West London Mental Health NHS Trust is a provider of a full range of mental health services for children, adults and older people living in the boroughs of Ealing, Hammersmith & Fulham, and Hounslow.
The Trust also provides specialist and forensic mental health services, including high secure services at Broadmoor Hospital in Berkshire.
The Trust as a whole and each of the service delivery units had developed an internal financial improvement strategy to ensure financial balance. However, the Ealing Service Delivery Unit (Ealing SDU) was showing early signs of overspending despite an injection of an additional £450,000 to the budget for the new financial year and implementation of their cost improvement plans.
Based on past history and current performance the unit was on track to overspend in the order of some £2million on a projected total income of some £41million.
GK Transformation were commissioned by the Trust’s Finance Director against a background of Ealing SDU overspending by circa £200k/month, to provide expert support to the senior managers and clinicians within Ealing SDU, to fully understand the reasons and scale of the likely overspend and then put in place rapid improvement actions to control spending, improve income and move towards a balanced financial position as quickly as possible.
The GK Transformation Consultant's tested and evaluated the assumptions and viability of the existing in-house cost improvement plans with the Clinicians, Managers and Directors of Ealing SDU and where required, with the Trust executive lead. From this, our Team were able to identify whether the existing plans were likely to be successful. Whether or not, they would achieve the levels of savings that were planned within the specified timeframe, and whether the in-house stakeholders had the necessary resources and ability to deliver the plans.
Furthermore, our Team were able to accelerate the introduction of some of the more resilient in-house plans and a number of rapid improvement initiatives, which have worked elsewhere, in order to bring some urgency and focus to the current situation. The consultant team also made an assessment and revision of cash-flow forecast of the savings plans to identify the expected levels of savings in the current year and next year, including any likely deficits.
In conjunction with the assessment of Ealing SDU’s existing cost improvement plan, a benchmarking exercise of the expenditure was undertaken to establish a true and sustainable potential cost reduction.
Following the initial benchmarking exercise our Team developed a more strategic and permanent fix of the financial imbalance, by undertaking a root and branch review of current services within the SDU, and then developed a new and more robust set of financial improvement plans for the short to medium term.
The Ealing SDU agreed their plans with the Trust Executives and Green & Kassab have continued to provide support with the cost improvement implementation process.
Cost Improvement Initiatives
Amongst the various cost improvement initiatives that were implemented in the period, the following actions delivered the most significant savings:
- Reduction in Consultant and Staff Grade posts (AOT)
- Reduction in the use of agency and bank nursing staff through the introduction of protocols
- Reduction in Band 5 Nursing posts in each ward (Adult and Older People’s)
- Closure of 1 x adult ward
- Reconfiguration of PICU service to single sex model, incorporating closure of 4 beds
- Reductions in Psychotherapy, Arts and Music Therapy budgets
- Reorganisation of Community Teams to implement a “Hub & Spoke” model
- Reconfiguration of management structure
- Reduction in administrative staffing in Older People’s and CAMHS services
- Improvement in clinical income (through reduction in bad debts).
After the 1st year (2009/2010) of implementation the overspend was reduced to £1.1million (against an original forecast position of £2.4million).
During the 2st year (2010/2011), the Ealing SDU budget was reduced by £2.5million from the previous year. Ealing SDU finished the year with an overspend of £400,000, an improvement of £700,000 from the previous year (2009/2010). Overall, due to the reduction in budget Ealing SDU achieved a cost improvement of £3.2million for the year.
With Green & Kassab’s continued support, Ealing SDU has developed a £2.7million CIP plan for 2011/2012 and a further £1.3million CIP for 2012/2013.