Medirest and The Royal Surrey County Hospital Partnership Paper

Transcription

1 Medirest and The Royal Surrey County Hospital Partnership Paper January 2015

2 HOW OUTSOURCING NON- CLINICAL SERVICES CAN HELP NHS TRUSTS IMPROVE COST EFFICIENCY AND PERFORMANCE THE ROYAL SURREY COUNTY HOSPITAL PARTNERSHIP: BENEFITS AT A GLANCE Real-world success factors from The Royal Surrey County Hospital show how NHS Trusts can improve performance and reduce operating costs by transitioning non-clinical services to a specialist private-sector partner. 10% cost savings across key outsourced soft FM services (housekeeping, and portering), representing total annual cost savings of 179,000 Increase in patient satisfaction to 92% within housekeeping services (Internal Medirest Patient Surveys) 10% performance improvement for housekeeping (internal audit) 1 million invested to build a new Marks & Spencer Simply Food store and larger Costa Coffee store at the entrance to the hospital, generating additional annual income of 110,000 for the Trust 160,000 invested to improve and re-brand the staff and visitor restaurant. 90,000 invested to build a new, on-site laundry facility 100,000 invested in new equipment for the housekeeping team 10,000 invested in new logistics software to enhance the portering service EXECUTIVE SUMMARY With budgets under greater pressure than ever, increasing numbers of NHS Trusts are looking to outsource nonclinical services as a way to increase efficiency and achieve operational cost savings. However, board-level concerns about private-sector partnerships and complex public-sector tendering processes can hold outsourcing projects back. For Trusts that can overcome these common challenges, though, the benefits of outsourcing non-clinical services are compelling. Not only can Trusts leverage the specialist skills and experience of private-sector partners and eliminate distractions to the core business of providing excellent patient care, they can also implement robust Service Level Agreements (SLAs) for service quality and achieve significant operational cost savings based on delivering best practices, improved staff training and state-of-the-art equipment. Savings generated by outsourcing can help overcome growing financial pressures on hospitals in the UK and allow these funds to be invested in front-line resources in particular, additional nursing staff. Key to this is that both the hospital and service provider must achieve financial and nonfinancial benefits as a result, and work in partnership over the long term to achieve shared goals. In this paper, we look at seven success factors that can help NHS Trusts build successful strategies for outsourcing non-clinical services and maximise the cost and performance benefits on offer. The success factors are based on realworld experiences at The Royal Surrey County Hospital, which has achieved significant performance improvements and cost savings by transitioning key soft FM services to Medirest, the healthcare services arm of Compass Group. 3

3 SUCCESS FACTORS FOR NON-CLINICAL OUTSOURCING IN THE NHS If Medirest had pitched their proposal directly to the Board, we probably wouldn t have made any progress with outsourcing our soft FM services. My role as Director of Organisational Transformation was critical for convincing senior people that outsourcing was in our best interests. It also showed the Board that we were fully in control of the negotiations with Medirest, both in terms of defining the vision and scope for the outsourcing strategy and also for setting SLAs and cost-saving requirements as well. Director of Organisational Transformation, The Royal Surrey County Hospital ACHIEVING BUY IN FROM KEY STAKEHOLDERS Ideological and political opposition to outsourcing is still common in the NHS, even for non-clinical services. To build a strong, effective outsourcing strategy, key decision makers must effectively communicate the benefits across all levels of the organisation. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL The Royal Surrey County Hospital s Director of Organisational Transformation provided the strong internal sponsorship and leadership needed to ensure success for this landmark, first-generation outsourcing project. Like me, most of the Board members at The Royal Surrey County Hospital come from a commercial background and fully understand the benefits of outsourcing nonclinical services for increasing operational efficiency and performance, says Turner. That made my job much easier when it came to making the business case for outsourcing our soft FM services with Medirest. The Medirest team supported Turner with an in-depth financial analysis of current services and detailed projections for likely cost savings. The Medirest team helped me build a strong, evidence-based business case for extending our non-clinical outsourcing contracts, says Turner. All that good work fed into multiple presentations to the Board, which ultimately helped us get this important project underway. s strong leadership led to a two-year extension of existing nonclinical outsourcing contracts with Medirest and a ten-year extension to The Royal Surrey County Hospital s existing retail concession contract under which Medirest is investing 1 million in a new Marks & Spencer Simply Food store and larger Costa Coffee store, which will be built at the entrance to the hospital. The Royal Surrey County Hospital has also incorporated a number of additional soft FM services into its existing Medirest soft FM contact, including housekeeping, portering, night-time security and switchboard services all previously delivered in-house by internal teams. 4 5

4 The new M&S Simply Food and Costa Coffee store will dramatically improve the appearance of the hospital and provide a better experience for staff, visitors and patients. The Trust will also share in a dramatic uplift in revenues from retail sales. Director of Organisational Transformation, The Royal Surrey County Hospital The onus is on Trusts to benchmark current delivery models and demonstrate that outsourced services will be at least as good, if not better, than they are currently, and that outsourcing non-clinical services will provide measurable financial benefits. If you can demonstrate the benefits beyond any doubt, anything is achievable. Director of Organisational Transformation, The Royal Surrey County Hospital LONG-TERM INVESTMENT AND SHARING FINANCIAL REWARDS To maximise potential outsourcing benefits, hospitals must choose partners who are prepared to make major investments in service delivery and share financial rewards fairly with the Trust. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL Under the terms of The Royal Surrey County Hospital s extended retail, catering and soft FM contracts, Medirest will make major investments to improve service quality and create revenue growth for the hospital. This is reflected in a true partnership agreement whereby profit based on sales in retail and operating profit in the FM services will be shared between Medirest and The Royal Surrey County Hospital. Chris Minter, Contract General Manager at Medirest, says, We are investing 1 million in the new Marks & Spencer Simply Food store and new, larger Costa Coffee store and hundreds of thousands to refurbish the staff and visitor restaurants, build the new on-site laundry and provide new equipment for the housekeeping team. All this investment demonstrates our ongoing commitment to the Trust, and the fact that we are sharing the financial returns from our retail, catering and soft FM contracts with The Royal Surrey County Hospital will help to ensure that our relationship continues to go from strength to strength. Medirest s commitment to partnership with The Royal Surrey County Hospital is already delivering significant benefits for the Trust and will pave the way for future outsourcing opportunities, says. We have a really good, healthy, mutually beneficial partnership with Medirest, he comments. Everyone has to make money, but Medirest puts quality first, and that is what ultimately makes our business relationship successful. BENCHMARKING THE COST OF IN-HOUSE SERVICES With in-house services, it s often impossible to accurately benchmark spending and drill down, for example, to the cost of cleaning a particular ward or buying chemicals. To empower Trusts to create detailed specifications for outsourcing contracts and properly assess supplier proposals, effective cost analysis must be undertaken for existing, in-house services. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL Medirest helped The Royal Surrey County Hospital to benchmark all its existing services in terms of processes used, tasks carried out and overall service delivery costs. This made it possible to create a detailed scope of work for the extended Medirest contract and to set realistic Key Performance Indicators (KPIs) for performance improvement and cost saving. We have started reporting on performance in areas where no data previously existed, says Minter. The housekeeping operation, for example, was audited just two months after handover, showing an impressive performance improvement compared to the previous, inhouse service. Housekeeping staff, switchboard staff and porters now have clear performance targets that they understand and strive to achieve. Now that The Royal Surrey County Hospital has gone through this process with Medirest, outsourcing additional non-clinical services will be far easier and quicker in the future, and the Trust will also be able to accurately assess the commercial benefits of future proposals. Before, it was impossible to accurately calculate the cost of completing a particular task or delivering a service the management information just didn t exist, says Turner. Working with Medirest, we benchmarked our previous, in-house services, which has allowed us to accurately calculate cost savings achieved through outsourcing. We also have a solid platform for creating detailed outsourcing Request for Proposals (RFPs) in the future and for evaluating partner proposals. 6 7

5 MITIGATING QUALITY RISKS Soft FM services directly support core clinical services and impact the patient experience and are therefore mission-critical for Trusts. Before taking a decision on outsourcing non-clinical services, Trust executives must be satisfied that private-sector partners are able to deliver consistently high-quality services that effectively support core frontline activities. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL We are healthcare experts, not housekeeping or portering experts. We chose to transition our soft FM services to partner with Medirest because these kinds of services are core to what they do. Their specialist skills and experience have helped us achieve performance improvements and cost savings that would otherwise be impossible. Director of Organisational Transformation, The Royal Surrey County Hospital Key decision makers from The Royal Surrey County Hospital visited King s College Hospital in London, where all the housekeeping services are provided by Medirest. King s sets very high standards for cleanliness, and is an excellent example of what can be achieved with proper management supervision, staff training and the latest equipment. Simon Kruger, Sales Director at Medirest, says, To ensure they are getting the best from their outsourcing partners, NHS Trusts need to know what good looks like. Decision makers from The Royal Surrey County Hospital were very impressed by their experience of visiting King s College Hospital and they could quickly see how working with a specialist housekeeping partner such as Medirest could help them achieve significant performance improvements. At The Royal Surrey County Hospital, contractual remuneration is also based on SLA compliance, which is a further driver of excellent service quality. Our livelihood as a company depends on our ability to deliver to incredibly high standards, says Kruger. It is central to everything we do. Turner says, There is a commonly held belief that housekeeping and portering shouldn t be outsourced because they directly impact the patient experience. However, our experience shows that outsourcing these services to a trusted partner such as Medirest can help improve service quality, both through specialist skills and experience, and improved management supervision. Outsourcing partners can also implement SLAs and KPIs for service delivery where none previously existed, dramatically increasing quality and accountability. To deliver the highest standards of service quality, Medirest set up a new management team to oversee operations at The Royal Surrey County Hospital. This included dedicated managers to support housekeepers, porters, switchboard and security teams. In addition, a dedicated HR and training co-ordinator was appointed to drive learning and development and contribute to long-term improvements in service quality. 8 9

6 There were some people in our organisation who didn t believe that we could achieve significant cost savings without making negative changes to people s contracts and wages. That isn t the kind of Trust we want to be we gave our word to protect our staff and we ve done it. Director of Organisational Transformation, The Royal Surrey County Hospital EFFECTIVE EMPLOYEE ENGAGEMENT Typically, staff think that moving from their NHS employment contract to a private employment contract will negatively affect their pay, job security and pension, which can delay or ultimately put Trusts non-clinical outsourcing plans in jeopardy. To allay the fears of team members and keep projects on track, Trusts and their outsourcing partners must work together to engage all affected staff members. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL To optimise staff engagement at The Royal Surrey County Hospital, the Trust and Medirest joined forces to form a single, integrated Human Resources (HR) team. Bev Budd, Regional HR Manager at Medirest, says, Working with The Royal Surrey County Hospital HR team, we set up a programme to dispel the myth that people s benefits and pensions would be changed. We also took the opportunity to talk to staff about Medirest, and how transitioning to us would improve their working life based on improved management support, the introduction of new equipment and the provision of new training and future career development opportunities. In total, 198 members of staff were transferred to Medirest under TUPE terms and conditions, protecting their pay and benefits. In terms of mobilisation and the TUPE process, Medirest had a tried and tested approach that minimised risk for us, says Turner. We felt that the team had seen and done it all before, and that they knew more about it than we did, which was very reassuring. One member of staff who was transferred to Medirest was Maria Rana, head of The Royal Surrey County Hospital s 135-strong housekeeping team, who had worked in the NHS for more than 30 years. I wasn t sure how moving to Medirest would impact my working life and my team was worried about how their jobs would be banded and how their pay would be affected. When it came to it, though, a joint HR team from The Royal Surrey County Hospital and Medirest did an excellent job of explaining what would happen when the contract started, how our terms and conditions would be protected by TUPE, and how we would be supported through the transition. says, Working jointly on HR issues was critical to the success of this project. I managed major staff announcements and union meetings, while Medirest helped staff understand what the changes would mean for them during roadshows, dropin sessions and other events. At the outset, we said that we would protect staff through the transition and that s exactly what we did. NEW OPPORTUNITIES FOR CAREER DEVELOPMENT For Sarah Carr, the transfer to Medirest was careerchanging. When I was a direct NHS employee I worked on the switchboard and I felt there was nowhere I could really go from there, she says. Once I had transferred to Medirest, I saw new opportunities to develop my career and I now work in HR and training, which is far more fulfilling. Lots of my colleagues are also taking courses so they can develop their own careers with Medirest, either here or at other Medirest sites across the UK. The scale of Medirest s operations provides a range of new career development opportunities for staff transferring from the NHS. Bernadette Thorpe, Medirest s Strategic Partnership Director, says, We have an excellent track record when it comes to taking people on as part of the wider Compass family. There are huge opportunities for staff to move into different and sometimes more senior roles, either where they are currently based or in other hospitals around the country, whether they are hospital chefs, administrators, housekeepers or managers

7 ACHIEVING COST-SAVING TARGETS Cost reduction is a principal driver for most non-clinical outsourcing projects in the NHS. For Trust decision makers, the ability to track and report on the achievement of cost-saving targets is critical. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL ACHIEVING TANGIBLE PERFORMANCE IMPROVEMENTS To justify decisions to outsource non-clinical services, hospital executives need to see real, tangible improvements in service quality and performance compared to previous ways of working. In addition, partners must provide in-depth reports on service enhancements that focus on service responsiveness, quality and value. LESSONS FROM THE ROYAL SURREY COUNTY HOSPITAL The ability to measure significant performance improvements was key to the success of the Royal Surrey County Hospital s outsourcing project with Medirest. For this reason, Medirest delivered the transition to outsourced services according to a detailed plan, which covered everything from staff engagement to the delivery of required training and procurement of new equipment. In addition to this planning, measures were put in place to carefully monitor key performance metrics especially during the first 12 weeks of the contract when newly outsourced services are at the highest risk of experiencing performance issues. By preparing effectively for the transition to outsourced services, and closely monitoring service delivery during the earliest days of the contract, Medirest and Royal Surrey County Hospital have been able to demonstrate tangible performance improvements across all service areas. If you visit our hospital, you can immediately see that things are working better than before, says Turner. Staff have new uniforms and equipment, and wards look visibly cleaner. The portering team is also more motivated and responsive, and other services such as the switchboard have also improved almost beyond recognition. The extension to Medirest s contracts at The Royal Surrey County Hospital has also significantly improved the appearance of the hospital. We have a completely refurbished restaurant, a brand new Marks & Spencer Simply Food store, and a larger Costa Coffee store in the entrance to the hospital, says Turner. All this represents a huge investment from Medirest that is directly benefiting the hospital and its patients, staff and visitors. Housekeeping is a key area where Medirest has delivered tangible performance and quality improvements. Medirest has introduced microfibre cleaning, which is far more effective than our previous housekeeping methods, says Rana. With this new system, and the right training and equipment, we have already raised our quality control scores by 10%. The Trust is happy, staff are happy, and patient satisfaction surveys have improved every quarter. Performance improvements for housekeeping operations have been benchmarked at around +10% based on an internal audit. At The Royal Surrey County Hospital, Medirest is meeting its contractual requirement to deliver 10% cost savings across housekeeping and portering services, with virtually no reduction in headcount. This has been achieved through reduction of required overtime to deliver services, as well as through investment in equipment and training for staff, enabling them to become more productive. Because we are a specialist in our field, we have been able to leverage service delivery best practices and lessons learned on other contracts around the UK. We have also invested in the people, training, equipment and management supervision needed to deliver a better quality of service at a lower cost. By empowering teams to work more efficiently and productively, and eliminating duplicated tasks, we have been able to meet our contractual targets for cost reduction so far, and we hope to exceed them in the future: sharing any additional benefits with the Trust. Additional Cost Improvement Plans (CIPs) are also being developed by The Royal Surrey County Hospital and the the Medirest project team. Working with the Board, we are constantly working to identify new CIPs says Kruger. Some of these require only small, tactical changes to the way we are currently working, while others require significant investment. In all cases, though, we are 100% focused on maximising cost efficiency for The Royal Surrey County Hospital and helping the Trust achieve its mandated cost-reduction targets. The savings delivered by outsourcing soft FM services to Medirest are being diverted to enhance core, patient-facing services. We are saving around 179,000 a year with Medirest compared to our previous way of working, says. That is helping us to increase funding for nursing and other critical frontline services that improve outcomes for patients. The savings we have achieved with Medirest are being directly channelled into frontline services, helping to increase the number of nurses on duty and to improve the quality of patient care. DRIVING CONTINUAL IMPROVEMENT At The Royal Surrey County Hospital, Medirest has implemented a highly inclusive strategy for driving continual improvement. Team members are actively encouraged to pass on their ideas for streamlining working practices to their managers, and good ideas are escalated and implemented, with recognition for the member of staff concerned. Central to this is training and development to ensure the team has the knowledge to really understand the KPIs within each service stream.this knowledge is generated via a clear communications model that involves team members meeting daily in huddles to discuss their activities. Director of Organisational Transformation, The Royal Surrey County Hospital At The Royal Surrey County Hospital, we ve been able to implement a number of initiatives to improve performance by listening to individual team members who have ideas about how they can do things better, says Minter. If someone has a good idea, we write up a project sheet and, if the project gets approval, we implement it across the team. Where there are successes, we write them up in our newsletter and on our social media platform, giving the team member the recognition they deserve. As well as helping us drive continual improvement, this approach gives team members a voice, which they really value

8 CONCLUSION The experiences of The Royal Surrey County Hospital show how outsourcing non-clinical services to trusted private-sector partners can help NHS Trusts to improve performance and achieve significant operational cost savings. The success factors outlined in this paper can be implemented by any NHS Trust wishing to embrace an outsourcing strategy for their nonclinical services, including soft FM services. By taking a similar approach to The Royal Surrey County Hospital, Trusts can overcome all the common outsourcing challenges, from political and ideological opposition, to effective staff engagement and mobilisation. Having gone through the process of benchmarking in-house services and transitioning key soft FM services to Medirest, The Royal Surrey County Hospital is now in a position to extend its outsourcing strategy to new areas over the coming months and years. I know there are more non-clinical services that we could outsource to Medirest, which would give us even greater economies of scale and operational cost savings, says. We re currently looking into that especially for services such as reception and helpdesk that are part of Medirest s core competency. To find out more about the The Royal Surrey County Hospital and Medirest partnership, or for advice on outsourcing non-clinical services, please contact Simon Kruger at simon.kruger@compass-group.co.uk ABOUT MEDIREST Medirest is the UK s leading healthcare support service company, working in more than 50 acute hospitals and medical treatment centres. Our aim is to provide the highest quality, best value housekeeping, catering, logistics support and retail services to the healthcare sector. Medirest improves the patient experience by delivering: Clean and safe hospitals The best patient dining experience in the world Flexible and professional services, including housekeeping, portering, security services, switchboard, helpdesk and other support services The best choice of retail brands including high street names ABOUT THE ROYAL SURREY COUNTY HOSPITAL The Royal Surrey County Hospital is a leading General Hospital and specialist tertiary centre for cancer, Oral and Maxillo-facial surgery and pathology. The hospital serves a population of 320,000 for emergency and general hospital services and is the lead specialist centre for cancer patients in Surrey, West Sussex and Hampshire, serving a population of 1.2 million. The Royal Surrey County Hospital sees around 280,000 outpatients a year, 61,000 of whom are admitted for treatment. Around 70,000 patients attend the A&E department annually and hospital staff deliver 3,200 babies. Patients at The Royal Surrey County Hospital benefit from state-of-theart diagnostic equipment including two MRI scanners, four CT scanners, interventional radiology equipment and a gamma camera. The Trust has a very strong reputation for minimally invasive surgery and laparoscopic surgery, which is used widely across all surgical specialties. The Trust s Minimal Access Therapy Training Unit is a national leader in laparoscopic surgery training. Structured around 13 special business units (SBUs) that are supported by a range of Clinical Support Services, The Royal Surrey County Hospital has 3,000 staff, 527 beds, 14 operating theatres and annual income of 257 million. With close ties to the University of Surrey, The Royal Surrey County Hospital has an extensive education, training and research portfolio. The Royal Surrey County Hospital provides a range of services for patients in the community, as well as running outpatient clinics at Cranleigh, Haslemere and Woking hospitals and a number of local GP surgeries. Patients can also go to Haslemere Hospital for endoscopies and even more services will soon be delivered closer to where patients live

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