Creating a driver for efficiency

Published on Thursday, 25 November 2010 00:00
Written by Tony Spotswood

A review commissioned by the Department of Health and published  by the Foundation Trust Network, has estimated that the NHS could release £600m a year for front line services by improving the back office functions of health organisations. In an exclusive interview with Editor of Govtoday, Scott Buckler, Tony Spotswood, Chief Executive of Royal Bournemouth and Christchurch Hospitals, and author of the Report, discusses how savings can be found and what it will mean to frontline services.

Tony, Could you tell our audience how the report addresses efficiency?

What the report does is look at the current pattern of provision including the  spend on  back office functions in provider organisations and PCT’s and seeks to convey how the adoption of best practise, when compared  with the commercial and private sector back office functions could drive greater efficiency and effectiveness . It proposes a series of changes to drive efficiency forward. There are three key strands to the report, first is organisation: adopting an approach that enables back office function to be simplified secondly there is an approach to standardisation of functions, this will ensure we can drive out unnecessary activity. Thirdly, there is a need for organisations to come together and revise their functions on shared service responsibility. What the report requires on a practical level is for Finance or HR Directors to look in detail at their functions and decide which aspects they need to transform and what aspects can be delivered through shared services.

What have been the key challenges to preventing savings in the past?

I think most back office functions could historically be categorized as fragmented services. They were often replicated across many organisations. Each organisation provided many of their own back office functions with an absence of robust information, this meant that when we started our work on the report we needed to derive a clear understanding of how much was currently being spent on back office functions within the NHS. When there is an absence of robust information it becomes very difficult to forge comparisons between organisations in looking at  the relevant efficiencies. The consequence of  this absence of comparable data is   that back office services had little scrutiny or review and were not focused as they could have been on driving down management costs associated with back office functions.

What are the main factors in achieving the £600 m savings?

The essence of the report is to provide Board’s with practical advice on the potential for savings within their organisation and how to realise these, beginning with benchmarking of individual functions to allow sector comparison and some estimate of the potential for redcuing spend and driving up efficiency. . The report also explains how organisations go about undertaking the work to review and transform back office functions. How the report has done this is to look at how  back office functions are delivered elsewhere in the public and commercial , and to guage using experts from within the nhs, the application of these techniques for wider adoption within the provider and commissioner landscape s. I must stress there is some hard yards to be made in order to improve the efficiency of our services and ensure no diminution in the quality of service, therefore we must look at each function in detail particularly when it comes to simplifying and standardising functions. It will be important to implement some kind of shared service consortia.

How will efficiency savings of around £600m in the back office transform front line services?

The benefits , come from using the funds freed up, as a direct investment in front line services to help keep pace with increasing demands , rapidly changing technology, wider adoption of innovative approaches and in caring for an increasingly elderly population. I must emphasize is that our approach has been  measured, in calculating the savings  highlighted in the report and we have been cognizant  throughout of the need maintain capability and capacity in  organisations whilst at the same time driving greater efficiency.

With a greater emphasis placed on forthcoming GP responsibilities, how essential will it be for GP Consortia to procure more efficiently?

It is vitally important that GP consortia procure efficiently, the report was focused on changes that need to be made in the provider sector and PCT back office functions and that we need to move forward rapidly in looking at how these services are configured at scale. Potentially changes that allow PCT back office functions to be brought together at scale could   become the basis  for providing these services to gp consortia in the future.   It is important that we support GP    commissioners , allowing them to  focus their time on delivering primary and secondary services and not on negotiating individual contracts for  their own back office functions.

What happens next following this report?

There are two pieces of work going forward. firstly for provider organisations they need to  review i their back office functions to determine which functions, to simplify and standardise processes as far as possible and consider which elements of individual functions can be retained in house and which can be part of a shared service consortia. For commissioners there will be a piece of work led by the DH to develop a business case  to evaluate  different models and options  for how these services should be provided and configured going forward.

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