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Case Study: Acute Healthcare

Acute 

Healthcare Services Provider 1

Appointed as Turnaround Director and latterly Chief Operating Officer

Background

  • The Acute Trust and the local health economy faced a considerable financial challenge over the spending review period to 2014/15
  • Cost reduction measures of around £22 million were identified as being required over the following four years
  • Small, challenged District General Hospital (£150m revenue)
  • We had identified a lack of accountability at the top level of the organisation
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Kingsgate’s strategy

  • Secure 2010/11 break-even
  • Increase financial grip
  • Increase speed of delivery
  • Clear accountability
  • Develop plan for 2011/12 based upon:
  • Prioritise front-line clinical services
  • Target minimum 30% reduction non-clinical pay costs
  • Increase productivity and value for money in clinical services – ‘good for patients: good for costs’

Key issues and requirements

  • 2010/11 CIPs £3m off target at September 2010
  • Deliver £9.4m in-year savings 2010/11
  • Further £19m savings required 2011-2013
  • £22m historic debt
  • Reduce workforce by circa 260 WTE

Phase I – Stabilisation

  • Increase grip and change of pace to immediately secure 2010/11 position
  • Immediately launched turnaround programme to deliver in year savings and two year savings plan
  • Conducted weekly reviews with Clinical Directors and Heads of Nursing across all clinical areas to ensure full buy in to turnaround process

Phase 2 – Planning

  • Ensured close integration of turnaround programme with on-going operations at directorate level to ensure sustainability of the plan
  • CEO led communications exercise – standard message delivered by a Director directly to each department

Phase 2 – Implementation and delivery

  • Implemented detailed plan to deliver £20m savings plan across 2 years
  • Move towards Trust sustainability
  • Greater external confidence in delivery

Results and achievements

  • Break even delivered 2010/11 (small surplus)
  • 2010/11 delivered £12.25m of cash releasing savings plan (8.5%) and financial surplus
  • 30% reduction in corporate pay costs
  • 38% reduction in clinical administration costs
  • 8% reduction in beds achieved through length of stay reductions
  • Delivered all access targets in 2011/12
  • Significant value for money improvements (for example: 7% reduction in nursing costs through skills mix and rota management – led by Director of Nursing)