5 Realities Of Cost Improvement Planning In The NHS

With the challenge of increasing demand and reducing resources, cost improvement plans are a key area of focus.  Having spent over 15 years working in the NHS and preparing various cost improvement plans, I know how challenging this can be.

Looking back on my own experiences and taking account of the economic landscape, what are some of cost improvement planning?

Reality 1: All The Easy Stuff Has Been Done

People often talk about low hanging fruit.  This is the so called easy to do stuff.  In reality all of this easy stuff has been tackled.

Reality 2: There Are Only A Few Things That Have A Big Impact

Yes it might be tempting to go for a big list of really small things and of course you want everyone looking out for those opportunities as they carry out their work.  At the same time if we take an acute hospital there are a few things that have a significant impact in my experience.  One is the number of staff employed.  Another is the number of facilities you provide services from.  A third is how effective you are at getting people through the system.

While there are a few other significant areas, it is often better to focus on things that have high impact, even if they might be difficult.

Reality 3: The Desire Has To Exist Across An Entire Health System

Everything is interconnected. While individual organisations might have their own targets and duties, the whole health system needs to have the hunger and desire to make the best use of financial resources.

Reality 4: There Has To Be Open And Honest Discussion

Income is generated and costs incurred as a result of providing services.  While it might be tempting to think that you can change the way everything is done and still do the same with less resources, it is probably not reality.

Reality 5: Finance Cannot Do It In Isolation

The reality is that the proportion of money spent directly by Finance is miniscule in terms of an NHS organisation’s expenditure.  While Finance can play a huge role in supporting, analysing and advising, achieving success requires commitment throughout the organisation.

The Bottom Line: Tackling cost improvement planning needs a very different approach given the size and scale of the challenge faced. What’s your view?

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