Making changes to achieve savings - without disastrous consequences

In managing the NHS, we have choices. Are we perfectionists or compromisers, micro or macro? When we have a difficult problem do we think radical, fundamental, realistic, or painstaking? My experience is that when push comes to shove it’s worth being an evolver more than a radical, and a realist more than a visionary.

When I came to West Hertfordshire Hospitals Trust three years ago we had a savings target of 10 per cent which was simply passed down to budget managers. Not surprisingly, as they had no idea how, even though they were terrified, they achieved little.

Top-down pressure, even enormous pressure in pursuit of a completely unrealistic goal, doesn’t work. It also has perverse consequences.

In 2007 the trust opened an elective care centre in the middle of a vacancy freeze designed to save money. This resulted in major shortages in theatre staff, operating sessions cancelled left, right and centre with major loss of income and lots of agency staff employed at highly elevated rates. Result: already long waiting times were extended and an elective overspend of £500,000 a month created.

My response to this was an immediate removal of the vacancy freeze and a major lowering of the savings target to what might be achieved in the remainder of the year. The £500,000 per month overspend went within a couple of months, waiting times began to go down and a solid level of savings was achieved, though far less than the original target.

For the following year we had a very substantial savings target so this time I took the opposite approach. Managers were expected to efficiently look after the things they could, but they were asked to compile programmes on the basis of what they felt was possible.

People now had the chance and the responsibility to do things better. Moreover, they were held to account for that. To be counted in the programme, savings had to go through rigorous scrutiny. The result: we saved 4.5 per cent.

At the end of 2008-09 we had to make a huge “visionary” change, rationalising our emergency services from two sites to one in the interests of viability, quality and savings. As with the elective centre, the plans assumed large savings would follow virtually automatically.

We questioned these and, unsurprisingly, discovered they had been too optimistic. It was still the right thing to do but the vision did not solve the savings problem.

Result: we were able to make the enormous visionary change without the disastrous consequences we had with the elective centre, but with a further 4 per cent savings requirement.

In these circumstances we needed to refresh our savings efforts. While people had been intelligent and taken responsibility, they were starting to get tired. However, it was apparent that many of our basic day-to-day systems were working poorly.

I defined our next savings task as getting the basics right (the BRIGHT savings programme), building on many obvious areas that were coming to light and encouraging people to look for more. We also supported people who identified opportunities to effect the changes needed. This struck a chord and we got off to a flying start.

We did manage to find the rest of the 4 per cent (with a 7 per cent productivity improvement) but it was a long slog and as we reached the end of 2009-10 exhaustion was again appearing. Even with the most vigorous negotiations it was clear that we would have to find a saving of nearly 8 per cent.

If we were to achieve such a target we could only do it by getting everyone from senior consultant to junior ward clerk to understand how important this was and participate. We christened it the Big Ask. It’s been a rollercoaster but with an extraordinary organisation-wide effort, we have now passed 6 per cent and should hit our target.

Out of the Big Ask, service redesign options are emerging naturally. We’ve eked out all sorts of savings and in the process revealed some of the ways we do things are eccentric, wasteful and outdated.

So, what are the lessons?

1. Have a strategy sensitive to your local circumstances - not top-down
2. Have a process but don’t create an industry
3. Engage everyone - get them to take responsibility, praise their progress and successes
4. Make the whole organisation part of the solution
5. Have a title. Make it something that strikes a chord
6. The key question is how, not what. Think about competence, capability, credibility and understanding
7. Be innovative, be ingenious and question everything
8. Be a realist - not a defeatist and not an idle dreamer
9. Be painstaking, be imaginative, persist.