Feature / Walking the service line

Is service line management the ‘must do’ initiative it was a few years ago? Seamus Ward discovers that it is still very much in play

A few years ago there was a buzz around service line management (SLM) in the NHS, though less is heard about the initiative these days. But rather than being evidence that SLM has been quietly dropped by the service, it is more a reflection of the fact that it is becoming a mainstream activity for providers.

SLM allows boards to devolve decision-making into business units, giving clinicians more control of services. Dashboards bring together performance measures and, when underpinned with patient level costing, can give trusts evidence of underperformance or opportunities for efficiencies, or even show where there is potential to expand services.

While trusts are not formally required to implement the initiative, it is generally believed to be the right approach. Monitor expects to see evidence of SLM in applicant foundation trusts, though it has stopped short of making it mandatory.

Like everything else in the NHS in England, it is difficult not to look at SLM in the context of the government’s planned reforms and the £20bn efficiency challenge. Certainly, speakers and delegates at a recent HFMA/Monitor conference on SLM were clear the initiative has a role to play in identifying efficiencies and in providing performance information to commissioning consortia and the NHS Commissioning Board.

NHS medical director Sir Bruce Keogh said some people in the NHS still ‘haven’t quite got’ the potential implications of the economic crisis. SLM offered a way of engaging frontline staff with the issues raised by the country’s economic problems.

‘SLM is a quite simple concept. It’s about sharing corporate benefit and risk of provision where you offer clinical services. The advantage of SLM is that it helps sort out the issue of ownership. When I see senior clinicians, they often say the trust won’t let them do something, but SLM helps people feel part of the trust and share the risks and benefits.’

Policy context

He described the policy context in which SLM will develop, including the NHS outcomes framework, which has five domains:

• Preventing premature death
• Enhancing the quality of life for people with long-term conditions
• Helping people recover from periods of ill health
• Ensuring positive patient experience
• Treating and caring for patients in a safe environment and protecting them from avoidable harm.

According to Sir Bruce, the NHS Commissioning Board’s structure could be based on these five domains.

The commissioning and outcomes framework will hold the commissioning consortia to account, he added. ‘At the detailed level it will inform commissioning guidance but, more important, in some respects it will also inform the development of a pay for performance-type tariff system and CQUIN.’

Recognising that new bodies may be established that would be interested in SLM data, Sir Bruce said: ‘We are beginning to think about the need to develop something called “clinical cabinets” – we shall have to think of a better name – which would have representatives from consortia and secondary care.’

There could be between 30 and 50 of these, based on the emerging PCT clusters. These ‘forums’ would not have the same powers as strategic health authorities but they would have teeth. They could have powers to veto changes in clinical pathways and they may also oversee major service reconfiguration.

Sir Bruce added: ‘Perhaps the most thorny issue is whether the clinical cabinets will have a major role, acting on behalf of the commissioning board, in authorising consortia.’

A picture of where SLM stands today came from King’s Fund senior fellow Catherine Foot, who outlined emerging themes from research that will be published in the autumn. She said there were huge variations in implementation and SLM was easier to implement for some trusts and service lines. ‘It is more challenging generally where there is less costing data and more complex patient pathways. Mental health is the obvious example,’ she said.

While some trusts had integrated service line management and reporting into other performance management processes, she said, some had not. ‘People talked about how important it was to devolve decision-making – it’s fundamental to SLR and SLM. But we found while that remained the vision of some senior people in a trust, it was rarely the feeling at service line level, particularly recently as control is being taken back to the centre.’

Other speakers agreed there was a danger of boards reversing the devolution of responsibility to clinical divisions in the current economic climate. However, they insisted their trusts were committed to SLM and saw it as a way of identifying and realising the efficiency savings needed in the NHS.

Further integration

Tony Whitfield, executive director of finance and deputy chief executive of Salford Royal NHS Foundation Trust, said the trust was by no means at the end of its SLM journey, but it was becoming more and more integrated into its processes and strategies.

Salford’s aim is true seven-day working. ‘This is going to be uncomfortable. The consultant contract and Agenda for Change are about Monday to Friday up to about 7pm and you have to pay people a lot more to work outside these hours. But it’s about staff engagement and how we talk to staff about the realities of the changing world – being open and transparent with people.’

Freeing up the board

SLM is facilitating that conversation by allowing the board to devolve decisions to the trust’s directorates, and by giving these divisions the means to identify and address issues. This frees up the board to set the strategy, which includes cutting costs by 15% over the next three years and committing to being one of the safest hospitals in the NHS – although insisting cost reduction does not come by cutting corners.

‘We told our divisions to work out what

this meant for them. People understand where their service model needs to be. If they are a high-cost provider, do they understand why?

Is the tariff the problem, for example?’ Mr Whitfield added.

Chris Calkin, finance director and deputy chief executive of University Hospital of North Staffordshire NHS Trust, describes SLM as an ‘eternal journey’. He said his trust’s SLM implementation is not as advanced as Salford’s. Nevertheless, it has developed a model to assess the ‘maturity’ of the management in its service lines – and thus their ability to take on greater autonomy from the board.

It has adopted a tiered approach, with service lines able to earn autonomy at three levels – ‘provisional’, ‘licensed’ and ‘advanced’. While a provisional service line will put structure and mechanisms in place under the board’s guidance and supervision, a licensed service line will have some core decision rights. Advanced service lines will provide assurance through consistent high performance on finance, quality and operational effectiveness.

It is early days for North Staffs and though service lines are operational, as yet no service line has been awarded additional benefits and rewards. But Mr Calkin hopes this will change soon. There are a number of areas where, once at the appropriate level, service lines will be able to make decisions:

• Finance (to purchase replacement items, say)
• Human resources (including decisions on overtime)
• Strategy (such as service expansion)
• Operational and clinical decisions (such as opening a ward temporarily to cope with an influx of emergency admissions).

However, Mr Calkin said a number of questions remained, especially in the area of consequences and rewards. ‘What behaviours are we trying to change? What performance are we trying to get out? Are the consequences sufficient? That’s something I am beginning to doubt,’ he said.

Of course, getting the benefits of SLM means doing more than installing new software and reorganising directorates into business units. David Melbourne, chief finance officer at Birmingham Children’s Hospital NHS Foundation Trust, warned that trusts have to look beyond these changes to the most important one of all – the engagement of clinicians in the initiative.

When he joined the trust around 14 months ago, it had implemented a ‘great technical system’ for SLM that allowed users to drill down to the performance of individual service lines, showing profit or loss down to the patient level.

‘Fundamentally, it looked pretty solid. But in hindsight some things were fragmented – 12 months had lapsed between starting and it being fully implemented. The initial clinical buy-in disappeared and there was a loss of corporate memory.’

Difference of opinion

General managers were convinced that the system was useful; clinicians less so. Training was also an issue.

‘I was shocked to find how few of our clinical leaders knew the difference between full absorbed costs and budgets. Many staff couldn’t see that SLM was relevant to their day-to-day work,’ he said.

The trust is now putting SLM at the centre of delivering its cost and quality improvement strategies. It is making the data more meaningful to clinicians, emphasising its passion for patient care and clinical education, and insisting the objective is to eliminate unnecessary cost, rather than lower costs for their own sake.

It is planning to measure service line contribution by analysing their public value. This could include their contribution to education and research and development, for example, and not just their profit or loss.

Other speakers also highlighted the need for education. Mr Calkin said North Staffs has a clinical leadership programme that has received excellent feedback and helped produce a groundswell of consultant support for SLM. Such initiatives could produce a new generation of clinicians well equipped to manage services using the information provided by SLM.

Monitor’s SLM focus

Monitor has developed a new tool to help trusts judge the extent to which they have implemented service line management.

Monitor policy advisor Kate Hall told delegates to the HFMA/Monitor conference on SLM that the regulator’s SLM framework focuses on four areas:

• Organisational structure
• Strategy
• Performance management
• Service line information.

The tool, which was subsequently made available on Monitor’s website, will score a trust’s SLM implementation on a sliding scale as follows:

1. limited implementation
2. established but not well developed
3. established and working well
4. SLM working well/best practice.

Ms Hall explained: ‘You can use the framework if you haven’t started SLM and, if you have started, you can use it as a self-assessment tool.’

She added that Monitor would not collect the results of assessments, although if organisations wished to share and discuss the results with the regulator it would be happy to help.

‘Few organisations have implemented SLM to its full potential. SLM is not a financial model – it supports changing the culture of an organisation and a shift in how a hospital is managed,’ she added.