Lean: Leeds lights up

The recent story of Leeds Teaching Hospitals NHS Trust has been one of improving finances, while delivering better care for patients and being leaders in costing and procurement. Its financial position is at a 20-year high and it is one of only five trusts selected to work with the renowned Virginia Mason Institute to improve services to patients.

While it would by no means claim to have all the answers – it faces some significant risks in relation to its five-year financial plan and capital development programme, for example – a lot of the trust’s gains have been built on a strong staff culture. The Leeds Way, inspired by staff, sets out the trust’s ambition to be patient-centred, fair, collaborative, accountable and empowered. Its goals are to: be the best for patient safety, quality and experience; be the best place to work; be a centre for excellence for specialist services, research, education and innovation; offer seamless, integrated care; and be financially sustainable.

Of course, many trusts have similar ambitions, but director of finance Simon Worthington (pictured below) says staff have taken the values and goals to heart.

‘For me, the Leeds Way symbolises the effort put in before I started here, when [chief executive] Julian Hartley joined, to engage with frontline staff and create the right culture.

‘This is a culture of patient-centred accountability. The goals and values are real – people talk about them. They say, “That’s not the Leeds way”, for example. It took a huge amount of effort, but you can feel the results when you walk around the organisation. One of the benefits of staff engagement is that people understand the challenges, but feel empowered to tackle them.’

Improvement method

The aim is for the Leeds Improvement Method – which the trust is developing with Virginia Mason – to underpin its work and deliver its vision of being the best trust for specialist and integrated care.

‘You can feel people’s desire to improve. When it comes to finance, there is a foundation of great work that has built over a number of years,’ Mr Worthington says.

He pays tribute to his predecessor (and former HFMA president), Tony Whitfield, for helping lay these foundations. ‘Four or five years ago the trust had an underlying deficit of £100m on a turnover of £1.2bn. But the trust worked away at the deficit and, through the work that Tony started, by 2017/18 it had gone from a deficit to a surplus by fully achieving the control total.’

Before Mr Worthington joined the trust, it had been looking at a deficit of around £22m for 2017/18. The trust’s control total target was a deficit of £14m, which the board had not signed up to initially. However, he felt the trust should be as ambitious in its financial targets as it was being in its operational dealings. The trust signed up to the control total.

‘It has paid off because we achieved a surplus of £18.9m after the final distribution of sustainability and transformation funds [STFs],’ Mr Worthington says. ‘We received an initial £23m of STF to give us a £9m surplus, but we overachieved by around £3m, so we received additional STF to bring the surplus up to £18.9m. It’s the biggest surplus the trust has had in its 20-year history.’

Moving into the post, Mr Worthington made a number of recommendations. One of these was to shift the thinking away from budgets to focus on the run rate.

But as well as changing how staff and budget holders viewed the financial position, he also wanted to change the language of savings programmes. ‘In Leeds, we talk about waste reduction where others might talk about cost improvement.’

This is important in engaging staff and in meeting a cost savings target of around £65m in 2017/18. Most of the trust services are managed through clinical service units (CSUs) – each led by a doctor (who is the accountable officer), a nurse and a manager. But in the first two months of 2017/18 all CSUs were rated ‘red’ in the trust’s performance management system and were 10%-15% off their planned financial position.

In his previous job at Bolton NHS Foundation Trust, Mr Worthington often spoke of the ‘art of making people bothered’ to go the extra mile to deliver efficiencies. Concerned that the size of the efficiencies needed, together with the position at month 2, would discourage staff from even trying to achieve the savings plans, Mr Worthington and his team looked for ways to reduce the savings needed at each CSU.

‘We looked at depreciation, balance sheet – all the things people haven’t necessarily talked positively about – and the savings needed from the CSUs came down by about £27m.

‘We also had some central reserves, so we put all of that out to the CSUs and told them about the technical stuff – we called it back-of-the-sofa money. They still had to deliver, but it was a much more reasonable amount.’

A revised CSU performance management framework focuses on monthly forecasts – if a deficit of more than 1% is forecast, the unit is categorised as red; between 0% and 1%, amber; and green for a forecast surplus. Within a short period of time, many CSUs were rated green.

Mr Worthington continues: ‘The framework is motivational and they are proud to see they can manage their financial challenge while delivering quality. At the end of the year, virtually all the CSUs were green, due to the smaller control target, the performance management framework and the real feeling of accountability and engagement.’

Waste reduction has been supported by the trust’s costing team – which won 2017’s HFMA Costing Award – and he again pays tribute to Mr Whitfield for developing a costing infrastructure that is now regularly helping teams to investigate their cost structures and come up with improvement ideas.

Day one reporting

He says the introduction of day one reporting played a big role in identifying issues before they became a big problem. This involves providing financial statements to budget holders on the first day of each month.

Mr Worthington is a long-time advocate of day one reporting, having implemented it at Bolton and now Leeds. ‘My contention is that if you can do it at Leeds Teaching Hospitals, there’s no reason why everybody cannot do it. It focuses people’s minds and it’s easy to remember the report will be there on the first day of the month.’

Setting financial targets is one thing, but delivering them is another. At the trust, efficiency programmes are underpinned by the Leeds Improvement Method, overseen by a Kaizen Promotion Office (KPO). This is a management programme that aims to deliver organisational improvement (see box). Improvements made as a result of the programme can lead to financial benefits.

Becky Vickers, clinical services manager in the trust’s neuro rehabilitation department, says the team has been able to increase sessions from fewer than one to three per week. One useful innovation was a people link/performance board, which has linked projects together, reducing repetition of work. Through the board, service challenges are transparent and targets are identified, together with the staff involved in addressing them and timescales.

‘This feels to me much more organised,’ she says. ‘I don’t need to repeat myself in communication as much and feel more consistent in the messages I’m giving to the whole team. Also, sharing ideas across the teams has been really inspiring for each other.

‘One big challenge remains – this is on my office wall and my teams are across all sites, so sharing it quickly and effectively is my next challenge.’

Ms Vickers believes that working out realistic targets – developed using Takt time (which reflects the rate of production needed to meet demand) – has helped reduce pressure and stress on staff and freed up time to engage in improving performance, using tools such as the 5S methodology and waste walks.

‘These and other service development have made us all more productive as a team,’ she says. ‘Developing greater confidence in my own abilities, the culture of my team and the direction of travel of the trust has been the best bit. I’ve loved linking with other people working at a similar level to me within other areas of the trust and with the KPO team, who have been extremely supportive.’

She adds: ‘There’s lots of other work we’ve done around making the culture of the ward more therapeutic, empowering healthcare support staff to support patients to do more for themselves rather than have things done for them. This has also had a big impact on patient outcomes and being ready for discharge and reduced demand on the physio team by making sure the right person with the right skills is doing the right thing at the right time.’

Mr Worthington says the trust is developing a system for measuring the financial impact of Leeds Improvement Method changes. And, while large-scale waste reduction programmes are important, often the biggest savings come from trained and empowered staff tackling day-to-day problems.

The ‘Finance the Leeds Way’ improvement plan has taken a programme management approach, getting a 2018/19 financial plan and a new five-year plan agreed by December 2017. The 2018/19 plan was modified when the control totals were published.

Finance efforts

The finance team has been engaging with the wider trust and patients – for example, finance staff joined a week-long effort to improve A&E – and generating ideas to make its own services better. It is also taking part in the Future-Focused Finance accreditation process, aiming to reach level 2 by the end of next year before progressing on to level 3.

‘Our mission statement is to provide the best finance and procurement services to support the delivery of patient care in the Leeds Way.

‘It’s important our people are involved, so we are encouraging them to become FFF value-makers. We had three or four and put out a call for others to step forward – we thought 15 expressions of interest would be good, but it was more like 30 who came forward.

‘They are now applying to be value-makers and that group will act as the finance staff development group – I’m excited about that.’

The trust is implementing the aligned incentives contract, developed in Bolton, and has agreed this with Leeds Clinical Commissioning Group and for NHS England’s specialised services contract.

Broadly, aligned incentives contracts move away from national tariff and share risk, giving providers a minimum income with incentives to reduce costs.

‘I think we are the first trust to do that with specialised commissioners and it’s given us lots of momentum for people to think about integration that works with the aligned incentives contract that do not work under payment by results,’ Mr Worthington says.

‘In 2018/19 the trust is looking to save £75.7m to achieve a control target deficit of £3.5m. If we do so, we will get £32m in provider sustainability funds [PSF] to get a surplus just short of £29m. Around £15m of that £75m savings comes from savings identified in the aligned incentives contract.’

One of the biggest risks in its savings plan is whether it will be allowed to set up a wholly-owned subsidiary to provide non-clinical services, including estates and facilities, procurement, clinical engineering and new capital developments. Other trusts in West Yorkshire, as well as other parts of the NHS, are also hoping to establish subsidiaries, but the planned move has attracted a lot of criticism locally, particularly from MPs.

As an NHS trust, the Leeds plan must be approved by the health and social care secretary. ‘It’s a difference between what you can do as a foundation trust without needing permission and what you must seek approval for as an NHS trust. It’s frustrating because it’s a substantial improvement opportunity,’ says Mr Worthington.

In its five-year plan, the trust is targeting a £45m surplus by year four (2021/22) – crucial if it is to move forward with planned major development of the Leeds General Infirmary site in the city centre. The project will cost £300m-£400m, with revenue consequences of £36m a year. The trust board wants an annual surplus in place to cover this cost. ‘There is a concern that if we don’t get the wholly-owned subsidiary through, we will be unable to earn the PSF and that will have an impact on our redevelopment plans,’ Mr Worthington says.

Despite this, with finances stabilising and a renewed focus on quality, Leeds Teaching Hospitals is looking to a brighter future.