Better management and use of staff could save NHS billions a year

Lord Carter's interim report into productivity in NHS hospitals says £5 billion a year could be saved through better use of staff, using medicines more effectively, getting better prices for products, and improved management processes

Huge savings could be made in hospitals through better workforce planning and improved management of staff, rotas and shifts, according to a review.

Last year, health secretary Jeremy Hunt commissioned Labour peer Lord Carter to review operational activity in 22 NHS hospitals. 

Lord Carter’s interim review of findings, published today, says the NHS could save up to £5 billion a year by 2020 by making better use of staff, using medicines more effectively, and getting better value from the products it buys. He says £2 billion a year could be saved by improving workflow and being efficient with workforce costs. This includes having a ‘stronger management grip’ on rotas and shifts and annual leave, sickness absence and training.

The review says that in 2013/14 the cost of nurses in the NHS was £19 billion. However, it found that there may not be enough nurses to ‘meet the post-Francis demands of the NHS and that there are inequalities in how nurses are utilised, with many nurses working longer hours than they are contracted for’.

It also found poor management practices in nurse rostering. The findings were based on data collected from nursing rosters from every ward in the 22 hospitals during February this year.

An over-flexibility in management practices is resulting in both over and under-rostering, the report says. It found that on many days there are not enough nurses, while on others there are more staff than required against the patient count.

Workforce costs are a particular priority – a 1% improvement in workforce productivity could represent as much as £400 million in savings annually.

A further £3 billion could be delivered from optimising the medicines used in hospitals, as well as estates and procurement management, the report says.

The report into productivity in NHS hospitals says there are two key obstacles to improving productivity. These are the lack of quality data and the absence of metrics to measure relative performance.

Lord Carter recommends using the Adjusted Treatment Index’ (ATI) developed with the 22 hospitals. He believes the ATI will serve as a barometer that enables hospitals to compare themselves against one another, while also acting as a baseline for future improvement.

He said: ‘The NHS has some of the best hospitals in the world in terms of quality, innovation and operational efficiency. The challenge is to lift hospital efficiency to a consistently high standard in every area of every NHS hospital and, where we already perform well, innovate to improve further.

I do not think there is one single action we can take, but I do believe there are significant benefits to be gained by helping hospitals, using comparative data, to become more productive.’

Mr Hunt is calling on the NHS to ensure every penny is spent in the most effective way to improve standards of care while reducing costs.

‘I’m determined hospitals should focus their resources on patient care by helping them ensure they are not paying over the odds for basic items,’ he said. ‘The NHS has huge purchasing power as the world’s single biggest buyer of healthcare products, so we should be driving for the best-value deals every time.’

RCN general secretary Peter Carter welcomed the report and said waste in the NHS is preventing hospitals from directing resources into front line care.

‘The RCN has been saying for several years that nursing numbers are not meeting demand and Lord Carter has set out a very strong evidence base to support the fact that the NHS could be making much better use of its staff,’ he said. ‘By investing in permanent staff, with training and development, sufficient incentives and improved rostering arrangements, the NHS could reduce its staff turnover and save on the cost of temporary staff.’

Last week, an NHS Confederation survey revealed that 71% of senior NHS leaders described the current financial pressures as the worse they have ever experienced.

NHS Confederation chief executive Rob Webster said: ‘Lord Carter’s interim findings are crucial to understanding how costs might be brought down and we expect that the implementation of his review will be developed further with the sector, in the spirit it has been up to now.

‘The potential savings need to be tested and developed with the wider NHS, so that final savings targets due to be handed to the NHS from September, are owned by the whole service.’

Click here to read the Review of Operational Productivity in NHS providers

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