Background

Following an earlier review of its Corporate Services, the Colchester Hospital University NHS Foundation Trust was keen to explore the possibilities for cost improvement with regard to a number of its Clinical services, as part of a wider programme to balance the Trust’s books.  Consequently, the Trust sought some independent benchmarking analysis that would help to inform the Trust as to how its services compared with those of other similar organisations from a financial perspective.

By way of background, Colchester Hospital University NHS Foundation Trust provides healthcare services to around 370,000 people from Colchester and the surrounding area of north east Essex. In addition, the Trust provides radiotherapy and oncology services to a wider population of about 670,000 people across north and mid-Essex.  The Trust’s £25m state-of-the-art radiotherapy centre at Colchester General Hospital became operational in June 2014.

In common with other Trusts across the NHS, CHUFT was keen to ensure that it achieved a robust financial position and that its cost improvement programme was both realistic and achievable.  Following on from an earlier successful intervention, the Trust now looked to support the Top 10 overspending areas within the Trust to ensure that all areas of potential cost improvement have been considered.  

The benchmarking exercise was conducted by GK Transformation and our report presented the outcome of the benchmarking analysis together with an assessment of the existing CIP plans and some additional suggestions. The review encompassed the Trust’s Top 10 overspending clinical service areas and specifically included:

Speciality

Division

Care of the Elderly/General Medicine Medicine
Emergency Med Urgent Care
Oncology Causes + Support Sciences
General Surgery Surgery
Trauma & Orthopaedic Surgery
Maternity Women’s & Children
Urology Surgery
Stroke Medicine Medicine
Dermatology Medicine
A&E                   Urgent Care

Methodology

This review sought to compare the costs of the Trust’s Top 10 overspending areas with those of other NHS Trusts. 

Data

GK Transformation undertook a focused cost comparison exercise, using comparative data from:

  • 130 Trust wide reviews (Financial Recovery Plans)
  • 865 Service Reviews

Our database covers most clinical and non-clinical services and functions. In total our database covers over 160 NHS Trusts, 38 Commercial Organisations and 8 Shared Services functions.

Validation

Through semi-structured interviews with the key service managers of those services that formed the scope of this review we gained a good understanding of the services being provided.  It is vitally important that any comparative analysis is based on like for like comparisons as it is not unusual for the range of service provision to vary significantly from Trust to Trust.  Establishing a good understanding of the services in question is therefore imperative if the resultant analysis is to be meaningful.

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.  Details of the comparator Trusts used were provided to the client Trust.  

Report

Finally our Consultant Team presented the findings of the review within a 150 page report, having been thoroughly validated as part of our ISO9001 accredited quality assurance system. Our report detailed:

  • Analysis of the current position
  • Outcome of the Cost Comparison Exercise
  • Practical Recommendations for Service and Cost Improvement
  • Recommended course of action together with outline implementation programme

Findings

The benchmarking suggested that if the Trust’s costs could be reduced to that of the average, a potential saving of 6% would be achieved. 

The analysis was largely based on the 2014/15 budget costs, although actual expenditure had been used where this was significantly different from the budgeted spend.  It was necessary to adopt 2014/15 due to the greater availability of cost and activity data amongst the comparator Trusts.   In a few instances 2015/16 budgeted expenditure has been used for this analysis, typically where the budgets have changed in nature.    

In establishing an estimate for potential cost improvement during the current financial year, it was therefore necessary to consider the 2015/16 budget uplifts, cost improvements already achieved and the level of overspending in the year to date.

The initial draft report was subsequently updated with an addendum following the feedback of the findings to each Division and that the addendum included a more detailed the estimate of additional potential savings for the 2015/16 and 2016/17 financial years.

Client Comments

The granularity of the work is excellent and the ‘post report’ advice is hugely valuable to enable implementation” Dawn Scrafield - Director of Finance Colchester Hospital University NHS Foundation Trust