LABOUR SUBSTITUTION AND EFFICIENCY IN HEALTH CARE DELIVERY: GENERAL PRINCIPLES AND KEY MESSAGES
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1 LABOUR SUBSTITUTION AND EFFICIENCY IN HEALTH CARE DELIVERY: GENERAL PRINCIPLES AND KEY MESSAGES Professor Bonnie Sibbald, Dr Anne McBride, Professor Stephen Birch, The University of Manchester April 2011
2 TABLE OF CONTENTS Executive summary... 2 Context Labour substitution; what is it and why do it? Does labour substitution work? Workforce shortages Cost Efficiency Unintended consequences for patients Continuity of care Implementation challenges Key messages References CfWI April
3 EXECUTIVE SUMMARY The substitution of one kind of worker with another is one strategy for improving the effectiveness and efficiency of health care provision. In order to make informed choices about labour substitution, managers and workforce planners need evidence based research about the likely consequences of such changes. Drawing on economic principles and studies across a number of occupational work groups in the healthcare sector, this briefing paper indicates that labour substitution: Is a plausible strategy for addressing workforce shortages Can reduce (wage) costs - under certain conditions which can be challenging to meet Can improve efficiency - under restricted conditions which are difficult to meet It is important for healthcare planners and managers to give careful consideration to the economics of labour substitution, in order to ensure it does not lead to an increase in costs and reduced efficiency. Other factors which affect the feasibility of labour substitution include training and regulation requirements. CfWI April
4 CONTEXT The Centre for Workforce Intelligence (CfWI) Workforce Risks and Opportunities project sets out the major risk and opportunities facing the health and social care workforce in 2011 and beyond. The University of Manchester is providing specialist knowledge to the CfWI through an integrated approach across a range of disciplines. This is one of a series of briefing papers to provide managers and workforce planners with evidence to inform their choices when addressing short, medium and long-term workforce challenges. The 2011 series focuses on: Labour substitution and efficiency in health care delivery: general principles and key messages Recession, recovery and the changing labour market context of the NHS Workforce risks and opportunities: working time practices in nursing and midwifery The policy context for dentistry skill mix in the NHS in the UK Identifying the risks and opportunities associated with skill mix changes and labour substitution in pharmacy What is the evidence that workload is affecting hospital pharmacists performance and patient safety? Managing people in networked organisations: identifying the challenges for health and social care CfWI April
5 1 LABOUR SUBSTITUTION - WHAT IS IT AND WHY DO IT? Labour substitution refers to replacing one kind of worker with another when producing a good or delivering a service. Generally the focus is on moving work from a senior/more expensive type of worker to a junior/less expensive type of worker. Common types of substitution include transferring tasks: from a senior to a junior worker within the same discipline (e.g. from a senior to junior doctor, or from a senior to junior nurse) from one type of health worker to another where the substitute commands a lower wage (e.g. from a doctor to a nurse, or from a health professional to an auxiliary/technician) The expectation is that labour substitution will achieve one or more of the following important benefits without compromising quality: Compensate for shortages of (or reduce demand for) highly qualified staff Reduce cost Improve efficiency CfWI April
6 2 DOES LABOUR SUBSTITUTION WORK? 2.1 Workforce shortages Within the context of budgetary planning, labour substitution is a plausible strategy for reducing demand for more highly qualified staff that might be in short supply. Empirical research suggests that an appropriately trained substitute can deliver as high quality care as the original type of worker. 1-6 However, assuming the original workers are being used to full scope of practice, because different kinds of workers have differing skill sets, substitution is always partial. This means that only some of the tasks carried out by one kind of worker, usually the less complex ones can be safely performed by another. Therefore, demand for the original type of worker can be reduced but not eliminated. 2.2 Cost Cost savings are possible only under a restricted set of circumstances. At task level: If two kinds of workers are both capable of carrying out the same clinical task and one commands a lower wage than the other, employers will reduce cost per unit activity by deploying the cheaper worker. This is assuming all other factors are equal. However, research suggests that all other factors are rarely equal. Savings on salaries are often offset by the lower productivity of substitutes (e.g. due to longer consultations and/or increased use of tests and investigations), leading to no overall reductions in cost. 1 As salary and productivity differentials between substitute and original types of workers vary from place to place, cost savings are context dependent and may be achieved in some situations. 1, 7 At system level: As a substitute cannot fully replace the original type of worker, if the additional skills of the more expensive worker are required it becomes necessary to employ a mix of original and substitute workers. The new mix of workers may generate efficiency gains (see below). However, where it is not feasible or affordable to deploy such a multi-disciplinary team, a better option may be to employ a more highly trained worker whose greater productivity and CfWI April
7 breadth of skills will offer the best value for money. The use of less expensive workers would then become an add-on to existing staff. 2.3 Efficiency Technical efficiency is the maximizing of outputs from a given set of inputs. Cost efficiency involves minimizing costs for a given output. 8 Efficiency gains through labour substitution are possible only if the senior/more expensive worker stops carrying out tasks now delegated to junior/less expensive workers. 9 If the senior/more expensive workers are still retained to the same extent within the system, these efficiency gains are lost. This requires firm management, the absence of which leads to duplication rather than substitution of labour with consequent escalation in costs and falls in efficiency. 10 CfWI April
8 3 UNINTENDED CONSEQUENCES FOR PATIENTS 3.1 Continuity of care Larger team size is a logical consequence of labour substitution, as one type of worker cannot fully substitute for another. This might have an impact on personal continuity of care which is valued by both patients and staff, particularly for more serious, psychological or family issues. 11,12 Some studies have shown personal continuity can improve health outcomes for patients, although the wider evidence base remains divided and inconclusive. 13 Larger team size is known to reduce personal continuity of care and patient satisfaction with access to their preferred care-giver On the other hand, rapid access for acute problems tends to be better with larger teams. 15 In addition, there may be economies of scale that make it easier and cheaper for large teams to provide a wider range of services Implementation challenges Training A number of factors affect the feasibility of labour substitution. Substitutes need to be trained for their new role. The availability and cost of appropriate training programmes may limit the pace of change. Although the evidence base is small, research supports the view that clinical guidelines or protocols can help to facilitate the transfer of tasks from one kind of worker to another while maintaining quality Regulation and licensing There may be legal restrictions governing what type of work can be transferred to a substitute. Removing unhelpful restrictions can be difficult and costly. Concerns may also be raised about who is legally liable when care is transferred from one kind of worker to another. In England, each health professional is liable for the quality of care he or she delivers. Employers need to show that they take appropriate steps to ensure substitutes are appropriately trained and supervised in their work. 19 CfWI April
9 3.2.3 Management of change Substituting one kind of worker for another may challenge the professional identity of both sets of workers, leading to opposition as people struggle to maintain traditional boundaries Transferring tasks from senior to junior workers leaves the seniors to manage the more complex patient problems which some do not welcome. 23 Junior workers may experience excessive workloads unless their numbers are expanded and/or simpler tasks are in turn delegated to 24, 25 other workers. For both juniors and seniors, the complexity of work will increase and that will lead to upward pressure on wages for those involved. Managing these changes takes time and good human resource skills. 26, Coordination of care As team size increases, transaction costs also rise. People need to spend increasing amounts of time conferring with each other, reducing the amount of time available for direct patient care. A critical point is reached where transaction costs can outweigh the benefits of collaborative working. 28 Shared patient record systems, to which all team members may contribute and withdraw information, have been advocated as one means of reducing transaction costs. 29 Good team working can also improve performance. 30 Nonetheless, the coordination of care remains more challenging in larger teams. CfWI April
10 4 KEY MESSAGES Labour substitution: Is a plausible strategy for addressing workforce shortages Can reduce (wage) costs - under certain conditions which can be challenging to meet Can improve efficiency - under restricted conditions which are difficult to meet Labour substitution can be challenging to implement and may have unintended negative effects on the continuity of clinical care. CfWI April
11 5 REFERENCES 1. Laurant M, Reeves D, Hermens R, Braspenning J, Grol R, Sibbald B. Substitution of doctors by nurses in primary care. The Cochrane Database of Systematic Reviews 2005 Issue 5 Art No. CD pub2 2. Sibbald B, Shen J, McBride A. Changing the skill-mix of the health care workforce. Journal of Health Services Research and Policy 2004 (9) Suppl 1: Laurant M, Harmsen J, Wolersheims, Grol R, Faber M, Sibbald B. The impact of non physician clinicans: do they improve the quality and costeffectiveness of health care services? Medical Care Research and Review 2009; 66: 36S 4. Dennis SM. May J, Perkins S, Zwar N, SibbaldB, Hasan I. What evidence is there to support skill mix changes between GPs, pharmacists and practice nurses in the care of elderly people living in the community? Australia and New Zealand Health Policy 2009; 6: 23. doi: / Laurant M, Reeves D, Kontopantelis E, Hermens R, Braspenning J, Grol R, Wensing M, Sibbald B. The effectiveness of nurse supplementation in primary care: a systematic review and meta-analysis (2007, unpublished) 6. Williams DM, Medina J, Wright D, Jones K, Gallager JE. A review of effective methods of delivery of care: skill mix and service transfer to primary care settings. Primary Dental Care 2010; 17(2): Dierick-van Daele AT, Steuten LM, Metsemakers JF, Derckx EW, Spreeuwenberg C, Vrijhoef HJ. Economic evaluation of nurse practitioners versus GPs in treating common conditions. British Journal of General Practice 2010 Jan; 60(570):e Dernick D, Scott A Economic approaches to doctor/nurse skill mix: problems, pitfalls, and partial solutions. British Journal of General Practice 2002 Jan; 52(474): Richardson MSC. Identifying, evaluating and implementing cost-effective skill mix. Journal of Nurse Management 1999; 5: Laurant M, Hermens R, Braspenning J, Grol R, Sibbald B. Impact of nurse practitioners on workload of general practitioners: randomised controlled trial. British Medical Journal 2004; 328: CfWI April
12 11. Kearley KE, Freeman GK. An exploration of the value of the personal doctorpatient relationship in general practice. British Journal of General Practice 2001; 51: Schers H, Webster S, van den Hoogen H, Avery A, Grol R and van den Bosch W. Continuity of care in general practice: a survey of patients views. British Journal of General Practice 2002; 52: Freeman G, Shepperd S, Robinson I, Ehrich K, Richards S. Continuity of Care. Report of Scoping Exercise for the National Co-ordinating Centre for NHS Service Delivery and Organisation R&D (NCCSDO). London: NCCSDO, Baker R. Characteristics of practices, general practitioners and patients related to levels of patients' satisfaction with consultations. British Journal of General Practice 1996; 46: Campbell J. The reported availability of general practitioners and the influence of practice list size. British Journal of General Practice 1996; 46: Wensing M, Vedsted P, Kersnik J et al. Patient satisfaction with availability of general practice: an international comparison. International Journal for Quality in Health Care 2002; 14: Sibbald B, Laurant M, Scott A. Changing task profiles. In: Chapter 8. Saltman A, Rico A & Boerma W (eds.) Primary Care in the Driver's Seat? Organizational Reform in European Primary Care. Maidenhead: Open University Press, pp , Chapter Thomas LH, Cullum NA, McColl E, Rousseau N, Soutter J, Steen N. Guidelines in professions allied to medicine. Cochrane Database of Systematic Reviews 1999, Issue 1. Art. No.: CD Peysner J. Clinical negligence and nurses. British Journal of Nursing 1998; 7: Dickson N, Pearson P, Emmerson P, Davison N, Griffith M. Are nurse practitioners merely substitute doctors? Professional Nurse 1996; 11: Wilson A, Pearson D and Hassey A. Barriers to developing the nurse practitioner role in primary care the GP perspective. Family Practice 2002; 19: CfWI April
13 22. Prowse J and Prowse P. Role redesign in the National Health Service: the effects on midwives' work and professional boundaries. Work, Employment and Society 2008 Dec; 22(4) Charles-Jones H, Latimer J, May C. Transforming general practice: the redistribution of medical work in primary care. Sociology of Health and Illness 2003; 25: Adams A, Lugsden E, Chase J, Arber S, Bond S. (2000) Skill-mix changes and work intensification in nursing. Work, Employment and Society 2000; 14: Thornley, C Efficiency and equity Considerations in the employment of health care assistants and support workers Social Policy and Society :2, Doyal L and Cameron A. Reshaping the NHS workforce. British Medical Journal 2000; 320: Hyde, P., McBride, A., Young, R., Walshe, K. (2005) Role Redesign: New Ways of Working in the NHS, Personnel Review, 34(6): Barr DA. The effects of organizational structure on primary care outcomes under managed care. Annals of Internal Medicine 1995;122: Rigby M, Roberts R, Williams J. et al. Integrated record keeping as an essential aspect of a primary care led health service, British Medical Journal 1998; 317: Bower P, Sibbald B. The Health Care Team Chapter 1.3 In Jones R et al (eds). Oxford Textbook of Primary Care Medical Care. Volume 1 Oxford: Oxford University Press, CfWI April
14 DISCLAIMER The Centre for Workforce Intelligence (CFWI) is an independent agency working on specific projects for the Department of Health and is an operating unit within Mouchel Management Consulting Limited (MMC). This report is prepared solely for the Department of Health by MMC, in its role as operator of the CFWI, for the purpose identified in the report. It may not be used or relied on by any other person, or by the Department of Health in relation to any other matters not covered specifically by the scope of this report. MMC has exercised reasonable skill, care and diligence in the compilation of the report and MMC's only liability shall be to the Department of Health and only to the extent that it has failed to exercise reasonable skill, care and diligence. Any publication or public dissemination of this report, including the publication of the report on the CFWI website or otherwise, is for information purposes only and cannot be relied upon by any other person. In producing the report, MMC obtains and uses information and data from third party sources and cannot guarantee the accuracy of such data. The report also contains projections, which are subjective in nature and constitute MMC's opinion as to likely future trends or events based on i) the information known to MMC at the time the report was prepared; and ii) the data that it has collected from third parties. Other than exercising reasonable skill, care and diligence in the preparation of this report, MMC does not provide any other warranty whatsoever in relation to the report, whether express or implied, including in relation to the accuracy of any third party data used by MMC in the report and in relation to the accuracy, completeness or fitness for any particular purposes of any projections contained within the report. MMC shall not be liable to any person in contract, tort (including negligence), or otherwise for any damage or loss whatsoever which may arise either directly or indirectly, including in relation to any errors in forecasts, speculations or analyses, or in relation to the use of third party information or data in this report. For the avoidance of doubt, nothing in this disclaimer shall be construed so as to exclude MMC's liability for fraud or fraudulent misrepresentation. CfWI April
15 The Centre for Workforce Intelligence produces quality intelligence to inform better workforce planning that improves people s lives
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