The Quality Opportunities & Challenges in the Implementation of Managed Service Contracts

Transcription

1 The Quality Opportunities & Challenges in the Implementation of Managed Service Contracts Ian Rothnie BMS4/Laboratory Manager Clinical Biochemistry NHS Grampian

2 1. NHS Finances 2. Budgets 3. Managed Service Contracts 4. Personal Experience

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4 Why should you be interested? When nurses become more engaged with finance and more involved in management, they bring about a significant difference to the quality of patient care

5 NHS Scotland Finances

6 Arbuthnott Formula Introduced in 2000 replacing SHARE formula to allocate funding to NHS Boards across Scotland with 70% of NHS funding to Boards is allocated in this manner. Refined in 2009/10 and replaced by Resource Allocation Formula

7 Resource Allocation Formula As in most resource allocation formulae, the main driver is the population size of each area - the more people you have, the more resources you will get. Adjustments are made to the base population of each area to account for: The age/sex composition of the population The relative additional needs due to morbidity and life circumstances (MLC) and other factors The relative unavoidable excess costs of providing services to different geographical areas

8 What are budgets? Money in s Staffing in Whole Time Equivalents (WTE) Activity in workload measures The NHS Budget Holder's Survival Guide - David Bailey

9 What are budgets cont.? A budget is a detailed statement setting out anticipated expenditure and income, normally for a 12-month period. Once an organisation has set its overall strategy and its service and financial plans, these need to be translated into a budget. Setting a budget in this way will ensure that resources are allocated in line with the organisation s aims and objectives. The NHS Budget Holder's Survival Guide - David Bailey

10 What is the purpose of budgets? A budget serves many different purposes; Planning Monitoring Controlling Measuring your performance as a manager The NHS Budget Holder's Survival Guide - David Bailey

11 Budget Cycle The NHS Budget Holder's Survival Guide - David Bailey

12 How are budgets set Historic basis Budget rolled over from one year to the next with small changes made each year for: Pay awards Inflation Cost improvements Developments The NHS Budget Holder's Survival Guide - David Bailey

13 Historic Basis Strengths Uses minimum time Simple to calculate Uses a proven base Simple to understand Weaknesses Hides inefficiencies Assumes new equipment No link of finance to activity The NHS Budget Holder's Survival Guide - David Bailey

14 How are budgets set cont. Zero basis Takes zero as it s starting point rather than using last years figures and produces a fresh financial plan. To create a zero based budget you must question the continued existence of every activity in your department. The NHS Budget Holder's Survival Guide - David Bailey

15 Zero Basis Strengths Identifies inefficiencies Links activity to finance Challenging Identifies long term goals Weaknesses Time consuming Difficult to implement The NHS Budget Holder's Survival Guide - David Bailey

16 How are budgets set cont. Activity based Produces not one but a range of possible budgets which depend on the levels of activity within the department. Sometimes referred to as flexible budgeting The NHS Budget Holder's Survival Guide - David Bailey

17 Activity Based Strengths Flexes budget Links activity to finance Budgets realistic in line with activity Variances more easily understood Weaknesses Income may not flex in line with budget Changes to standard costs not recognised The NHS Budget Holder's Survival Guide - David Bailey

18 Budget Statements The NHS Budget Holder's Survival Guide - David Bailey

19 Methods of major equipment purchasing Capital funding Allocation of central funds to purchase equipment (subject to annual capital charge) Reagents, controls, calibrators and consumables are purchased from the instrument supplier or from alternative suppliers and are invoiced separately

20 Methods of major equipment purchasing cont. Leasing Lease agreements are usually entered into a period of 3 5 years. The instrument normally remains the property of the supplier. The insurance, maintenance, repair and depreciation of the instrument are the responsibility of the laboratory. Reagents, controls, calibrators and consumables are purchased from the instrument supplier or from alternative suppliers and are invoiced separately from the lease.

21 Methods of major equipment purchasing cont. Rental Agreements These are usually entered into for a set time period with the suppliers of the instrument. The insurance, maintenance, repair and depreciation of the instrument are included in the rental.

22 Methods of major equipment purchasing cont. Reagent Rental Agreements These are a variation of the basic rental agreement where the instrument rental, insurance, maintenance and repair are included in the cost of the reagents. This is calculated on the volume of tests and therefore reagents that the laboratory consumes over a period of time.

23 Methods of major equipment purchasing cont. Cost per reportable result. A refinement of the reagent rental system where the liabilities (insurance, maintenance, calibration etc.) are transferred to the instrument supplier. Consignment stock that includes reagents, consumables, control and calibrating material, are supplied to the laboratory. Periodically the numbers of test results are tabulated and an invoice is raised to the laboratory at a predetermined cost per reportable result. The laboratory incurs no direct cost prior to the performance of the test.

24 Managed Service Contracts Why have these become so prominent?

25 Growth of MSC in the NHS

26 MSC Components

27 What is a Managed Service? Managed Services means that the successful supplier/vendor will supply, maintain, service and provide consumables for a range of clinical analysers and deliver all associated activities.

28 What is a Managed Service cont. With an MSC, the cost and risk of ownership remains with the contractor, reducing significantly the risks and liabilities traditionally borne by the laboratory service.

29 What is a Managed Service cont. What are these risks? initial capital investment and unanticipated future requirements to meet service changes and rising demand unforeseen maintenance and spare part costs new staff training costs costs (financial and operational) associated with equipment downtime provision of services, reagents and consumables

30 What is a Managed Service cont. While the transfer of risk has clear benefits for the laboratory service, the presence of a collective and contractual agreement to mitigate risks on an ongoing basis is mutually beneficial in supporting a true partnership arrangement as opposed to a traditional purchaser/provider agreement.

31 Where are the savings made? The savings are generated principally from reduced reagent prices and the potential to recover VAT under HM Revenue & Customs regulations regarding contracted out services

32 Managed Service Contracts

33 Where does quality come into in all this? Acceptance Tests Define the minimally acceptable standard for an analytical method/test.

34 Where does quality come into in all this cont? Analyser Failures The vendor guarantees to provide fully functioning instruments to meet analytical turnaround times requirements. In event of analytical systems working less than optimal then vendor will replace the unit on a like for like basis.

35 Where does quality come into in all this cont? Service Guarantees In the event that the contracted service level (uptime) falls below agreed levels, vendor will reimburse the laboratory e.g. % In Service % Service Charge % 0% 93 98% 7.5% 90 93% 15%

36 Where does quality come into in all this? Late Delivery Charges Failure to deliver stated system developments in the timelines agreed by vendor will result in a fee adjustment equivalent to a 5% discount for every month the component is late up to 11 months, from the 12 th month the component will be supplied at 100% discount (i.e. free of charge).

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40 Pre Procurement

41 Post Procurement

42 Clinical Biochemistry Pre Tender Immulite 2000 Previous track 2 x ADVIA 2400 plus 2 x Centaurs Dade Behring Dimension ADVIA 1650 Consolidation Of Platforms Roche P Unit Dade Behring ProSpec

43 Clinical Biochemistry Post Tender New track 3 x ADVIA 2400, 1 x ADVIA 1800, 3 x Centaur XP, Immulite 2500 ADVIA 1200 Consolidation Of Platforms Dade Behring Dimension Dade Behring ProSpec

44 Clinical Biochemistry Post Tender 2 New track 3 x ADVIA 2400, 1 x ADVIA 1800, 3 x Centaur XP, Immulite 2000 XPi ADVIA 1200 Consolidation Of Platforms Dimension Vista 1500

45 MSC Benefits Incorporate 3 rd Parties Incorporate New Technology or Adapt System Flexibility Of MSC VAT Reclamation on reagents, capital charges and 3 rd party suppliers Single Financial Interface Added Value Onsite engineer, monthly technical meetings, quarterly financial reviews, electronic reagent inventory.

46 MSC Benefits cont. Lean training provided to staff. Initial on-site training Basic and advanced level training courses included in MSC. Continuous Service Improvements Six Sigma training to yellow belt to selected staff. On-site engineers and access to system specialists for assistance in method development.

47 MSC Benefits cont. Built in redundancy. Centralink software on server with multiple disc array and backup power supply. Multiple platforms using same reagents, calibrators, QC etc Resilience Of Service Consistency of reagents, calibrators and QC across multiple sites. Stand alone operation if track or host computer failure allowing continuity of service to users.

48 ADVIA Pilot Control ADVIA CentraLink ADVIA Automation ADVIA Centaur ADVIA 1800 ADVIA 2400 Immulite 2500 From a single point *

49 Reagent Inventory Systems Use Trident to place order Goods arrive at Lab Delivery scanned into stock Trident Cycle Assess lab requirements Stock usage

50 Lean Training Process Mapping Proposal for pre-analytical process improvement at Aberdeen Royal Infirmary December 2008

51 Lean Training Process Mapping

52 Lean Training Process Mapping Receipt Label Scanning Accessioning CT 5 CT 5 CT 6 CT 10 Batch 53 Batch 100 Batch 20 Batch >30 Sample Deliveries Start : Leave Take Bag Open Inspect Sort to IP / OP Inspect form and sample Label as appropriate Place sample in rack Start Leave Walk to scanner Feed forms Place forms in box on shelf Start Leave Input demographics Input required trests Lead Time = 60 minuets Touch Time = 20 seconds

53 Lean Training Process Mapping Preliminary data collected for routine biochemistry requests Inspect, open, sort into in-patient & out-patient 5 seconds Inspect, label appropriately, place sample in rack 5 seconds Scanning Accessioning 10 seconds Touch time 20 seconds, time to track 60 minutes, batch size 100, 5 staff. The hands-on (touch time) for samples is very efficient at 20 seconds. However, the samples took 60 minutes to progress from receipt to being available for analysis this is the result of batching, constant interruptions, special treatment of samples and lack of standardised processes.

54 6-Sigma Project Process Improvement Team from Scottish Government investigating failure to consistently meet 98% A&E 4 hr admit/discharge target.

55 6-Sigma Project cont. Support from Black Belt to assist Yellow Belt trained laboratory staff to complete full specimen journey tracking: Collection to pickup Pickup to drop off Specimen receipt to result report

56 Benchmarking Keele Benchmarking Costs and activity compared across different laboratories. Automation Healthchecks Vendor compares your performance against systems expected performance and your peers.

57 References The NHS Budget Holder s Survival Guide by David Bailey

58 Questions?