When is a saving not a saving?

Smoke and mirrors are key to enabling NHS finance treatments that keep the show on the road. These treatments are at best plaster bandages stuck over gaping haemorrhaging wounds threatening life and limb.

These include: “controlling” cash flow, uplifting estate values, STYs – Selling To Yourself, and STFs – Special Trap Fund strategy – all to balance the mother of all spreadsheets at the centre. 

Then there is the concept of saving that needs its very own financial treatment.

The list of savings misdemeanours is long. I cannot be the only one irritated by articles describing initiatives and innovations that have saved the NHS millions. 

Here is an example of an NHS England statement posted on BBC news in January 2019. The essence is correct, describing how missed GP appointments add to the stress on staff and patients, but then you get this thrown in:

“NHS England said each appointment cost an average of £30 and the overall expense of patients not cancelling appointments could pay for the annual salary of 2,325 full-time GPs.”

And in April 2019 we get this:

“NHS England said that represents close to £40m in time saved, as the average cost of an appointment is £30.”

This is straight-forward false accounting. 

How do three unattended appointments per day, scaled up nationally equate to an opportunity lost to pay for 2,325 GPs?

Is NHS England suggesting a fantastical accounting treatment whereby they scoop up all the unfilled appointments, remove bits of GP surgeries, remove related posts linked to those unfilled appointments, and spend the money “saved” to buy 2,325 GPs?

Presumably recruiting them from Narnia, using those magic savings. 

General practice gets paid for that appointment slot, missed or not. It is a waste for the clinical commissioning group and taxpayer.

It is a frustration for the GP, assuming they do not look forward to the “slack” afforded in already busy clinics. Slack needed for the more complex patient, or a moment to take a breath and empty the bladder.

Whose money is it anyway?

The hospital context is different. A recent NHSE statement on missed hospital appointments illustrates the point:

“Almost eight million hospital appointments were missed, or ‘did not attend’, in 2017-18, according to the latest figures. That does not include appointments cancelled in advance by either the hospital or the patient. With each hospital outpatient appointment costing the NHS approximately £120, that could mean almost £1bn worth of appointments were missed, equivalent to 257,000 hip replacements or 990,000 cataract operations.”

Use of an app that improves information flow, reducing administration and postage costs could apparently deliver £50m in savings for the whole NHS.

This could be a real saving, assuming due diligence on the maths, and scaled up use of the technology; we stop spending on something – including people – removing jobs no longer needed. 

There is a revenue difference with hospitals, at least as long as payment by activity rules apply. When patients fail to attend a hospital appointment, typically the hospital fails to secure that income from the CCG. 

Marketing savings

Consultancy firms often declare how much better the NHS could/should schedule clinics and theatres etc and save millions in the process. Their work is important, but it does not, will not, cannot save the NHS money. 

Nothing is stopped. No wards are closed. No posts are removed. Perhaps they mean saving on a predicted cost pressure that is avoided.

I do not recall board finance papers having a table describing cost pressures avoided. It is not a number in the account ledger

If we make better use of theatre capacity (more cases per session – increased productivity; more cases per staff salaries – increased efficiency), the provider can seek extra revenue from CCGs (income, not saving).

If more productive and efficient, we would not need to spend money on buying additional capacity.

Only if management consultants said any of that instead of claiming their ideas could save millions, but they do not. I do not recall board finance papers having a table describing cost pressures avoided. It is not a number in the account ledger. 

Honest language 

There are only so many ways to describe cost effectiveness regardless of service, public or private sector:

• Cash releasing – stop spending money on goods, services, and people

• Productive use of assets – more patient care/hour

• Efficient use of assets – patient care/less pounds/waste removed/improved quality

• Cost pressure avoidance – you thought you needed more of something, but now you do not 

A recent award-winning initiative claimed productive and efficient use of assets, and cost pressure avoidance (they do not need the additional beds they thought they needed). But in this case the only and really meaningful saving is lives and disabilities avoided. 

Trust board papers and consultancies need to describe cost improvement work using standard terms, so Joe Public can stop assuming that the NHS is riddled with bureaucratic overhead waste and everything is a saving that releases cash to buy more hip replacements.

These basic concepts should be understood by doctors. They might begin to act more strategically, responsibly and thoughtfully when seeking to spend increasingly limited resources as a result.

How about an interview question at the consultant appointment panel – tell us when you delivered a more productive, efficient, cost pressure avoiding, cash releasing initiative – with numbers please?