Friday, 4 April 2014

Improving quality in challenging times

I am often asked ‘why can’t you just use your surplus to make savings and protect services?’  which is a valid question I will try to answer.

The Trust's financial surplus in simple terms is there to both keep the Trust afloat (in the black not the red) and to pay for high cost projects to improve patient care (capital investment).  Our surplus each year is around £2 million and could never cover the level of efficiencies we have to make.  It is a one off sum of money (like money in a savings account), whereas the efficiencies are against spend each and every year (like reducing your outgoings at home). 

Rather than a technical explanation, I will give examples of how the surplus has benefitted staff and patients alike over many years:
  • The excellent ward improvements in Tameside and Stockport, completed in 2013, cost around £7 million, paid for from the Trust’s surplus.
  • PARIS and the roll-out of a modern information system, improving patient information and staff working practices has been funded from the Trusts surplus.
  • We enjoy high levels of maintenance and in-year improvements to our environment funded from the Trust’s surplus.
  • In the next few years we will refit/redesign/refurbish wards in Oldham, this will be funded from the surplus
Compared to 10 years ago, the majority of staff and patients now benefit from being in high quality environments. This couldn’t have been achieved without sound financial management, which is a reason why managing money well is an integral part of delivering excellent care.


Pennine Care isn’t the only Trust making savings, all NHS Trusts have to.  All Councils are having to make savings and very significant reductions in costs.  Commissioners (who buy our services on behalf of the public) are making difficult decisions on priorities in a climate of reducing investment and increasing demand. Everyone across health and social care is working with the challenge of reduced levels of funding and increasing demands for services.

This means commissioners are increasingly concerned with the value they get for each pound they spend, more so now than ever. Providers like Pennine Care, have to make our own efficiencies, under increasing scrutiny.  We have to ask, is the care we deliver the best possible within the most efficient cost envelope?

If commissioners can’t be convinced of the value and productivity of what we provide, there is every chance they will stop buying it, or buy it from someone else. There has never been a more important time than now to be able to demonstrate that what we provide is effective and good value. Commissioners are now guided to use competition to test for value and that’s why we have so much activity around tenders for services we already operate.

Focus on patients and quality

Whilst I didn’t welcome the financial crisis, I very much welcome the patient focused debate that has been generated as a consequence of economic upheaval. Every pound spent has to buy something effective and efficient, and we have to drive out any variation or inefficiency.

I heard a patient story recently, from a daughter about her mum. Mum had had more than one stroke and lived alone, she needed a lot of care to support her. It wasn’t great to hear that the disjointed care was in part delivered by Pennine Care. What was great was how we fixed it once they raised their concerns. Their concerns? Multiple practitioners and agencies going in to provide care to mum, with no one speaking to each other. Disjointed, unproductive and at times unhelpful care. That isn’t efficient or effective.

I use that as an example of where we need to make changes and improvement. I do know that we deliver excellent care more often than not and that staff are hard working. But, in the current climate can we always demonstrate that? Do we communicate it well where we do provide excellent care? I don’t think we do sufficiently.

And that’s where the new vision and strategy will come in, when it is launched this month. It will set out what we believe everyone wants in terms of excellent care, it will describe what we think success will look like, based on what staff and stakeholders have told us.

Whole system change

It’s not just our challenge either. Rob Webster, the new Chief Executive of the NHS Confederation has recently said NHS Chief Executives need to lead outside of their organisations and lead across systems. What he meant by that is that we all now have to look beyond Pennine Care, beyond our usual NHS borders, and form new partnerships to deliver better and more efficient care.

And Pennine Care’s collective challenge in all of this? As every pound spent has to be spent well, we all need to demonstrate that what we provide works and how we deliver it is good value. I’ll write more on that in the future, but that’s why I started blogging about money to acknowledge that the current climate can make things tough. But also to set out that the reality that we must ensure we deliver evidence-based care, consistently and at the most efficient cost possible.

I think the journey we are on is one of improvement and there is the real prospect of exciting change and redesign. It will be challenging but I truly believe care will improve as we work through each step together.

With two posts on money done, next time more on our vision and strategy.


Twitter: @MichaelMcCourt1

Wednesday, 2 April 2014

The bottom line

Welcome to my first blog post!

I have had positive feedback on my efforts to be as open and transparent as possible, so thank you. Both Twitter and Trust communications have been well received so far and the idea of this blog is to provide further thoughts on Trust strategy, challenges and the wider health and social care system.

It’s intended to contribute to the reader’s thoughts and views, I hope, and promote discussion and debate.  It is primarily for Trust staff, but stakeholders and interested others are also very welcome.

So, where to start?
In April we will launch the Trust’s vision and strategy. I will soon blog about that specifically. However, I’d like to take a few steps back for this first blog and talk about money.

Surely I should be talking about patient care, quality and values? Well yes, it is the reason I joined the NHS as a student nurse in 1984 and why I get up each day for work, to deliver the best care possible.  But I don’t think we can get on to that without discussing the financial context in which we work.

As a student nurse, even as a staff nurse and a ward manager, I didn’t understand where the money came from to run services. It didn’t cross my mind to think who paid my wages. We are now in different times.

Nowadays I think we all have to have an awareness of the costs of care and the restraints on funding. It has to be an integral part of our plans alongside developing the best care possible. It isn’t easy to do but we must.

There are misconceptions that the NHS budget has been spared from financial efficiencies but in reality it hasn’t.  In percentage terms we might not have had the scale of financial challenges Councils are facing, but we still have to make considerable financial efficiencies year on year.

In 2010, Sir David Nicholson set the Nicholson Challenge against a backdrop of the UK economy in upheaval. He tasked NHS leaders with finding £20 billion of savings, whilst improving quality.

Yesterday the new Chief Executive for NHS England, Simon Stevens, took his new start as a moment to speak frankly.  He said the NHS is facing its biggest sustained budget crunch in years and that success in the coming years will require "a team effort – involving the biggest team in the biggest effort the NHS has ever seen..."  which we are all a part of.

What does it mean for Pennine Care?

I’ll try to explain Pennine Care’s funding challenge as simply as possible (it’s the only way I can understand it!).

Each year we negotiate our contracts with commissioners which include quality and performance requirements, and the price they will pay for services. The price paid is the amount of money we have to run the Trust in that year, to pay wages, pay employers pension contributions and national insurance contributions, rent costs, heat buildings, transport, medicines etc...

The amount we receive this year is less than last year. This is due to a reduction of 1.5% on the prices paid by commissioners across the NHS. The commissioners are required to do this by the government (as part of the overall drive for savings in the NHS). So immediately we have less money than we had last year. We have less money to spend, but the costs are actually going up.  The cost of the 1% wage rise (admittedly only for some following the pay award) isn’t a part of our contract settlement, the Trust has to find money to cover these costs, and each year other costs increase as well. Utilities always go up, cost of medicines always go up and there are many other cost increases -  all have to be met from within that contract value, which is already 1.5% less than the year before.

Then the financial rules we are governed by (from Monitor our regulator) mean that we must generate a surplus, which means putting funds aside to pay for keeping our buildings and equipment in good order, and also to pay for large projects such as capital investment in improving wards or in our new IT systems. A small surplus also gives our commissioners, patients and staff confidence that we are strong enough financially to continue operating even if something unexpected came along. (Remember Woolworths?)

So we have to do better than just break even and the surplus we have to generate is around £2 million.

So in summary, we know the cost of providing our services is around £273 million based on the current financial year but we sign a series of contracts for 1.5% less than this because of a reduction imposed nationally, then from that reduced amount we have to pay increased costs and still generate a surplus. This leaves us short of money and the figure that amounts to is about £8 million, which has to be found through making savings across the Trust.

Is anybody still reading this? Stay with me!

So what does £8m savings mean?

Pennine Care has been successful at meeting savings targets year on year, with minimal job losses.  But it is getting more difficult to find the money.  The £8 million we need to find this year represents the equivalent cost of 218 jobs at band 6.  And that’s why I wanted to start the blog with a post on money, to explain where proposals for redesign and cases for change come from.

When members of Pennine Care's Trust Board spend time with services, there is one consistent theme staff raise, job security. I understand that and I want staff to feel as certain and secure as possible. There is inevitably change required when finding large sums of money to save, but I want to assure our staff we are working really hard to retain staff and keep redundancies to an absolute minimum. 

And that is the reason why we need to be open and transparent.  Nobody wants to be faced with the financial challenge, but it’s a reality we all must face together.  We try incredibly hard to not disrupt patient care and support staff through the changes.  We also ensure we involve staff and patients in the decisions we make.

But making financial savings is now an integral part of the world in which we work, and so unlike when I was a student nurse, we all have to be aware of it.

I’d like to acknowledge and thank staff for continuing to work so hard, so positively and delivering excellent care, despite the financial challenges we face. I continue to be impressed and proud of the enthusiasm, commitment and professional behaviour of staff.

As Chief Executive I don’t underestimate how challenging it is working in the NHS in the current economic climate. Despite these challenges I want the Trust to be a great place to work, a rewarding employer and a supportive organisation. I know that where we achieve that we get the best care.

Next blog I’ll discuss how the financial challenges are creating positive opportunities to improve patient care.


Twitter: @MichaelMcCourt1