Using runners to find patients and paper-based records may sound Victorian but practices like these are common in the NHS where outdated management wastes more than £2 billion a year.
At most UK hospitals, there is only one sure way to find out how many beds are free at any given moment, or where an individual patient is: send a runner round to find out. Cost: £150,000 a year. At the same hospitals, admissions staff are taking patient details on paper, a process lasting five minutes, which six or eight clerical staff will then enter, sometimes several times, on a computer. Cost: £110,000. Outpatient appointments are made centrally and co-ordinated by phone and paper with individual clinics. Because of error or misunderstandings, 12% of outpatient appointments are missed. Avoidable cost: £60,000. At any one time, 25% of patient case note files are not on the shelves and have to be hunted down manually.
Cost: £40,000. Waiting list data at most hospitals is processed manually.
Cost: £20,000. Staff turnover among NHS clerical workers (excluding nurses and doctors) is often 20% or more. Cost of recruitment and training: £25,000.
Information is a huge area of waste. Because case notes are so often missing, x-rays and laboratory tests have to be duplicated. Cost: £700,000.
Waiting for test results or a doctor to sign discharge papers (most patients spend longer in hospital than they need to or want to). Avoidable cost: say, £750,000.
Most hospital procurement systems add cost rather than value. Most hospitals have too much inventory, bought at too high prices. Avoidable cost (for administration and materials): £1.5 million.
Sounds fanciful? Not a bit of it. Well-documented (and non-exhaustive) figures from the Audit Commission and other sources suggest that a typical NHS hospital trust could save up to £3.5 million a year in direct costs, or 7% of total budget, by better management of basics: people, processes and supplies. In back-of-the-envelope figures, that adds up to £1.5 billion for the NHS as a whole. And there is more. In a survey of community trusts, the Audit Commission found that more effective information management would also release £1.2 million worth of clinical time to be spent on patients rather than on paper. The same is true for hospitals, which are bigger and more complex - so a highly conservative total under this heading for the NHS would be £650 million. By now we are well over the £2-billion mark in terms of wasted resources. Summing up and putting it round another way, managers at the very few hospitals which have transformed their processes along classic re-engineering lines estimate that doing the same thing throughout the NHS would increase throughput by 20% and improve quality as experienced by the patient by at least the same amount - with very little in extra resources.
Nor is this all. It's a remarkable fact that much medical treatment rests on skimpy scientific evidence. For long-term conditions such as prostate cancer, no one knows what the best treatment is. More strikingly, according to a former government medical adviser, less than 15% of health-service intervention has been proven to work. For only two of the 10 most-frequent NHS operations - hernia and cataracts - is there general agreement about which patients will benefit and how and when they should be operated on.
There are huge variations in even simple treatments between towns and regions. When the incalculable cost of doing too many of the wrong operations, and the opportunity cost of not doing enough of the right ones, are added in, the conclusion is inescapable: despite griping over resources, the greatest opportunities for improving our down-at-heel health service, and a prerequisite for new resources to be released, lie within its own management. 'The UK is one of the few countries left in the world providing a free, comprehensive health service. I think we can sustain that for at least another generation by using the money we've got to better effect,' says one NHS manager.
As the foregoing suggests, the NHS is full of paradox. One of the biggest is that hospitals make little or no difference to overall public health, which depends much more on lifestyle factors - tobacco and alcohol, living conditions, employment - than medical treatment. As a consultant notes cynically: 'Medicine is the art of entertaining the patient while nature takes its course.' Almost all ill-health episodes are self-treated or dealt with by a GP, with only a tiny fraction referred to hospital. Yet two-thirds of the NHS' £35 billion budget - around 10% of all public spending - goes on hospital and community trusts. While governments everywhere are struggling to shift the emphasis of healthcare from cure to prevention, popular preoccupations obstinately refuse to follow. For the individual, hospital is where life begins and sometimes ends, the theatre of some of the most important episodes of their life. For most people the health service is hospitals.
The ageing of the population, technological advance and rising expectations will continue to keep hospitals the pressure-point of the system. From the point of view of both best use of resources and the quality of life of the individual, therefore, there is urgent need to improve the civility and effectiveness of the NHS's greediest sector. But while opportunities for substantially improving the running of these health factories are evident enough, actually grasping them is frustratingly difficult. One reason is that, while objective assessment of clinical outcomes offers outstanding promise in the long term, developing 'evidence-based medicine' - a solid body of knowledge about what does and doesn't work - will take time. Although the establishment of the new National Institute for Clinical Excellence is welcome, there is as yet no counterpart for health management.
A 1997 study by Bradford University's European Centre for TQM found wide variations in management practices and standards among NHS trusts. However, because trusts tended to consider their own circumstances unique, they also tended to ignore opportunities to learn from others.
Improving the NHS's ability to learn from itself is crucial for the long-term health of the service, as two examples will show. Take, for instance, the slow revolution (not too strong a word) in hospital services pioneered at institutions such as Addenbrookes in Cambridge, King's Healthcare in South London and the Leicester Royal Infirmary (LRI). Some remarkable results have been achieved by rethinking the way services are delivered to the patient. At Leicester, the typical outpatient process has been re-engineered, bringing an elapsed time of weeks or months between first consultation and discharge down to days and just two patient contacts: typically a consultation plus tests plus pre-op (where one is necessary), and the operation itself. At the pre-op, the patient is given a firm discharge time and even advance discharge papers. The patient arrives an hour before the operation to be met by the same nurse who briefed them at the pre-op and who will greet them when they wake up. They leave at the pre-arranged departure time unless there are good medical reasons (spelled out on the discharge sheet) why they should not.
As well as being a vastly more reassuring experience for the patient, the streamlined process yields dramatic gains in hospital productivity, staff satisfaction and clinical quality. Says Jonathan Anscombe, vice-president of consultancy A T Kearney, which was heavily involved in the Leicester programme: 'Quality improvement, throughput improvement and hence better cost performance go hand in hand.' As with quality in a manufacturing process, focus and high volume make for repeatability, hence better clinical performance. In medicine as elsewhere, practice makes perfect. The majority of Leicester has now been re-engineered in this way, and with similar results. Its outpatient departments are treating more people better. Its process improvements have also enabled it to absorb an unprecedented increase in accident and emergency admissions over the past two years without increasing headcount.
No one should underestimate the effort and energy needed to make this kind of root-and-branch change - the more so since the switch from a producer to a patient-oriented process is a culture change which challenges 400 years of medical education and organisation. 'A hospital isn't like a big business,' says Anscombe. 'In a business you can do it once. Leicester has 300 outpatient clinics, each one different, each needing to be re-engineered separately.' To Anscombe's regret, the disproportionate effort involved means that most hospitals won't be able afford consultancy help.
After Leicester - where it was essentially underwritten by government - Kearney no longer markets actively to the NHS. Gemini Consulting, which worked in a similar capacity at King's Healthcare Trust in South London, has also disbanded its healthcare team.
In the longer term, pace the consultancies, this may not matter too much.
Helen Bevan, who until recently led the Leicester programme, believes strongly that LRI-style improvement is repeatable all over the health service. 'It's a mistake to concentrate on the solutions - what matters is the process,' she says. 'The change methods we used, focusing on problems with teams of clinicians and managers, are very widely applicable.' She points to a series of self-help initiatives which are springing up around the NHS. Some of them are extremely ambitious. The Buckingham Partnership Project, for instance, is aiming to re-engineer patient processes not just within a hospital, as at Leicester, but across primary and community care as well.
Building the NHS's own capacity for continuous improvement is in the long term as important as any medical advance. One area where outside expertise could exert real and urgent leverage, however, is procurement and supplies. NHS trusts spend £4.5 billion a year on supplies in a fashion which is untouched by recent developments in supply chain management. In theory, the NHS procurement operation, NHS Supplies, should be able to exert central buying power but some individual hospitals do better than the central-buying outfit. In 1995 the Audit Commission estimated annual savings through eliminating the wilder variations in supply performance at £50 million a year, with a one-off bonus of a further £50 million by reducing stockholding. Anscombe believes that vastly underestimates the potential. While not all expenditure patterns can be changed in the short term, he says, Kearney's experience is that it's fairly easy to save 10% of 'addressable spending', say, two-thirds of the total. In the NHS' case that would be £300 million, 'and that's pretty conservative.
If you do it really well,' says Anscombe.
The importance of the NHS's relationship with the private sector comes into even sharper focus with consideration of the next frontier for the NHS, which is computers. As the year 2000 problem demonstrates, all IT comes with a heavy and sometimes unexpected overhead, and it needs to be treated with realism. Leicester's improvements, for example, were all achieved by restructuring underlying processes and information handling, with little spending on IT. Without the fundamental rethinking of the processes, the old computer adage, 'garbage in, garbage out', continues to apply. Yet, as the NHS's new information strategy Information for Health makes clear, the health service has an enormous amount to gain, both strategically and tactically, from well-implemented computerisation.
Eliminating the non-value-adding clerical work is the trivial bit. As anyone who has worked in it is prone to lament, although the NHS is awash with data, little of it is any practical use. Thus, however well-known to the local GP, woe betide the patient who falls seriously ill outside office hours or in a strange town. The physician attending him or her will have to make a treatment call without benefit of the GP's handwritten medical record, which will arrive days later, by which time the patient may have been moved again. Even in well-organised hospitals a quarter of current records can't be found when they are wanted; in the worst cases each department keeps its own records, each incompatible with the others.
Leaving aside the futuristic visions of telemedicine, electronic details, available 24 hours a day across the NHS intranet, would undoubtedly save time, effort, duplication of tests, tension, error and lives. It would spare patients time and stress, and free up huge amounts of time for clinicians to spend on their proper job.
In the longer term, computerised records will speed up the process of scientific discovery and holds out the promise of better medical decisions and outcomes. At present, a paper-based clinical audit - finding out how many people were treated in a certain way and what the outcomes were - can take months. When records are coded and cumulated, it will be a matter of hours. Many people believe that this will be the biggest leap for NHS medicine since its foundation, not only weeding out worst practice but effectively making research and clinical improvement part of every doctor's work.
As at Leicester and Addenbrookes, the benefits of good modern IT systems are beginning to become visible at a very few hospital sites. Two of them are the Royal Marsden, London, and Aintree in Liverpool. The Marsden, chosen as the location for the launch of the new information strategy, already uses electronic patient records, the latest development by an in-house IT department which has spent 20 years building computer systems in parallel with the hospital's cancer research. Says Jo Milan, head of the IT team. 'We track details of 50,000 patients in 50 studies. We couldn't operate without computers - they are part of the infrastructure.'
Although Marsden clearly indicates the benefits, very few NHS trusts have maintained the IT capability to build a similar system in-house.
They are more likely to follow the course adopted by Aintree, which is in the later stages of rolling out a new £2.5 million integrated system bought from a small UK company, System C. The system has already replaced five of Aintree's old non-integrated systems and will eventually take out seven more. This is not untypical. The Audit Commission found one acute hospital which had 40 independent computer systems, none of which talked to any other. Aintree is now in the process of evaluating the great time and quality benefits the system is generating - benefits which, says Markus Bolton, System C's managing director, need managing and planning for. 'Benefits don't just happen as a matter of course,' he says. 'They must be identified in advance - otherwise how do you know you have achieved anything?'
If computers are so important for the health industry, why aren't they in place already? The answer is that computers in the health service are a notorious black hole, an almost unmitigated disaster, for reasons that will have an important bearing on the results of the new strategy. Fundamentally, in the very reverse of the relationship with the drugs companies which has supported the development one of the most powerful pharmaceutical industries in the world, the NHS has destroyed the health IT market. The starting point was a disastrous series of investments in overambitious centralised computer projects, including the London ambulance system, the Wessex Health Authority and the well-named HISS - the Hospital Information Support Systems Initiative whose cost ballooned from £2 million to £100 million with little useful result. There is still some doubt over the viability of one of the central elements of the new strategy, a clinical coding system which has so far cost more than £30 million to develop.
The Treasury was right to conclude that, with rare exceptions like the Marsden, the overall level of IT expertise in the NHS is depressingly low (it remains an important issue for the new strategy). However, the central vetting procedure it then imposed was so fearsomely bureaucratic that it effectively brought NHS computer procurement to a halt. In a litany of criticism, the Audit Commission found that central 'guidance' was more likely to deter buyers than help, some trusts were spending nearly half of their IT budget on the procurement process itself, and there was such emphasis on satisfying the regulations that some users never got round to evaluating whether the system they were buying would actually work.
Not surprisingly, some of the big suppliers - notably IBM, ICL, Andersen, Digital and Concurrent - promptly exited the market, and those that remained had little incentive to invest in upgrading or adapting systems which had usually been devised for the very different US market. Dealing with the NHS was such a nightmare that companies were determined to squeeze as much out of every order with as little extra effort as possible, one former supplier reported - thus practically guaranteeing adversarial, abrasive relationships with the buyer. The final straw was the market-led reforms of the early 1990s. These unleashed a blizzard of forms between purchasers and providers and completed the alienation of clinicians, who (as the new strategy acknowledges) concluded that computers in the NHS had nothing to do with patients and medicine, and everything to do with administering the hated health market.
As the welcome from the health professions for the new information strategy shows, that particular tide has turned. The combined potential of restructuring patient processes and computerising the information that powers them is so great that only the bitterest medical cynics would not want to give it a try. But that's not the case for the 'supplier community', which will need some convincing that there's anything in the NHS market for them. An outbreak of trust and good relations is badly needed. If the good news from Marsden and Leicester, Aintree and Addenbrookes is about the excellence that is possible in the modern NHS, they also indicate the huge distance the service as a whole still has to travel. If the new information strategy is met, just 35% of acute hospitals will have reached the stage that Aintree is at now at by the year 2002.
Only the most blinkered observer would claim, as the Daily Mirror did at the 50th anniversary celebrations this years, that the NHS is today 'the envy of the world'. It is not. It is cost-effective and adequate.
But compared with the best it is under-invested, brusque and inflexible.
Its institutions, and particularly hospitals, are too hard pressed to deliver the personal quality worthy of a civilised society. To get the full benefits, the NHS needs to pay attention to building a corpus of evidence-based management, as well as evidence-based medicine, building on the strengths of both the public and private sectors. It should be treated as a national emergency.