Road to Recovery

Decline

In order for trusts to determine the drivers of their financial position, they need to understand what is causing the deficit and, where relevant, what has continued to cause it. 

There are four key steps to go through to start understanding and addressing your financial decline

1. Identify the causes and drivers of financial performance, including a financial baseline review to understand your underlying financial position

2. Undertake a discretionary spend review

3. Rapid assessment of in-year cost improvement opportunities

4. Prepare your financial recovery plan (FRP)

Recovering from within

Having arrested the decline in financial performance and stabilised positions, organisations have decisions to make as to where to go next. To move beyond cost improvement plans and focus on enduring sustainability they should consider the following:

• Workforce – reviewing the demand and capacity of workforce can give rise to both cost out and productivity opportunities
• Operational improvement – theatre productivity, outpatient productivity and patient flow are three key opportunities that should be focused upon
• Budget setting – engage the whole organisation in the budget setting process as early as possible. and consider alternative approaches to budget setting such as zero-based budgeting, rather than simply basing budgets on last year
• Zero-based budgetting – a way to reset costs based on the organisation’s priorities by helping management to strip out any cost-generating activities and external spend while maintaining optimum service levels and quality.
• Understanding the activity value stream – consider how you can understand the value driven from every activity in the organisation to give greater insight
• Making the most of the Model Hospital – it is an extremely useful tool for helping guide an organisation to where potential opportunities may lie

Recovering across the system

As an organisation moving up the curve, the next steps are to consider how to work wider across the system, rather than simply within the organisation itself:

• Collaboration within the system – benefits should include: temporary pay efficiencies, opportunities through pathology collaboration, and, system-wide service configuration and estates planning
• Data quality and sharing information across the system – for Integrated Care Systems (ICSs) to succeed, organisations need to work closely together to understand, analyse and form ‘one version of the truth’
• Contracting and commercials – explore innovative ICS focused solutions and draw on the best and most applicable models from the private sector

Sustainability

As organisations look to the longer term, reaching a sustainable position requires more radical approaches in particular, how technology is impacting the sector:

• Technology will have the potential to save the health sector both time and money, through both a short-term focus on costs where technology can enable greater visibility on the true costs for deliver, and longer-term changes to service delivery
• Technology such as 5G, robotics and automation will increase accuracy and speed of back-office functions and add clinical facing time to ensure patients get the best and most appropriate care