warwick

We were commissioned by the Director of Finance of the South Warwickshire NHS Foundation Trust to carry out a benchmarking exercise to compare the costs of the Trust with those of other similar organisations.

The exercise was commissioned as part of the Trust’s Foundation Trust application process as  a number of its costs were appearing relatively low following the initial diagnostic undertaken by Monitor.

Our approach, completed within a 6 week period, encompassed the entire expenditure of the Trust, covering all services, both clinical and corporate/support services.

1. Data

Our Transformation Team requested a range of basic trust-wide information from the Trust, principally relating to costs, activity and quality of service performance of the Trust over the previous two years. We then undertook a focused benchmarking exercise, using comparators from our own benchmarking database consisting of over 130 Trusts and 40 PCTs. Our database covers most clinical and non-clinical services and functions.

2. Validation

We conducted structured interviews with all of the budget holders and key service managers within the Trust in order that we could gain a good understanding of the services being provided. It is vitally important that any comparative analysis is based on like for like comparisons and it is not unusual for the range of service provision to vary significantly from Trust to Trust. For example, a Portering service in one Trust may include Theatre, X-Ray and A&E portering, as well as providing security and transport services in addition to undertaking postal distribution, meal trolley delivery/collection, specimen and drug deliveries, etc. Whereas in other Trusts some or all of these services may not be the responsibility of the portering service, the costs of resources for providing these aspects of service delivery may feature within other departmental budgets. Establishing a good understanding of a Trust’s services is therefore imperative if the resultant analysis is to be meaningful.

3. Downstream Service Impacts

Our Team also examined the wider performance issues of the Trust in order to ensure that the services that were the focus of this review were not unduly affecting performance elsewhere within the Trust. For example, if we consider Portering services once more; any comparison of a portering service should include an examination of how this service is impacting upon areas such as Theatres. If the Trust’s operating theatres are kept waiting because there are insufficient portering resources, the Trust may be shown to have low costs but poor value for money. In this way, our benchmarking approach differentiates between cost and value for money.

4. Service Quality & Value for Money

In order to further enhance our understanding of the value for money position, our Transformation Team sought to establish a good understanding of the quality of service being provided by each service that was included within the review. As well as reviewing the latest audit reports, reviews and patient satisfaction surveys, our Team undertook some direct observations of the service quality, with the assistance of the client team, when required.

5. Comparative Analysis

Having established a suitable understanding of the service provision at the Trust, the levels of service being provided, the costs and quality of these services, our Team then undertook comparisons of this performance with that of other Trusts. Typically, we sought to identify around 20-30 Trusts that were the most comparable with the client organisation. Adjustments to the comparator information were made to ensure a like for like comparison and so that the results were presented to the Trust in its own “currency”, i.e. the benchmark Portering costs related to the type of Portering service that the Trust enjoys.

6. KPIs and Metrics

Our Team analysed the performance of each service against a range of differing performance metrics, as this enabled a better overall picture to be formed. Individual metrics can be misleading and often inappropriate, to turn to Porters once more, typically Portering performance is measured in cost/m², however, our approach enabled us to consider a number of additional measures such as the Portering cost in relation to outpatient activity, A&E attendances, Theatre activity, Radiology activity, Orthopaedic beds, Orthopaedic outpatients, total number of Trust beds etc. In this way the benchmarking analysis provided more meaningful results. Where all the performance indicators are pointing in the same direction, it provides a much stronger evidence base upon which the Trust’s management team can decide their future course of action. It should be noted that benchmarking and value testing are ultimately a subjective assessment of performance, due to the need to make the adjustments mentioned above. In that respect, our Team were always very careful to reinforce the limitations of the approach in all presentational material.

7. Report & Presentation

Finally our Transformation Team presented the findings of the benchmarking exercise to the Trust’s Executive Management Team. We received significant praise for the quality of the report, the analysis and the presentation, which formed the basis of the Trust’s financial planning for its first two years as a Foundation Trust and the Trust’s Foundation Trust application was ultimately successful.