Feature / Visual stimulation

A visual approach to project management and monitoring is at the heart of successful cost reduction for a specialist orthopaedic foundation trust. Steve Brown reports

When NHS chief executive Sir David Nicholson first quantified the scale of the productivity challenge facing the NHS at £20bn – the so-called Nicholson challenge – it was a deliberate shock tactic. The intention was to get people completely focused on this unprecedented requirement to improve efficiency.

Now the £20bn figure is so well used that it has lost some of its shock value. But the underlying challenge has not changed. It is often translated as meaning a 5% cost improvement programme (CIP) each year – a level that exceeds recent achievements.

Foundation trusts – often seen as the highest performing NHS providers – managed an overall reduction in operating costs of just 3.9% in 2010/11. And the plan for 2011/12 was 4.4% – at the time of Monitor’s last quarterly report the sector was falling short of this.

For those who think 5% is a stretch too far, experience in Birmingham might make them reconsider. ‘All the latest thinking seems to be that over 5% CIPs can’t be done,’ says Stephen Bloomer, director of finance at the Royal Orthopaedic Hospital NHS Foundation Trust. ‘But it can be done, because we’ve done it. And we’ve achieved over 5% for the past three years.’

He does add one caveat – this level of savings cannot be achieved indefinitely. The simple but key message from the specialist provider is that future savings have to be planned.

Just two days into the current financial year, the trust was able to report that it had already delivered 3.8% of its 5.4% CIP. How? Because it spent the whole of last year working on its CIPs for 2012/13, alongside its 2011/12 programme.

‘We’d never done this before,’ he says. ‘We’d always focused on the current year. But this fire-fighting approach to cost improvements won’t be enough to hit the savings we all need to make. We have been guilty in the past of being overambitious in the design of CIPs and then thinking they can be achieved in a matter of minutes. Perhaps this is the same for the wider NHS too.’

Mr Bloomer believes the Royal Orthopaedic is ahead of the curve because its burning platform came three years ago. Changes to the market forces factor (MFF) calculation in 2009/10, coupled with ‘sizeable changes’ in the orthopaedic tariffs and a recent decision to partner with a private provider (increasing its number of sites and its operating costs) had contributed to increased financial pressure.

‘On top of this our local commissioners were looking to take work out of the system, and they were looking at things like hips and knees,’ says Mr Bloomer. ‘We were talking about 10% of our cost base or more than £6m on a turnover of around £70m.’

Some of the pressures – the MFF changes, for example – were phased, but even so the challenge was significant.

Mr Bloomer says that at first the trust met some of its CIPs through income growth – a common approach to delivering ‘cost improvement’ used in the NHS. But as the overall NHS pot is constrained this will no longer be an option.

And income growth is not always a bonus. For example, in 2010/11, the trust’s income grew by just under £2m. But at the same time operating expenses increased by £4m – fuelled by an increase in specialist work, much of which the trust says is undertaken at a loss.

However, the trust now claims it is meeting CIPs with real cost improvements. ‘In 2011/12, we did less work, incurred less cost and delivered that above our surplus [£1.7m compared with a planned £1.1m],’ says Mr Bloomer. The key to this improvement has been the adoption of Lean management techniques and a very visual approach to performance reporting and monitoring through a programme management office.

‘As deputy director I’d seen us put money into certain areas and not always seen a lot of change,’ says Mr Bloomer. ‘When I took on the director role, I persuaded the board to support a Lean approach. We started with theatres – our engine room. All the modelling said there was enough money to run 100 sessions a week, but we were spending more than this doing just 85. It didn’t make sense.’

Supported by Lean consultants from specialist firm KM&T, including ex-Toyota veterans providing a manufacturing perspective that Mr Bloomer was keen to harness, the Lean programme kicked off.

Lean is an improvement technique that looks to improve flow and eliminate waste – in short getting the right things to the right place at the right time. For the Royal Orthopaedic, this meant getting patient flows right.

Perhaps the single biggest direct change was introducing twin theatre working – using a single anaesthesia team to support two theatres. The initial work in theatres saved a relatively modest £500,000. ‘Perhaps more importantly we learned a lot,’ says Mr Bloomer. ‘ We got a huge amount of data and this was the “eureka moment” for us.’ In fact the trust has drawn on this initial data and work to provide the ideas for years’ worth of CIPs.

Further work has been undertaken around wards but the underlying philosophy, a result of the initial external support, has been to be self-sustaining. ‘I wanted to get people in their own areas to find solutions to their own problems. They have to be the ones implementing and monitoring the results.’

Office rules

To support this the board backed the creation of a visual programme management office (PMO). This is not a staffed central team but literally what its name implies – an office where the trust’s efficiency programmes are discussed and their progress monitored. There are no PMO staff per se, although there is a budget available to fund training, external support or back-filling of staff. Mr Bloomer acts as programme director.

While the PMO started off handling just a selection of the trust’s efficiency projects, it now handles all of them, including change management projects, quality improvement work and efficiency initiatives. Each project displays its control information on a wallpaper sized strip on the wall. There is deliberately no IT allowed with Mr Bloomer preferring a ‘Blue Peter approach’. This display provides an at-a-glance window on the project status using a standard approach involving six consistent control documents.

With about 50 projects currently ‘in the room’, the real difficulty is fast becoming one of display space. The trust is looking at developing satellite PMOs. It has set one up for physiotherapy, which is overseeing about eight schemes that are then reported in summary form in the main office.

The main PMO also hosts two formal meetings a week – one for the project leads, one for the executive leads. The meetings are short. Each project lead gives a short update and shares problems. ‘If they need help they can ask the room,’ says Mr Bloomer. ‘We’ve got nurses, managers, theatre operatives, outpatient teams – the whole spectrum – and this helps leads to build networks. If there’s a block we unblock it. If it needs senior input I take the issue away and provide central help.

‘We coach them, ask them if they have thought about certain techniques. We don’t give them the answers, we just try to create a positive environment where people can open up. That allows me to assess where we are on most projects.’ The executive meeting is then an opportunity for frank discussion and for Mr Bloomer to challenge executives on progress.

This group approach has replaced traditional individual meetings and performance discussions. ‘The message we are keen to deliver is that this work – service and productivity improvement – isn’t in addition to your job; it is your day job. The PMO is there to help you do your job better, not performance manage you.’

Last year the overarching focus was on scheduling. In fact a discussion started in the PMO led to a project to map out the patient journey – an initiative that has provided key information for improvement projects that will be taken forward over the coming three years.

Discussions have also led to many ideas for improvement work. One of these schemes involved a bone infection unit. With patients typically spending five to six weeks on ward after surgery, the trust has long wanted to find ways to discharge patients earlier and support them at home, improving care for patients and providing financial benefits. However, the demands of the drugs regime and need to dress wounds have made this difficult to operate financially.

Big prize

But a project led by an infection control nurse, supported through the PMO, has finally made this happen – a trial saved 1,600 bed days in just five months. The scheduling work and bone infection project have paved the way for the trust to achieve its big prize – closing the additional offsite unit and saving £2.5m.

As many have found, the trick to successful change is getting staff buy-in. And the visual approach taken in the Royal Orthopaedic ’s PMO works well. Mr Bloomer believes it has potential for any organisations looking at large numbers of efficiency or clinical improvement projects. The PMO toolkit is ‘easily deployed’ and the set-up has been showcased to other organisations with positive feedback.

The trust’s PMO is still a work in progress. Despite its successes, Mr Bloomer is keen to increase clinical involvement, particularly for research and development and to use the PMO as a shop window for unions, staff and patient groups to participate in projects.