NHSScotland Efficiency and Productivity: Framework for SR10

1 Introduction

1.1 Background

1.1.1 NHSScotland - Time for Change

Poor quality costs. A literature review on the link between improving quality and reducing costs highlighted a number of examples where there is evidence of the high financial and human cost of poor quality. Regardless of the need to ensure efficiency savings over the coming years, as a public funded service the NHS has a duty to ensure value for money and to provide safe, effective and efficient services to the people of Scotland. The Healthcare Quality Strategy for NHSScotland (May 2010) underpins a vision of high quality services, of which efficient care is an integral part.

The demographic pressures of an increasingly ageing population and the care and treatment set out in Better Health, Better Care (December 2007) provides further motivation to change the way we currently deliver services. In the medium to long term, some current service delivery models will become unsustainable - they also will not deliver care in the best possible way to patients. We will also require careful and innovative workforce planning to be able to deliver new models of service effectively and efficiently.

NHSScotland has had a period of sustained growth during which time additional resources have enhanced patient outcomes, decreased waiting times and improved patient safety. The challenge is to continue this essential improvement within a tighter financial package. Adopting a priority-based approach, difficult decisions will need to be made on how services are delivered within budget. Demographic pressures alone, and regardless of the savings we need to achieve in the short to medium term, there is a need to redesign the services that we currently deliver to ensure sustainability for the future.

1.1.2 NHSScotland - Efficiency Savings to Date

NHS Boards have achieved the required 2% year-on-year minimum efficiency savings from 2007/08-2009/10. This equates to cumulative savings targets of £154m in 2008/09, £314m in 2009/10, and £515m (revised and increased from £478m) in 2010/11. NHS Boards exceeded the 2008/09 target by £50m (total savings of £204m recurring and non-recurring) and also exceeded the 2009/10 target by £53m, making total savings of £367m (recurring and non-recurring).

In reality, most NHS Boards have succeeded in saving greater than 2% to continue to develop local services and fund cost pressures arising from demographic change, new drugs, technologies and staffing costs. In 2010/11, NHSScotland's 14 territorial Health Boards plan to save an average of 3.22%.

1.2 Support to NHS Boards: NHSScotland Efficiency and Productivity Programme Existing Framework

The NHSScotland Efficiency and Productivity Programme was established in 2008 to support NHSScotland and is a collaborative effort between NHS Boards and the SGHD to identify and progress support for maximising efficiency and productivity. Its focus has been on identifying and quantifying potential productive opportunities and supporting NHS Boards by improving benchmarking and encouraging service redesign using improvement tools and techniques. A progress report was published in June 2010.

1.3 The Scottish Budget - 2011/12 Looking Forward

Following the UK Comprehensive Spending Review on 20 October 2010, the Scottish budget has been reduced by £1.3 billion in 2011/12. There will be further reductions over the period to 2014/15, especially on capital.

The Scottish Budget for 2011/12, published on 17 November 2010, is in draft and will be subject to normal parliamentary scrutiny before the final stage vote in February 2011. Health is in a preferential situation as resource funding consequentials arising from the Department of Health 2010 UK Comprehensive Spending Review settlement have been passed on in full in 2011/12. Protection of the NHS budget is, however, relative and further efficiency and productivity savings will be required recognising the impact of inflationary, demographic and clinical pressures.

1.4 Lessons Learned

There is learning from the NHSScotland Efficiency and Productivity Programme and from the literature on NHS efficiency which will be incorporated into this Framework. The key lessons are:

• the scope for greater collective action between NHS Boards and other organisations
• the large number of examples of good practice which should be adopted and implemented locally
• the disparity between identifying productive opportunities and converting those opportunities into cash savings, and
• the challenges associated with evidencing all of the benefits realised.

The recent Audit Scotland Review of Orthopaedics Services (March 2010) highlighted significant improvements but also significant variation in service models, costs and supplies. This Framework addresses this by ensuring a focus on reducing unwarranted variation to drive up quality and reduce cost, beginning with high-volume, high-cost services.

The evidence that quality improvement can make significant savings is limited (Ovretveit, 2009). Collecting the right data for the right purpose is not straightforward in a complex organisation such as the NHS. Improving the data on quality, performance and productivity will assist in evidencing the real quality and efficiency gains.

Enabling technology and customer-led services are areas that many industries and services have embraced but the NHS has been hesitant to progress this to full scale. The Quality Strategy will lead on this with the National Programme on Person-Centred Care, identifying where opportunities lie to create more mutually beneficial models of care.

The challenge is to turn all of this learning into an approach to efficiency and productivity that fits the Scottish context.