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Tackle delayed discharges and iron out variations in overheads, hospitals told

Variations in running costs, purchasing, sick leave and infection ‘unwarranted’ says final Carter review

Caroline White

Friday, 05 February 2016

Tackling “the major problem” of delayed discharge, which affects hospitals’ and trusts’ earning and spending capacity, could lop substantial sums off NHS overheads, says Lord Carter in his final productivity and efficiency review* of non-specialist acute care hospitals in England.

Delayed discharge currently costs the NHS £900 million every year.

Katherine Murphy, Chief Executive of the Patients Association said: “[We are] particularly concerned to see the huge costs caused by delayed discharge from hospital. Not only does this put a strain on services, but it causes unnecessary suffering for patients when they cannot be discharged. There must be investment in community and intermediate care services, which will release hospital resources and offer patients more humane and dignified treatment.”

The review also found unwarranted variation in running costs, sickness absence, infection rates and prices paid for supplies and services, which amount to £5 billion “in terms of efficiency opportunity – a potential contribution of at least 9% on the £55.6 billion spent by our acute hospitals,” says the report.

Ironing out these variations will not only save the NHS money but make it more efficient, says the report.

From April 2016, trusts will have to publish their receipts on a monthly basis for the top 100 items bought, such as bandages, needles, and rubber gloves.

As part of the review, a ‘model hospital’ was developed which will advise NHS trusts on the most efficient allocation of resources and enable them to measure performance against other trusts.

Among the variations, the report found average running costs for a hospital (£ per square metre) vary from £105 to £970, while sickness and absence rates differ from 2.7% to 5.8%—a variation of 118%, says the report.

Infection rates for hip and knee replacements vary from 0.5 to 4%, while prices paid by different hospitals for hip replacements range from £788 to £1,590.

Similarly, use of the use of floor space is highly variable, with one trust using 12% for non-clinical purposes and another using as much as 69%. Trusts’ unused floor space should not exceed 2.5%, and floor space used for non-clinical purposes should not exceed 35%, recommends the review.

As well as reviewing hospitals across England, the Carter review looked at healthcare systems abroad, including in the US, Germany, Australia, Italy and France, where hospitals have a greater focus on efficiency.

“My experience of the NHS and hospitals internationally is that high quality patient care and sound financial management go hand in hand. To improve the quality of care hospitals must grasp resources more effectively, especially staff, which account for more than 60 pence of every pound hospitals spend,” said Lord Carter.

Acute NHS trusts spend £55.6 billion every year, £33.9 billion of which goes on staffing. Lord Carter estimates a 1% improvement in staff productivity will save the NHS £280 million a year.

The review calls for an improvement in the way the NHS deploys its staff, ending the use of outdated and inefficient paper rosters. It points to the evidence that staff engagement helps drive down costs and boosts efficiency, calling on NHS Improvement to come up with a national people strategy to increase staff engagement.

Lord Carter also advises trusts to work closely with their neighbouring hospitals, sharing services and resources to improve efficiency and cut costs.

“Giving hospitals the tools and support to better manage resources will make it easier for boards to follow the example of the best trusts and mean every patient can receive the same world class care and taxpayers will also receive a fairer return on their significant investment in the NHS,” he added.

Jeremy Hunt called the review “groundbreaking” and said that it would help hospitals “care for patients, making sure every penny possible is spent on frontline patient care and bureaucracy is slashed so doctors and nurses can concentrate on caring.”

Lord Carter will continue to work with trusts to achieve the efficiency improvements they can make over the coming months, with NHS Improvement leading on the implementation of the recommendations.

Rob Webster, Chief Executive, NHS Confederation, said that even if hospitals implemented the full raft of recommendations, they would still not reach the target savings.

“Full delivery of the report will provide less than a quarter of the overall efficiencies we are required to make, and it is important to recognise the huge scale of the challenge ahead,” he warned.

“Alongside this work, we will need to keep a focus on system wide changes that deliver more cost effective care. Hospitals alone cannot deliver changes required and they will be working on the back of efficiencies achieved in the last parliament,” he said.

* Operational productivity and performance in English NHS acute hospitals: Unwarranted variations. An independent report for the Department of Health by Lord Carter of Coles. February 2016.

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