Strategies for improving Productivity Mark Jennings 17 th January 2011

“The definition of insanity is doing the same thing over and over and expecting different results.” “If you do what you've always done, you'll get what you've always gotten.”

Outline Improving productivity – 5 key messages Who needs to do what? Making it happen

Thinking and acting differently: 5 key messages

©The King’s Fund The gap

©The King’s Fund 2010 How we see the gap Financial gap? – The same output with less money Care gap? – More value with the same resource

2. The NHS paradigm “Quality costs”

©The King’s Fund 2010 Quality Efficiency _ _ + + NHS Plan ( ) Built for Growth ‘Quality costs’ Productivity falls _ _ Quality + +

Source: NAO Management of NHS productivity % pa

Source: NAO Management of NHS productivity % pa

©The King’s Fund 2010 Quality Efficiency _ _ + + NHS Plan ( ) Built for Growth ‘Quality costs’ Productivity falls Cost Control (1980s and 90s) Slash and burn ‘Efficient’ but lower quality _ _ Siege (2011 on) Fragmented system Wrong decisions Lower quality and efficiency Quality + + Efficient care is quality care (2011 on) A new paradigm Value focus

A new paradigm Health care can only considered to be high quality if it is also effective and efficient.

©The King’s Fund Focus Providers – new income focus Commissioners - growth money focus

Focus

4. How and what we do… Technical efficiency is doing things right e.g. reducing unit costs by reducing lengths of stay or shifting care to more cost effective settings out of hospital Allocative efficiency is doing the right things e.g. allocating resources to achieve the most health gain for the population served and preventing future hospital admissions

©The King’s Fund 2010 Technical efficiency Allocative efficiency

5. Variations in care “Variations in care are often idiosyncratic and unscientific with local medical opinion and local supply of resources appearing more important than science in determining how medical care is delivered” [J.Wennberg, BMJ, October 2002]

Unjustified variations in health care cause….. Increased cost Reduced quality

2-fold Magnetic resonance imaging activity 2-fold Caesarean section (without complications) spending >3-fold Emergency admissions among asthma patients aged 18 and under >10-fold High risk transient ischaemic attack cases treated within 24 hours (%) >4-foldElective admissions among epilepsy patients 12-foldBariatric procedures rate 5-fold Diabetes patients receiving nine key care processes (%) 2-fold Major amputations among type 2 diabetes patients, by strategic health authority 2-fold Cancer inpatient spending rate VariationAtlas indicator

| Who needs to do what?

Focus on clinical services delivery….

Acute Hospital Productivity

Total Opportunity £4.38bn

William Stanley Jevons Jevons paradox Jevons (1866). The Coal Question (2nd ed.).. Increasing the efficiency with which a resource is used tends to increase the rate of consumption of that resource

Quality Saves Money

| 1,0000 6,000 8,000 Life years gained £k 2,000 16,000 14,000 12,000 4, ,0005,5001,500 10,000 £500,000 8,247 life years gained Decommission or reduce commissioning of the least cost effective interventions… … and increase commissioning of most costs effective intervention in line with the best practices standards Adapted from: DH/Mckinsey Value based decisions

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Integrated Care Integrated health and social care teams serve localities of 25, ,000 – aligned with GP practices Use of hospital beds has fallen from 750 in 1998/99 to 528 in 2008/09 Unplanned hospital admissions and emergency bed day use for people aged 65+ lower than expected Public assessment of the performance of the NHS is the most positive in the region Source: HSMC Birmingham 2010 Torbay Care Trust

Mental Health and the productivity challenge: Improving quality and value for money

Variation in Acute MH Bed days Source: Audit Commission (2010) Opportunity £400m

Mental Health Priorities Action across the care pathway –Assessment –Acute beds –Discharge processes Effective responses to complex needs –Out of Area treatments Improve workforce productivity –Shifts –Sickness

Making it happen

Action at all levels of the system

Clinical Microsystems Small, functional, front-line units that provide most health care to most people. They are the essential building blocks of larger organisations and of the health system. They are the place where patients and providers meet. The quality and value of care produced by a large health system can be no better than the services generated by the small systems of which it is composed’. Nelson,E., Batalden,P.B.et al. (2002) Learning from high-performing front-line clinical units. Journal on Quality Improvement

Action at all levels of the system