A different way of tackling the NHS's financial concerns

When I first came to work in healthcare it was an exciting time in the improvement space in the NHS. I had been delivering CQI transformation in the private sector previously but wanted to apply this skillset where I felt I could add more societal value. At the time around a decade ago, colleagues of mine, Russ and Jason alongside our partners Catalysis were developing a CQI approach in healthcare after years of cost improvement work yielding short term but ultimately unsustained results. They saw CQI as an antidote to the problems the NHS has, including its financial sustainability.

It’s a view that I wholeheartedly share. I can only hope that, as they find out more about adopting a CQI mindset (through the gentle promptings of the NHS’s excellent IMPACT programme), our ICSs and Trusts quickly come to the same conclusion.

Let’s be clear; there are elements of traditional cost improvement that do work and that are absolutely still required in the current financial climate. Anything that can deliver an immediate bottom line financial return is to be welcomed right now.

However, such an approach typically lacks longer-term sustainability and rarely, if ever, involves taking staff on an improvement journey. That’s not great for organisational culture or staff morale, so it can be a case of two steps forward but one step back. This is where CQI can help; delivering cost improvement, longer-term sustainability and staff satisfaction. Several steps forward and not one back.

Rewind a few decades or so and you would have seen cost improvement or turnaround approaches being successfully deployed to take NHS organisations from a point of financial distress to relative comfort – or so it seemed.

Look closer however and you would have seen a focus on short term results and initiatives that addressed the symptoms of a problem, not its cause. You’d see staff morale falling because of reduced autonomy and from having to work in an environment with a perceived disproportionate focus on cost cutting.

You’d see ownership of these initiatives being surrendered to a central turnaround team, reducing ownership and accountability at the senior leadership level. And, almost inevitably, the combination of these factors would lead to an eventual deterioration in performance and possibly even safety and quality too. It’s perhaps no surprise that my colleagues felt the way they did after years of working in this way.

I think that, encouragingly, more and more senior NHS leaders do now believe that CQI is the right way to deliver improvements in quality across their organisation. IMPACT has played its part there. However, I sense that there’s still a significant proportion who don’t believe it can help improve their financial situation. This surprises me, especially when I compare this to my experience in the private sector. CQI (or its equivalent) was commonly seen as a vehicle for financial improvement.

I think the paradigm of ‘CQI doesn’t drive financial improvement’ is based on several misconceptions – namely that CQI is a fluffy staff engagement exercise, unable to tackle really big issues; that it takes too long to implement; that staff don’t have time for this and their business-as-usual work; and that it’s a tool designed solely to be used for tackling quality issues, not financial ones.

The reality is that CQI can be targeted at any issue within any aspect of healthcare delivery. It can be adapted to deliver rapid results and embedded into any organisation to become part of the fabric of business-as-usual. And by engaging with staff, CQI taps into the vast bank of evidence and insights they have about why things don’t work as well as they should, delivering more comprehensive root cause analysis than traditional cost improvement approaches ever can. There is a fundamental difference in insight gained when you compare five thousand staff all contributing to our understanding of what’s driving the cost base versus ten people performing a desktop analysis. This deeper insight will also then result in more robust interventions being deployed where they can have the greatest effect.

Some of the main drivers of financial underperformance within healthcare, especially post pandemic are rooted in a productivity challenge, which is inherently tied to the organisation’s day-to-day activities. The best way to access productivity gains is by getting frontline staff to work differently.

The problem here is that traditional cost improvement lacks a robust problem-solving approach. It’s tightly tied into the annual budgeting cycle, requiring senior executives to come up with their best ideas in a very small planning window before the new financial year. Those ideas are often underpinned by extensive (but potentially misdirected) brainstorming and benchmarking.

Centrally owned, it’s an approach that cuts leaders off from hundreds or thousands of staff who could be part of any improvement but are actually left feeling disenfranchised. This results in new ideas or processes that staff have no ownership of and which may therefore never take hold; all of which places a brake on an organisation’s potential improvement capacity.

The CQI work we do coalesces around a handful of vital considerations - aligning an entire organisation around several strategic priorities; creating an improvement culture; developing and role-modelling the leadership behaviours needed to support that culture; developing the management systems and processes that make continuous improvement a reality; and empowering staff to make the changes needed to improve how they do their jobs.

All of these help drive up quality but this is also how cost savings can be unlocked, particularly through that final point. This is where productivity gains emerge and where more patients are treated, more cost-efficiently.

We know this can work. Across 20 NHS engagements, we’ve seen Trusts make combined savings of almost £850 million at the same time as registering improvements in over 50% of their CQC domains. Through our links into the North American healthcare market (that my colleague Jason Parker wrote about here), we’ve seen this deployed at scale in some major institutions. At UMass Memorial, for example, where they’ve been championing the CQI cause for almost two decades now, they’ve delivered a significant financial turnaround worth as well as improvements in patient experience and quality. You can hear about their story from their CEO Dr Eric Dickson here.

For any organisation not yet tying financial improvement into quality improvement, I’d urge them to reconsider. With all the hard evidence of the benefits of CQI laid out in front of them and when considering the track record of more traditional methods, I’d be asking my CFO, “Why wouldn’t you use CQI to tackle your most pressing financial challenges?” It’s time to do things differently.