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Fad diet

The NHS needs to change its lifestyle if it is to manage the leaner times ahead

An illustration of a vacuum cleaner bag animated as a soup cartonThe company was started in 1922 by a professor in accounting at the university of Chicago. Management theory was in its infancy and the company built services in finance and budgeting; developing a reputation for providing expertise on organisation and management issues. The staff became known as 'management engineers'. Fundamentally, they were efficiency experts. By the 1930s the title 'management consultants' had been adopted and in 1950, the firm opened its first overseas venture, in London. In the 1970s, however, the Japanese emerged with new ideas on how to run a business and the company had to 'investigate' itself and conduct an 'in-depth' analysis of how it should move forward in changing times.

This brief history is of the firm of McKinsey, founded by James O McKinsey, and unless you have been living in Basra, you must know that McKinsey has been pronouncing on the NHS.

The company's report: 'How the NHS can save £20bn without really trying and still have a laugh' (or some such), commissioned by the outgoing director of commissioning, Mark Britnell (who has now taken on a new career as a management engineer), was disowned by ministers, disavowed by NHS managers and demolished by the press.

The McKinsey weight-reducing diet of soup made from the contents of a vacuum cleaner bag boiled in distilled water was widely thought to be too much. We all know that crash diets don't work and that what reduces thick waistlines to thin waistlines is a change in lifestyle.

In fact, the wheels came off the management engineers' bandwagon for this very reason. McKinsey was seen to be suggesting a pit-stop. However, to deliver the magnitude of savings it was claiming, a complete service was required.

So just what was all the fuss about?

Here's a potted version of McKinsey's £1.2m report:
1. Reduce the tariff to enable Strategic Health Authorities (SHA) and Primary Care Trusts (PCT) to push through efficiency savings.
2. PCTs renegotiate GP and provider arm contracts to drive down costs.
3. Deal with the range of productivity among GPs; the least productive GPs have only 77 appointments per week, while the average is 126. If the worst improved, the same number of patients could be seen by 3,500 fewer GPs, saving the NHS almost £400m a year.
4. Stop or reduce elective procedures that are ineffective (eg tonsillectomy), cosmetic (eg tattoo removal), have a narrow margin between risk and benefit (eg knee joint surgery) or where other interventions should be tried first (eg hysterectomy for non-cancerous heavy menstrual bleeding).
5. Reduce routine referrals to outpatient appointments.
6. Reduce variability in outpatient referrals.
7. Increase nurses' patient facing time
, eg the number of district nurses could be reduced by 15 per cent if the average number of visits increased from 5.6 to 6.6 per day.
8. Review how much of their time nurses spend with patients. Of the 25 minutes per hour acute and general ward nurses spend with patients, only 15 minutes is spent on "physical care" as opposed to "psychosocial care".
9. Increase clinical productivity. The least productive 10 per cent of doctors and nurses see a fifth of the number of patients seen by the most productive 10 per cent.
10. Increase the rate of patients treated as day cases. In some specialties, such as gynaecology and breast surgery, the rate could be increased by 40 per cent.
11. Reduce the variation in prescribing by PCTs. The amount they spend on prescribing per weighted head of population ranges from £85 to £192. If they all moved closer to the average (£151), they could save £600m a year.
12.Reduce spending on supplies by £1.9bn. For example, GP supplies could be 15 per cent cheaper if they used national procurement contracts and the NHS Purchasing and Supply Agency. In some areas of procurement, eg microfilming and waste, the NHS is paying more than 40 per cent over the odds.
13.Don't waste NHS space. Spare land and buildings can be sold to make £8.3bn and underused space should be put out of use to save £400m on heating and maintenance. Hot desk more. Cut the square-metre-to-bed ratio.

So, 13 ideas. Not new. Unlucky 13 for the NHS?

Each of the 13 is eminently 'do-able', but – and it is a big but – let's have a quick run through the list.

The tariff has already been cut by +3 per cent. As hospitals are paid on a 'what they do' basis, any cut in the tariff will force them to do more work – busting the local health economy.

Because of NHS funding cycles and professional resistance, the benefit of renegotiating any contract is always two years away and sorting out GP and nurse productivity means a fight with the BMA, RCN and (worse) Unison just before an election. As much as it needs to be done – forget it for now.

NICE has pretty well abandoned its attempts to disinvest in treatments that 'don't work'. In fact, tattoo removal is a good idea, if it gets a recalcitrant yob back into work, and tonsillectomies are good if they help early years kids to stay at school and keep up in the classroom.

Selling land and obtaining planning permissions take years. Local authorities are seldom sympathetic. 

Changing prescribing habits and referral patterns starts in medical school and works when care pathways are universally agreed.
Although these are 13 good ideas, they are irrelevant to the problem the NHS will be facing in about 450 days' time. How do we run the NHS with a £20bn hole in the finances? Answer: we can't. There will have to be a tapered entry into savings; a change in NHS lifestyle. If this doesn't happen, stand back and watch waiting lists' waistlines explode.

It looks to me like McKinsey is back where it was in the 1970s. The credit crunch means we need new ideas and the company should conduct another investigation into itself with an "…'in-depth' analysis on how to move forward in changing times". When it finds out perhaps it will charge us another £1.2m to tell us how to do it.

The Author
Roy Lilley is a (sometimes controversial) healthcare author and broadcaster.

20th October 2009

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