Archive for October, 2010
Type “spreadsheet error” into Google and a litany of woes will unfurl. Spreadsheet error is serious stuff: so serious that it’s a research field in its own right, and even has an international organisation devoted to it. The leading researcher in the field, a fellow called Raymond Panko, concludes:
All in all, the research done to date in spreadsheet development presents a very disturbing picture. Every study that has attempted to measure errors, without exception, has found them at rates that would be unacceptable in any organization. … With such high cell error rates, most large spreadsheets will have multiple errors, and even relatively small “scratch pad” spreadsheets will have a significant probability of error.
Surely any serious errors would be picked up before they did lasting damage? That’s what everybody hopes, but unfortunately the answer is: sometimes. And sometimes not. At the height of the banking crisis, for instance, Barclays Capital accidentally bought 179 trading contracts they didn’t want from the collapsed Lehman Brothers, all because of a spreadsheet formatting error. As one study of spreadsheet errors put it:
We draw two fundamental conclusions… First, it is clear that spreadsheet errors sometimes lead to major losses and/or bad decisions in practice. Indeed, we heard about managers losing their jobs because of inadequate spreadsheet quality control. Second, many senior decision makers whose organizations produce erroneous spreadsheets do not report serious losses or bad decisions stemming from those flawed spreadsheets. Hence, it seems in no way inevitable that errors in spreadsheets that inform decisions automatically lead to bad decisions.
But then again, it is in no way inevitable that they won’t. (Unless spreadsheets totally lack influence in your organisation, in which case why create them?)
Of course spreadsheets have their place. You use them all the time, and so do I, because they’re easy, flexible, and great for doing things “on the fly”. But a useful spreadsheet also has a tendency to grow like Topsy, until you start to worry that you’re not entirely sure exactly how it works, keep finding mistakes in it, notice “odd” results that don’t reconcile, and find that you’re spending inordinate amounts of time on it with relatively little to show for your efforts.
Or, to get down to the nitty gritty, you might remember times when:
- a formula was “temporarily” changed to a number, but not changed back again;
- a formula was changed, but the change was not copied across to other cells;
- an error was made when typing in data from a different source;
- cells were linked to an external table, but some of the links were misaligned.
We’ve all been there.
Once a spreadsheet becomes complex, or needs to be flooded with data from a database, or needs to run very similar calculations over and over again with different numbers, then it probably shouldn’t be a spreadsheet any more. NHS planning spreadsheets will typically tick all those boxes.
We ended the previous post with our Challenged Trust looking at its money quite differently. Instead of squeezing the biggest-spending budgets in time-honoured fashion, we now know which services are profitable and which are loss-making, which means we can focus on turning our loss-makers around without hurting our profit-centres. We also know the price of each theatre minute, bed day, X-ray and so on, making it much easier to spot things that look expensive (£1,300 for an ophthalmology inpatient bed day? £400 for a histology test?).
In effect, we have turned our organisation upside down.
Now we can see our income coming in at patient level, and our expenditure going out at patient level too. We can see how every part of the hospital is trading, not just with commissioners, but with every other part of the hospital too. Consultants are starting to wonder things like “if theatre time costs £25/minute, why are we wasting all that money by starting half an hour late every morning?”, and “why is the recovery room fully-staffed first thing, when the first patient never comes out of theatre before 9:45am?”.
These are good questions. If it was their money, they wouldn’t spend it like that. Suddenly they’re noticing a hundred details about the way they work that don’t make sense. But they still aren’t doing anything about it. Why? Because decades of experience has told them it isn’t worth the effort. But if it was their money…
Up in the management offices, we know we’re still struggling to turn our hospital around, to get it into good enough financial shape to be a Foundation Trust. Big organisations like this don’t go from awkward to nimble just like that. In a hospital, managers can’t implement change like we could in a factory. The Trust is full of autonomous professionals: medical consultants, nurse consultants, consultant scientists; they all have their own ways of doing things, and a fair bit of power to do it that way if they want. That’s a good thing, but it is also why change can be so grindingly slow, and often expensive if you have to lubricate the wheels of change with extra money. But time and money are the very things we don’t have.
It’s an old joke that a hospital would be a doddle to manage if it weren’t for the patients. But seriously, it would also be easier if it weren’t for the consultants. We could be running a superb Trust within months if our remit was to manage all the staffed facilities, including most of the nurses, but minus the consultants. Now that our newly-improved accounting has turned our organisation upside down, we can see a way of making that vision reality.
So we could have the GP commissioners buying orthopaedics directly from the orthopaedic surgeons, medicine from the physicians, and so on. The doctors could carry on working here as usual, and buy the theatre time and bed space and diagnostics from us. We could get on with running a great Foundation Trust with a large estate and thousands of staff, and they could get on with delivering the standard of care that GP commissioners expect, and using our facilities as efficiently as they can.
Working like that, it surely won’t be long before 9:01am is considered a “late start” in theatres. Who knows, we might even see anaesthetists wheeling the patients down themselves…
Better late than never… “the quarter” for Q4 of 2009-10 is out, and it’s the first edition to escalate any NHS trust to “Challenged” status in the tough new(ish) performance management regime. All in all there are six challenged trusts, including two who are there purely for financial reasons.
A lot has happened since Q4, of course, including the White Paper announcement that by April 2013 all NHS trusts should be foundation trusts. Yes, even the challenged ones, which is quite a stretch. As the White Paper said:
In the event that a few NHS trusts and SHAs fail to agree credible plans, and where the NHS trust is unsustainable, the Secretary of State may as a matter of last resort apply the trust administration regime set out in the Health Act 2009.
This is the rather scary procedure where a trust special administrator is appointed to “exercise the functions of the chairman and directors”. Not something you’d want to happen in your hospital, really. So let’s put ourselves in a challenged trust’s shoes. What could we do to avoid this fate?
Let’s assume we’ve already had a major cost improvement programme across multiple workstreams, got management consultants in to analyse this and that, delayed paying suppliers, made the most of our (ahem) coding opportunities, cut back on agency staff, all that kind of thing… and the numbers are still turning red. So we take a deep breath, and sit back. What isn’t working?
Everything we have tried has been directed from the top of the organisation. We did it for all the right reasons. Leaving things to line managers hasn’t solved the problem for the last few years, so why would it suddenly start working now? We needed to act fast, and be seen to act fast. How could we convince the SHA that we were solving the problem if all we could say was “line managers have been set tough targets”? So we took charge. But we haven’t fixed it.
Sitting back, we think how our management model is inherited from the block contracts of decades ago. Back in those days we used to receive an allocation of X millions to run the hospital, topped up with non-recurring money for service developments and waiting list initiatives. The number of patients we treated was separate from that, and we thought about activity more as a performance measure; if activity did have anything to do with money, it was a cost.
Nowadays patients come with tariffs attached, so in theory every part of the hospital is now an income generator and patients are business. The problem is that we still handle costs in the old way: this much for nurses’ pay, that much for pharmacy. When we cut costs, we look for big numbers in the expenditure tables (like pay) and then squeeze them, without really knowing whether those numbers contribute to profit or loss. So we might end up balancing the books this year by, say, cutting back on physiotherapy pay costs… only to push up bed costs because we can’t discharge orthopaedic patients on time, and wind up deeper in the red than before.
So we can set about making our numbers more useful. If we extended the work we have already done on costing, we could come up with something better. Not only would we get a picture of whether each HRG and specialty was profitable or loss-making, we could get back some really interesting numbers like theatre time = £25/min, or each bed day = £172 at site A but £98 at site B. These item-based prices are much easier to understand, and we can start getting a feel for whether things are good value or expensive around the organisation.
Armed with this kind of information, we are much better-equipped. We can steer clear of mutilating our profitable services, concentrate our efforts on the biggest loss-makers instead, and see exactly which parts of the organisation could lose a little weight. That might just be enough to dig us out of the hole we’re in.
It might also be enough to lead to something much bigger. Something that could turn our whole management model upside down, and step up to a new level of performance. But we’ll have to leave that for another post…
So here’s the situation. Your clinics are completely booked up with routine referrals for the next six weeks. But now an urgent referral comes in; the patient has something potentially nasty and you need to see them within two or three weeks. How do you squeeze them in?
If urgent referrals are very rare events, then you might force this patient onto a clinic by over-running the session, or cancelling another patient to make space. But let’s say urgent referrals are a normal part of your practice – what then?
One way or another, you need to make some allowance for them; the question is how. When a clinic is “completely booked for the next six weeks”, does that really mean that every minute for every doctor in every session is booked? Or do you only book 3 hours of each session, in the knowledge that a bit of time will probably be needed to squeeze in an urgent referral or two? Or do you regard follow-up patients as cancellation-fodder whenever extra time is needed? Or do you book the clinic not the doctors, so that each doctor is under-utilised?
None of these options looks very palatable in cold print. Wasting doctor time is the worst of all sins, because it inevitably means less-productive consultants, less-experienced juniors, longer waiting lists, and longer waiting times. Regularly cancelling follow-ups is either clinically risky for the cancelled patients (if the follow-ups are necessary) or a sign that too many patients are being followed-up (if they aren’t); in any case those follow-ups will only need to be rebooked later on, so the problem is deferred not solved.
The best approach is surely to plan for all doctor time to be fully utilised, and then carve out enough time for follow-ups (who are often entirely predictable well into the future: “come back in six months” means the need for that follow-up slot is known six months in advance). The remaining capacity is then available for new patients; some should be booked up with routine referrals, but some should be reserved for urgent referrals. So the question is: how much?
It turns out that the worst number of urgent slots is somewhat too many. On the assumption that patients are being booked using the best booking rules (you can learn all about those using SimTrainer), the following chart shows how performance varies with the number of urgent slots. In this chart, demerit points are awarded for different kinds of undesirable event: delayed urgent patients, delayed routine patients, rebooking patients, and booking patients at very short notice.
A lower demerit score means a better performance, so in this example (where 40% of referrals are urgent), the best performance comes from having 43% of slots reserved for urgent referrals.
You can use the booking rules calculator on your Gooroo dashboard (the page you see just after logging in) to work out the right number of urgent slots for your clinic. You’ll see that it depends on more than the number of urgent patients: the amount of other disruption such as cancellations matters too, as does the choice of a fully-booked or partially-booked clinic.
Happily, other factors such as the number of patients waiting, how quickly urgent patients need to be seen, whether waiting lists are pooled between consultants or not, and the amount of random variation in the referrals rate, turn out to make no significant difference to the number of urgent slots required. Some of these do affect overall performance though, but we will have to leave that to a further post.
For full details of our research into reserving urgent slots, see Research White Paper 2.
In his blog, Paul Corrigan repeats a familiar and widely-held view of the NHS commissioning reforms:
The Government plans to bet the whole of the NHS on the belief that GPs can deliver a business model that can buy £60 billion of NHS health… it is to be hoped that GPs understand how to operate in a business this size. …they will need skills that can work businesses with a turnover of £200-300 million pounds – hundreds of times bigger than the normal GP practice.
Dramatic. Astonishing. And thankfully, nonsense.
Firstly, GP’s already “understand how to operate in a business this size”, i.e. the size of the NHS, because that’s where they work now.
GPs also know how to “buy £60 billion of NHS health” (or at least their share of it) because every referral is a purchase, and that’s how much the referrals add up to. Each purchase is decided by the GP; and they always have been, which is why PCTs (and Health Authorities, and District Health Authorities, and Area Health Authorities before them) could never control their budgets.
So if the world is not going to change overnight for those GPs who aren’t actively involved in consortia, what about those who are? Will they be running giant corporations? Hardly. Here are some examples of real “businesses with a turnover of £200-300 million pounds”:
- Bovis Homes (466 employees)
- Majestic Wine (800 employees)
- Photo-me International (1,485 employees)
- Oxford Instruments (1,531 employees)
Even those GPs who are running Consortia will not need “skills that can work” businesses like these. They won’t be operating, managing, or even supervising this value of care. Instead they’ll be commissioning it. Quite different.
So what skills will commissioning require?
We could look for an answer by turning to present-day PCTs. There exists a long and dreary list of all the things that PCTs (supposedly) do at the moment. But do they really “undertake service redesign at a health economy level”, or “manage the local provider market”, or even “provide effective support for carers”? And even if they set their minds to it, could they? The reality is that, no, they couldn’t. Many fine words are written, but they are unmatched by deeds. Back in the real world, providers carry on doing their own thing; many carers remain ineffectively supported. GP Consortia do not need to take on the burden of pretending to deliver all that, and I’ve never met a GP who would want to anyway.
Nevertheless, commissioning something as complex as healthcare is a delicate business, requiring a high level of specialist expertise and commitment. The commissioner does not need the very high level of specialist expertise possessed by the provider, but a high level of general training and experience is certainly needed in order to place orders intelligently. The commissioner needs to be able to evaluate the needs of each case carefully, and commission a level of healthcare that is proportionate to that.
Strip all the fancy language away, and you can see that this is what GPs do all the time. They are general practitioners after all; not specialised, like consultants, but highly trained and experienced nevertheless. They use their skill and judgement to decide whether and how to refer each patient on to secondary care. That referral is equivalent to placing an order: commissioning, in NHS parlance. Which is what they do already: being GPs, not some multi-gazillion pound Master of the Universe type thing.
Neither is it a harmless pastime to exaggerate the challenge facing GP commissioners. Yes, they will be taking on more than they do now; they will have a budget to manage within, after all. But there is no need to make the challenge bigger than it really is or it might scare even the able ones off.