The Carter Review – Trusts told to look for external solutions to meet efficiency targets

The Carter Review has now published its final report on improving productivity and making efficiency savings in the hospital sector. With £5 billion savings per year (by 2020) in mind, the report emphasises that Trusts must come up with a convincing plan for how they can meet the report’s 15 recommendations fast – or work out how they can outsource responsibility for doing so.

The review identifies ‘unwarranted variation’ throughout the NHS in the provision of care and in Trust administration, from the price of hip prostheses to staff sickness rates. Lord Carter has made 15 specific recommendations to increase efficiency and reduce this variation across the hospital sector.

While some of the recommendations relate directly to the activities of NHS Improvement – and give insight into the complex and wide-ranging objectives that the successors to Monitor and the TDA will be expected to fulfil – the review has not shied away from setting clear, time and money based benchmarks for all Trusts to measure themselves against. Lord Carter has called for Trust boards to be held to account if the NHS fails to make the anticipated savings, and urges organisations to work together to achieve the challenging targets that have been set.

For example, the recommendations below directly apply to all Trusts:

Recommendation 3 – Hospital Pharmacy Transformation Programme

  • By April 2017, Trusts should have developed plans to ensure that hospital pharmacies achieve benchmarks to be set by NHS Improvement including:
    • More pharmacist prescribers;
    • E-prescribing and administration; and
    • Consolidation of stock holding.
  • Recent years have seen a number of initiatives to achieve efficiencies in hospital provision. Among the outsourced solutions that Hempsons’ procurement team have assisted to deliver, we have seen initiatives to increase efficiency through automation such as pharmacy robots, outsourcing of out-patient pharmacies and the outsourcing of sterile compounding.

Recommendation 4 – Pathology & Imaging

  • By April 2017, Trusts should be ensuring that their pathology and imaging departments are meeting their benchmarks (which are yet to be agreed with NHS Improvement).
  • If a Trust considers that it is unlikely to meet its applicable benchmark then, by no later than January 2017, it should have agreed plans to outsource its pathology and/or imaging services to another provider, or to consolidate provision with other providers (presumably neighbouring  Trusts).
  • Hempsons recent experience of assisting deliver pathology managed services solutions has shown that effective measurable service delivery can be achieved at the same time as delivering cost savings.

Recommendation 6 – Estates & Facilities

  • By April 2017, Trusts should have a plan in place to achieve a maximum of 35% non-clinical floor space and only 2.5% unoccupied or under-used space, with these outcomes having been achieved by April 2020.
  • Effective space utilisation requires effective estates information capture and systems that enable easy access to such data. Hempsons have developed a web based on-line estates portal to assist clients manage their estate effectively and meet the challenge to achieve efficiency savings in the utilisation of Trust’s estate. Trust’s interested in a demonstration of our portal’s capabilities should contact the Client Services team for a demonstration.

Recommendation 7 – Corporate and Administration Functions

  • By April 2018, the corporate and administration elements of a Trust should not exceed 7% of income (and only 6% of income by 2020).
  • If a Trust considers that it is unlikely to reduce costs in line with this ratio, it should by January 2017 have made plans for these services to be consolidated with or outsourced to other providers.
  • Such developments are likely to increase the trend towards cross Trust working “shared services” models. We comment further below on this development – which is an area where we have implemented numerous projects and where the current trend is towards in house services companies. Other recent developments include the provision of a number of framework solutions such as the Lead Provider Framework established by NHS England that covers a wide range of back office requirements and is available to Trusts.

Recommendation 9 – Digital Information Systems

  • By October 2018, all Trusts should have key digital information systems in place (e-rostering, e-prescribing, electronic health records, e-catalogue & inventory, and patient level costing and accounting systems) and be using these in accordance with benchmarks to be produced by NHS Improvement.
  • Trusts will also have to co-operate with NHS Improvement by reporting procurement information monthly and providing the data to underlie the ‘Model Hospital’ that is to be developed as a benchmark of good practice, and against which Trusts can expect to be measured in future.

It is clear from these recommendations, and from those which NHS Improvement will be required to achieve, that Trusts will need to carefully assess their existing processes.  For example, effective data capture will be the decisive factor if the NHS is to demonstrate the savings it is being asked to make. Electronic staff records, e-prescribing and a standard product catalogue are all given as examples where effectively collecting data about performance can inform more efficient use of the same resources.

If Trusts do not have the ability to reliably gather this information now, procuring electronic data management systems will need to be high up their list of priorities for the year 2016/17. Equally, those Trusts that are presently falling short of Lord Carter’s efficiency targets will need to think carefully about their options for collaborative working.

The drive is for Trusts to proactively take steps to understand how their own services are performing, consider entering into collaboration arrangements with other organisations to procure supplies or services if necessary, and to take decisive action where improvement can be made. Organisations that delay may well find that the efficiency savings required are outside their reach in the required timescales – and then find themselves having to make more drastic changes to achieve the targets set by NHS Improvement.

In considering how to meet Lord Carter’s proposals Trust should carefully consider the options available including outsourced and collaborative solutions. Such solutions, however can only be accessed after a successful navigation of procurement law duties.  So for example, whilst collaborative working is possible, care needs to be taken to ensure that the collaboration is structured so as to be compliant with the relevant procurement law exemptions so as to avoid the arrangements being at law one Trust simply contracting with a neighbouring Trust for services.

Hempsons’ specialist legal advisers combine commercial and regulatory expertise and can support Trusts in establishing partnerships with other providers, procuring novel solutions and managing institutional change.

For more information on the services we can offer, please contact Adrian Parker or Andrew Daly.