In the first part of our series on organisational turnaround, HSJ writers quiz three NHS trusts on how they fought their way back from the brink of financial Armageddon

In the first part of our series on organisational turnaround, HSJ writers quiz three NHS trusts on how they fought their way back from the brink of financial Armageddon

As more and more trusts are forced to take radical action to stop themselves falling into fatal levels of debt - or to pull themselves out if they have already reached that situation - HSJ begins a series of articles on the art of the turnaround. We start with a look at rescue operations in Brighton, Ipswich and Trafford.

Brighton and Sussex University Hospitals trust

'It's a bit like alcoholism they were in denial,' reveals Brighton and Sussex University Hospitals trust chief financial restructuring officer Donald Muir. Drafted in last year as part of the Department of Health's turnaround initiative and after KPMG and PricewaterhouseCoopers had been into the trust to analyse the cause and possible solutions of the trust's£17.3m deficit, Mr Muir's task was clear: return the trust back to a balance position by October 2007.

He says that when he arrived, the trust's culture was such that staff did not believe there was a problem. 'Once they admitted they had a problem and got the right help, whatever the costs, they started to get to where they belong.'

Mr Muir pulls no punches: 'We got rid of the human resources director, the finance director and the head of strategy. The chief executive sent a strong letter to all divisional managers saying what turnaround was about.'

The trust also made 250 posts redundant largely through a reduction in bank and agency nurses and only made 20 staff redundant.

The first organisational change was to establish a programme management team. Mr Muir, along with trust chief executive Peter Coles, then picked managers to head up workstreams across the trust.

Each workstream head was required to report to the project improvement group on a weekly basis to report what had been achieved during the week and how much money had been saved or spent.

Trust deputy director of facilities and capital development Ian Tait leads the four workstreams transport, facilities and estates, provider to provider relationships and quality. He readily admits that the weekly sessions with Mr Muir and his team were 'onerous' and that the NHS culture within the trust meant people were initially taken aback with the way the turnaround team was approaching things.

However, he says the process 'concentrated people's minds' on justifying the work they were doing and how much it cost. Mr Tait also highlights the 'spend to save' scheme brought in by the turnaround team.

The scheme gave different teams the chance to win funding for a new project, staff post or investment in new equipment, if they could demonstrate how much that investment would save in the longer term.

'This played a big part in helping to change the culture within the organisations, especially with the junior managers, who could see the possibility of getting some investment if they could show how much it would save'.

Principal lead consultant in theatres and anaesthetics Jo Andrews agrees. 'The turnaround process has facilitated a huge amount of change; it has helped identify problems to focus on and make the changes that need to be made,' he says.

'PricewaterhouseCoopers discovered a general lack of efficiency in the way we used the theatres - without the turnaround focus we might have got round to doing something sooner or later, but there was a lot less enthusiasm before.'

Mr Andrews says there is now a greater degree of 'cross-communication' within the trust, with teams trying to work together, and he believes the 'spend to save' scheme was 'invaluable'.

Associate directors of nursing Sherree Fagge and Jo Thomas are also keen to acknowledge the positive impact that turnaround has had on the organisation. Ms Fagge was seconded to the central turnaround team, which she says made a change to 'just having financial guys in there'.

Ms Thomas says turnaround also raised the profile of nursing in the trust. 'Turnaround gave us the opportunity to stand up and be counted,' she says. Led by Ms Thomas and Ms Fagge, one of the innovative results of a 'spend and save' investment for the nursing workstream was to employ a 'sickness buster'.

Ms Fagge says sickness rates among nursing staff were significantly higher than the national average. 'Through 'spend and save' we were able to employ someone to look at our sickness rates by division, department, ward and individual level,' she says, adding that knowing the reasons for sickness significantly helped to reduce it.

Visiting Brighton and Sussex University Hospital now, it is obvious there is a new buzz about the place and reducing the deficit to zero by October 2007 (not withstanding a£4m deficit agreed with NHS South East Coast for taking over Brighton Children's Hospital) is, according to Mr Muir, achievable.

Some parts of the estate, like many parts of the NHS, are in desperate need of renovation, others look and feel breezy and new, but by all accounts the culture change within the organisation is what has led to recovery.

At the trust headquarters a piece of paper stuck to a wall emblazoned in green marker pen with the figure£17.3m still reminds staff of the size of the challenge, but it seems this may soon be removed as the trust achieves balance.

Helen Mooney


Ipswich Hospital trust

'Spend every penny like it's your own' is the mantra for staff at Ipswich Hospital trust. Three consecutive years of deficit, escalating from just over£1m to£12m last year, resulted in a raft of tough decisions to pull the trust out of crisis.

Chief executive Andrew Reed says speed was a key factor. 'Like many trusts we realised the process of putting a turnaround plan in place needed more skill and capacity than we had in the hospital - we couldn't spend six months putting a plan together.'

Consultants KPMG were called in and drew up an eight-week programme that began at the beginning of July last year and went through the peak of the summer holiday. A steering group of clinicians oversaw the process, giving approval to the schemes.

The ideas stage involved more than 100 members of staff pulling together in workshops, with suggestions ranging from changes to the way medical secretarial services are provided to commercial income-generating schemes, some of which generated more excitement than others.

'One of the ideas from the radiotherapy department was to use down-time on linear accelerators to provide radiotherapy services to local veterinary practices. We thought this would generate around£50,000 income,' says Mr Reed.

A wave of media interest followed and the hospital bore the 'eight out of 10 cats prefer Ipswich' comments with good grace. The idea, generated by clinical staff, has not been pushed forward as yet, but it may still be considered.

There are 14 schemes running for 2007-08, explains head of turnaround Rowan Procter. 'In essence they are to embed turnaround into the future day-to-day workings of the organisation,' she says.

'We are working with primary care trusts and social services in improving the patient journey and ensuring they are cared for in the most appropriate environment - with that follow the savings and efficiencies that go towards financial recovery.'

According to Ms Procter, millions of pounds have been saved by making better purchasing decisions, ranging from prostheses to standardised theatre gowns. Having a photocopy shop and rationalising photocopying has also resulted in an annual saving of£80,000.

Director of service delivery and improvement Tracy Dowling says the process has been painful but has proved a lever for change. Medicines management has saved over£1m in the last year.

She says that although it is not at the end of the journey, Ipswich is continuing with progressive improvements that are now taken from the perspective of a much more systematic redesign of systems and processes.

The areas that proved more difficult were those benchmarked against similar hospitals. This, says Mr Reed, included staffing levels of nursing specialists, physiotherapists and occupational therapists. Benchmarking showed that Ipswich had many more of these than their comparator hospitals.

'The difficulty we had was to say we have to take an affordability slant on this,' says Mr Reed. 'It's very nice to have this number of nurse specialists - I think we had over 100 - but we just can't afford them.

'We had to review in great depth what services they were providing and if we were being paid for those services which is one of the core principles and take some very tough decisions.'

Mr Reed says that over two-thirds of staff across the hospital have been subject to review and probably half that number have been at risk of redundancy at some point. The good news is that only seven staff were, voluntarily, made redundant and any other losses occurred through natural wastage.

The massive upheaval has produced the desired affects. Expenditure has been reduced by£8.5m and in November the trust broke even. A surplus has been achieved for the first time since 2002-03 and all access targets have been achieved, with improved performance in accident and emergency and sexual health.

In the background of all this change has been a£25m private finance initiative-funded project, which started last year and is due to for completion this winter. The build will provide a new critical care unit, A&E department and day surgery.

This investment, the biggest the trust has had in 20 years, not only gives it the opportunity to get the organisation of services right but, says Mr Reed, will enable it to operate successfully in a very competitive market.

'When we tipped into deficit last year we had the inevitable questions over affordability,' says Mr Reed. 'A local MP said to me that it's a bit like losing your job and then building an extension on your house, and I can understand the mixed message.

'We signed the PFI before we knew about the extent of our financial problems and it was another driver to sorting them out. During the darkest days of turnaround a few people said to me that what kept them going was this fantastic facility. It has been a touchstone.'

Rebecca Allmark


Trafford Healthcare Trust

When Edna Robinson was brought in as chief executive to turn around Trafford Healthcare trust's finances last May, even she was taken aback by the scale of the task at hand.

Deficits had run to£3.5m in 2004-05 and only a non-repayable strategic health authority loan of£6.22m left it£2.3m in the black at the end of the following year.

But the trust was still bound by an obligation to get back into financial balance by the end of 2006-07 under an SHA recovery plan - something Ms Robinson knew couldn't be done.

She says: 'Within two weeks of being in the job I told the SHA that it wasn't do-able. I thought it was wildly optimistic. My credibility was on the line so I had to say straight away that we don't think we will do it this year.'

A dearth of strong management meant the hospital did not reverberate with the same optimism of the bright sunny day in July 1948 when Aneurin Bevan launched the NHS at the site, then Park Hospital.

She says: 'We were using borrowed money to pretend we were OK. People didn't understand what they had to do day by day. There was a sense of a debt but it was someone else's problem. There was not real ownership, not of the fact that we had a problem, but whether there were any solutions.'

Ms Robinson says good leadership is 'anticipating and bringing everybody with you rather than reacting and following'.

Immediate measures had to be put in place and managers 'got quite stern about people over-spending; people were not allowed to authorise spending and there was a general freeze'.

Staff on long-term sick leave had their contracts terminated or were brought back to work,£1m was saved in capital charges after the trust's properties were revalued at a lower rate and managers are now engaging unions over staff re-deployment.

Positive steps to increase capacity were also taken through more outpatient clinics and scrapping Altrincham General Hospital's minor injuries appointment system, leading to a four-fold increase in patients.

Day-to-day efficiencies have saved£1m but long-term measures are needed to bring about the£500,000 expected at the end of this financial year, she says.

Crucial to this was giving the trust a strong sense of identity to market itself to GPs, many of whom Ms Robinson admits had 'lost confidence' in its services. Public perception of services was also poor, she says.

Trust systems and processes were also criticised in the report - and this came less than six months after a member of the public won a High Court case over the closure of 26 beds at Altrincham. And earlier this year an NHS-commissioned report blamed a doctor who worked at the trust for misreading 14 mammograms which meant women with breast cancer were given the all-clear.

But there was a future for services, Ms Robinson says: 'The GPs in the Altrincham community have used me less and less because they have used the sexy big international teaching hospital down the road. So what I am doing is building a strong outpatient service there, where previously we did very little.

'We want to be proud to be general and it's OK to be general. This is a good bread and butter hospital and it has a future. It is what the NHS defines itself by.

'It is about volume but also the type of service we provide; you have to consider what the market opportunities are, and that is in ordinary kinds of healthcare and not fancy healthcare. It is doing things big teaching hospitals don't.'

This meant carrying out an analysis of all service lines to see what specialities were and were not making money - and then developing a clinical strategy set to change most inpatient procedures to day-case by April 2009.

But Ms Robinson says that this can only be done 'in partnership with other people' and through attracting not only patients but other NHS providers to use Trafford as a 'landlord'.

Ms Robinson says: 'What I have got is spare capacity. I have got spare land, spare wards and some of my colleagues in other hospitals are packed to the doors and bursting, so clearly there is a solution there.'

Already the hospital is host to Netcare's Greater Manchester Surgical Centre and Central Manchester Healthcare Trust leases a ward for neurological rehabilitation - and another agreement is expected soon.

She says: 'I have to have the hospital open 24 hours a day anyway so I might as well use it wisely.'

For the future she says: 'The public have responded slowly and I think we still have some way to go.

'People still think we are in this negative cycle but the board, the senior team and clinical directors have their heads up and know that is in the past.'

Oliver Evans