Hospital Landscape: a winning attitude to improved performance

The 2011-12 NHS operating framework may not have been surprising in itself, but its impact could be.

For some it has created a crisis situation, as it brought the reality of the challenges ahead into sharp focus. Hospitals are expected to contribute the lion’s share of the required quality, innovation, productivity and prevention savings, through productivity gains and real cost reduction.

Service quality needs to continue to improve to keep pace with increasing patient expectations.

It is inevitable this will require significant changes in the workforce, as well as in the services which hospitals provide.

Next year’s improvement plans will need to be rooted in a deep understanding of performance to identify and deliver cash-releasing improvements and to create a platform for more strategic changes over the next few years.

Plans will need to be more ambitious and more specific than ever, tracing a logical path between the improvement action and its expected impact on quality, productivity and the hospital’s financial position.

This will require fresh insights from the available data as well as a significant investment in the confidence and capabilities of staff who make and own the plans, and who will be held account to deliver them.

Some hospitals have a strong in-house analytical function to exploit the available data and develop user-friendly ways to put reliable performance information into the hands of clinical teams. Many are not there yet.

A common refrain is: “We have a £25m gap to close next year, and we have identified £15m so far. We still have £10m to find”. The NHS has a fantastic natural resource in the multiple, national data sets which exist. There are certainly limitations in these data sets and though they are neither infallible nor definitive.

Dig for victory

That said, many other health systems would give their right arm to have something similar. We need to learn to mine it and interpret it properly, and the McKinsey Hospital Institute hospital-wide diagnostic tool is one attempt to do that, identifying a hospital’s strengths and weaknesses against a selected peer group as well as specific and actionable opportunities. Take a look at the example analysis to see how it works.

The tool looks at four dimensions of performance; quality, operations, finance and organisational health. We have weighted a number of publicly available metrics in each category to create an overview “performance diamond” (see top diagram).

We then look at the drivers behind each of the four domains of performance in detail, and investigate the relationships and correlations between key measures of performance.

For example, plotting nursingpay costs per spell against the national survey data on the confidence and trust which patients have in the nurses caring for them is instructive and can reveal a dangerous path towards a “low cost, low confidence” model (see bottom diagram).

When we look at variations in pay costs, we benchmark at the level of the operational driver of pay costs (see middle diagram); which include pay levels, skill mix, productivity or length of stay. In the graph, nurse pay per whole time equivalent is low relative to peers, but so is nurse productivity which lags below the top quartile relative to peers.

By modelling the financial impact of the individual levers we can help to size the potential associated with different courses of action.

As with any benchmarking based exercise, the data provokes very different reactions. Given the size of the challenge facing hospitals right now, curiosity seems like a winning attitude to choose.

For all our advocacy of the importance of a proper fact base, the hard work really begins when it comes to using it to create a robust plan which really holds water, and which looks beyond the next year. For many hospitals, it is the quality of this improvement plan and their ability to deliver it which will be the make or break issue on the path to foundation trust status.

We have found that one of the smartest and most strategic investments a hospital can make is in equipping the cohort of clinical leaders and managers who own and are accountable for delivering these plans to be successful. This includes a core set of tools and skills to understand the business, solve problems in a structured way, redesign services and process and lead teams.

This kind of intervention is even more powerful when it is bound up in a well articulated, long term change story, a shared improvement methodology and a positive culture which says “we will do this”, rather than “we can’t because…”. We will develop these themes in the next article in this series.