1. MODULE 5 – SAVINGS AND SUSTAINABILITY

2. You will learn Understand the financial constraints facing BCU
How to take steps to minimise waste and inefficient use or resources;
How to propose savings schemes and support the implementation of savings schemes;
How to use information from a wide variety of sources to identify potential savings schemes;
How to ensure that savings are delivered, balancing with requirements to deliver quality and safety;
Understand the difference between a saving and cost avoidance.

3. Looking Back -Savings Delivered 2014/15
Cash Releasing - £27.7m & Cost Avoidance £6.7 = £34.4m
Continuing Healthcare - £3.7m
Externally Commissioned Services - £4.2m
Medicines Management - £6.9m
Procurement - £9.0m
Primary Care- £2.2m
Workforce Modernisation – £8.4m
McKinsey categories that we have to report monthly to WG on

4. Cash Releasing vs Cost Avoidance
Cost Avoidance -anticipated costs you haven’t yet incurred but you “avoid” by putting a plan in place.
Efficiencies – creates capacity e.g. more theatres, more activity less patients waiting.
Cash Releasing – £’s in the pocket

5. Financial Strategy – Looking Ahead
Financial gap of £14.2m
Savings built in 4.5% (6% required to break even)
Sound Financial Management is a fundamental building block of any successful organisation. Financial Management is not just about recording and monitoring expenditure and income, but about planning to meet new challenges, knowing how the money is being spent, and whether the resources currently being utilised represent best value. If the relevant processes and controls are in place to achieve good financial management, this then allows the organisation to focus on quality and improvements in service delivery.
Recommending a budget which shows a net financial deficit is an unprecedented position for the Health Board
While there is no statutory target to achieve breakeven within each year, there is a clear expectation from Welsh Government that breakeven would be achieved

6. Savings Required 2015-16 Locally Managed Savings £18.8m (2%)
Strategic savings £24m (PMO)
Still leaves a shortfall of £14.2m
The Length of Stay project will focus on releasing bed capacity through ensuring an efficient process for inpatient stays, and facilitating rapid discharge.
The Theatre Productivity project will increase the productivity of theatre teams through a focus on addressing the root-causes of cancelled lists, alongside improving turnaround times.
The Outpatients project is focused on reducing the level of DNA’s, hospital cancellations, improving the productivity and efficiency of outpatients, and on addressing the level of follow up appointments.
The CHC and FNC project will bring a more strategic focus on this area, improving working practices with the Local Authority and Care Home sectors, and facilitating improved discharging from inpatient episodes.
The Prescribing and Medicines Management project will develop a new way of working for the Pharmacy teams, alongside facilitating support for clinicians in Primary and Secondary care.
Procurement will provide strategic and operational support to delivering cost reduction within non-pay.
Estates and Asset Management will facilitate greater efficiencies with patient services and support services; alongside a review of estate utilisation.
Pay-related schemes require a renewed focus on our use of bank and agency, alongside taking advantage of the opportunities within our substantive staff contracts for more efficient working practices.
Other schemes include a number of elements, including the continuation of elements of the Financial Recovery Plan from 2014/15 and the development of new pathways.

7. Financial Planning - Future years
Financial climate not improving
Three year plans
Risks

8. Drivers for Savings More money being spent on the NHS than ever before
Demands and expectations
Demographics factors
Lifestyle factors
Push for improvement in access and quality of care
Easy to deliver savings already been exploited
Now need to focus on more difficult areas for recurring savings i.e. service reconfiguration to transform the way that NHS services are delivered
The Nuffield Trust in 2014 published ‘A Decade of Austerity in
Wales’ highlights the financial pressures facing Wales.
Wants and Needs – Chocolate & Broccoli?
Aging population increased chronic conditions, increased survival in Cancer
Smoking cessation reduction in numbers (20%) as people transfer to E Cigs, fast food vs mum at home & cooked meals when I was a lass.
New drugs and new technologies pushed by companies – NICE and Cancer wonder drugs, bionic arms etc.

9. What is the Health Board doing?
Transformational Director Post
Further services reviews – acute services
External support
Transactional/Transformational savings
Programme Management Office
Mention Deloitte report
And the need for disinvestment
Mention Prudent healthcare - the principle of “do no harm” and reducing activity where the risk of harm outweighs the clinical benefits.

10. Transactional Savings - What can Managers & Budget Holders do?
Cost avoidance vs Saving
Benchmarking across sites
Benchmarking with peers
Procurement
Communication
Joint Initiatives with Local Authorities (e.g. ICF)
Review contracts
Understand cost drivers
Fiscal Controls
Annual Leave Management
Impact on quality and safety

11. Transactional Savings – What can Managers & Budget Holders do?
Sickness absence management
Regular review of budget reports
Income generation opportunities
Any savings ideas?
What examples of waste and inefficiency have you encountered?
What did you do about it?

12. BCU Expenditure
Look at what you spend – how do we compare internally, rest of Wales and England
Benchmark
Test the Market

13. Programme Budgeting – potential savings?
Comparative spend with rest of Wales – where are we outliers? Why?
JL example of Head & Neck Cancer ALOS higher
Service Improvement – change practice

14. Invest to Save Funding available to bid against Funding is repayable
Have to demonstrate savings
Minimum bid of £200k
Contribution of up to 75% of the project costs
Fit with WG strategy
Possible internal I2S funding for less than 200k – follow same principles