€88 million health service saving

The review involved collaborative consultation between hospitals and community service providers, as well as support services including procurement, finance and human resourcesHow we’re adding value: Working with our client, we identified ways to reduce costs while minimising impacts on front-line services, helping to bridge a €100 million funding gap. Our assessment is the basis of a toolkit which can be used across Ireland.

We identified longer-term efficiencies to deliver an additional €40m of savings

Like healthcare organisations across Europe, Ireland’s health and social care service has to rein in spending. The Health Service Executive (HSE) budget was cut by 12% in 2010, equating to a €1.5 billion reduction in spending. HSE West, providing healthcare across western Ireland, had to achieve €100 million of savings in the last six months of the year. Working with the HSE, we found ways of achieving those savings while minimising the impact on patient care. “HSE West provides health and social care to a population of one million spread across a large rural area.

Our review focused on five hospitals, in Galway, Sligo, Mayo, Letterkenny and Ballinasloe, and on the provision of primary, community and continuing care services in Galway,” explains Mott MacDonald project manager Brian Niven. “There was a lot of good work already under way,” he adds, “but more was needed.”

Empowering stakeholders

Staffing accounts for two thirds of the HSE’s operating costs, but there was a strict policy of no redundancies among permanent employees – savings had to be sought elsewhere. “We engaged with managers and clinicians, checked the practicality and impact of their ideas, and looked for further opportunities,” Brian says. “HSE staff felt empowered to propose ideas for improvements. There was a range of gains, from small to large, which built up to an €88 million saving.”

The review involved collaborative consultation between hospitals and community service providers, as well as support services including procurement, finance and human resources. This identified potential efficiencies through combining their purchasing power and sharing innovations and best practice. It also gave transparency to the decision making process, allowing all to understand the final recommendations. “By engaging the workforce in the review we helped them to understand the pressures the health service is under and enabled staff ownership over the solutions put forward,” Brian adds.

Maximum savings, minimum impact

In all, 50 recommendations were made to realise efficiencies in the last half of 2010, taking account of their impact on front-line clinical services, the management of clinical risks and patient safety. Following implementation of efficiency steps, additional work was required to make sure that access and activity targets were being met. Throughout, communication has been vital. “It’s essential that patients and the public understand what is affordable and their expectations are in line with that. Equally, they need to be reassured that patient safety is an absolute priority,” Brian emphasises.

€88 million in six months

Recommendations and indicative savings included:

• Improving national procurement of surgical and medical equipment and drugs – €5.8 million
• Renegotiation of contracts with third party service providers – €2.3 million
• Reducing nursing overtime by redeploying staff to fill service gaps – €2 million
• Improving inventory control to reduce capital tied up in stock – €1.5 million
• Sharing beds across specialties – €1.1 million

Pushing savings to €128 million

We identified longer-term efficiencies to deliver an additional €40 million of savings. Examples include:

• Improving cash flow through better invoicing
• Reducing junior doctors’ overtime
• Creating a region-wide pharmacy dispensing generic instead of proprietary drugs
• Reconfiguring hospital sites and their use to improve the quality and sustainability of services

Did you know

Our health sector expertise spans:

• Working with the UK national health service East midlands region to realise £1.6 billion of efficiencies through improved productivity
• Equipping 400 Iraqi clinicians with the skills to modernise and strengthen the country’s health system
• Providing strategic advice to the Australian government’s international development programme