial, cost-effective, patient care opportunity in its own right.