11 February 2010
Tribal publishes white paper on the vulnerability of acute hospitals and how they can survive the next NHS funding period
NHS hospitals will become increasingly vulnerable but can make major savings and survive the NHS funding freeze without compromising patient care, according to a white paper published today by health experts at Tribal.
Tribal’s white paper, “Intensive care for acute hospitals”, explains how hospitals are particularly vulnerable in the next NHS funding period because of their acute economic pressures and fundamental changes to the way hospitals are being used.
Hospitals will suffer from critical changes in the price of the revenues they receive for carrying out clinical interventions, as set out in the 2010/2011 NHS Operating Framework. Changes to the way hospitals will be delivering services and the ‘brittle’ economics of hospitals add to their vulnerability, according to Tribal.
Providing care in an acute hospital setting is the most expensive for the NHS, and while the paper suggests hospitals represent a ‘comforting’ concept for many, their usage is rapidly being changed and reduced because it can often be cheaper and better for patients to:
- consolidate all the best care, knowledge and technology into specialist centres, i.e. for cancer
- deliver many treatments outside hospitals in a more local and convenient setting – at home or even in shops
It is widely agreed that the NHS must deliver between £15 billion and £20 billion of productivity improvements by 2013/2014 to meet the inherent pressures within the system. Tribal’s previous paper, “Industrial transformation in the NHS”, identified how commissioners could deliver half of these improvements through a range of best practice measures. The paper published today follows on to explain explains how the remaining half can be delivered by hospitals.
The NHS spends more than 50% of its total budget on hospitals and therefore a key focus for delivering a substantial part of the NHS target of £15-20bn productivity improvements by 2013.
As a result hospital revenues will come under increasing pressure from:
- price cuts – Tribal estimate that in real terms the ‘prices’ for hospital interventions will fall by more than 20% over the next three years
- reduced activity – as more treatments happen outside hospitals, revenues will be cut further
- rising over-capacity – hospitals will be under greater pressure from competition, especially as NHS tariffs - the centrally set prices for a wide range of acute interventions – will no longer be set after 2011
Tribal’s white paper looks at how hospitals can respond to these challenges at operational, tactical and strategic levels to make the required savings. At each level, Tribal has identified the key areas that hospitals must review to improve their productivity and make the required savings.
1. Operational
Hospitals must look at ways to significantly improve the productivity of their current business and clinical model, focusing on how patients flow into and through the hospital, from door-to-door, labour costs and the costs of failure and poor quality.
2. Tactical
Hospitals should flex their business and clinical model to improve the economics of how they function, for example re-balancing services and revenues to provide the most-needed treatments for patients and avoid high spending on areas of low need.
3. Strategic
Hospitals will need to consider redesigning their business and clinical approach to adopt new service models, including working outside their traditional boundaries and coming together to form networks with common management.
Kingsley Manning, author of Tribal’s white paper, said:
“The rise in activity and revenues for hospitals over the last decade has obscured a systemic failure to improve productivity.
“The recently announced changes to NHS prices combined with the rapid slow-down in the growth in NHS funding will inevitably result in significant financial pressures for many hospitals.
“However, the opportunities for improving productivity – for making savings without sacrificing clinical or service quality – are considerable, if clinicians and managers are prepared to take the necessary actions.”
Ends
Please contact us for a copy of this paper
About Tribal
Tribal is a leading public sector services company.
We provide service delivery, advisory and technology solutions focused on improving the quality and effectiveness of public services in the UK and internationally. Tribal’s core markets are education, health and government.
Our people are sector experts and we work in partnership with a wide range of organisations including schools, colleges, hospitals, local authorities, housing associations and government departments.
Tribal has approximately 2,000 staff and our work spans 40 countries across the world. Our charity, the Tribal Foundation, supports sustainable projects in the UK and developing world and is principally funded by staff donations which are matched by Tribal. Our website is www.tribalgroup.com.
For further information please contact Gemma Wilkie, PR & Media Relations Manager at Tribal on 020 7323 7216 / gemma.wilkie@tribalgroup.com or Epoch PR on 020 7401 8001 / tribal@epochpr.com. Out of hours press line is 07776 495 864.