Feature / Digital dilemmas

There is no argument that digital services have the ability to transform the way care is delivered in the NHS. But making the case for specific initiatives is different to more traditional capital investment. More rigour and realism is needed in digital business cases compared with those that have gone before. There should be a sharp focus on benefits realisation from the outset. And the funding process – in particular the timing of funding support – needs to change to support the delivery of successful projects.

Making the case for digital investment was the topic debated at a recent HFMA roundtable, supported by analytics, digital products and advisory service company Optum UK. It gathered together finance and business planning leads with clinicians and digital information officers from NHS bodies across England to identify some of the challenges of taking digital programmes forward and how the process could be improved.

All participants agreed that business cases for digital programmes needed to improve. It can be challenging for NHS boards to decide whether to spend scarce capital resources on digital projects or more traditional bricks-and-mortar-type schemes given the significant build-up of backlog maintenance.

Jonathan Whittaker, digital transformation delivery lead at University Hospitals Birmingham NHS Foundation Trust, said business cases needed to be rigorous and concise, with a clear focus on benefits realisation from the start.

This is particularly important for projects that need to justify spend, where the primary aim isn’t a cash-releasing saving but to target seeing more patients with the same clinical resource.

‘We’ve put in a framework to help new projects, or where people are coming to us with ideas for digital transformation, which helps to quantify expected benefits from the outset,’ Mr Whittaker said.

The approach effectively asks scheme proponents to set out how a project would score in terms of making the best use of resources, improving patient outcomes, equitability and patient experience. ‘It allows us objectively to say how much of a benefit, or negative impact, we expect a particular project to have in each of these areas.’

He said the approach aims to support decision-makers in deciding between the relative merits of different ways of delivering services. It helps to compare projects involving different points of delivery or in different parts of a pathway and to quantify the impact on resources – be that consultant, nursing, administration, artificial intelligence solutions, or other technology.

‘For each area where we need a decision, we can produce a formula – often this is how many more high-quality decisions can be made with the same amount of clinical resource due to the new technology,’ Mr Whittaker said.

In effect, it involves calculating a financial cost per patient for reaching a decision via the different routes. ‘Each of our projects has a clinical, operational, nursing and finance lead. We’ve been working really closely with finance colleagues to help quantify financial benefits alongside operational and patient benefit, even where there isn’t a cashable benefit.’

Sam Simpson, chief financial officer at Greater Manchester Integrated Care Board, agreed with the need for business cases to be realistic and take into account the full staffing and cost implications of their proposals.

She said business cases also need to be written with some understanding of where the funding might come from. Finances are extremely tight in general and there is insufficient capital to cover demand – in Greater Manchester the capital envelope does not cover the provider depreciation.

Realistic approach

Schemes that do not generate cashable savings, but instead just offer the potential for productivity improvement, may still gain approval. But business cases need to be realistic about what will be delivered so that properly informed decisions can be taken. That means identifying the full costs to the system resulting from an investment and the real, ongoing workforce implications.

‘For example, a new investment in a digital solution – where there is capital funding available, but no revenue funding to address the revenue consequences of the capital investment – will be a cost pressure for the system unless a funding source or offsetting cost savings are identified,’ Ms Simpson said.

Business cases must not overstate the benefits that would be delivered, she added. ‘The problem is that if you can’t deliver them, then you have a credibility issue. So, we have to be more robust about what we can do.’

She also called for more bravery in recognising the potential for digital solutions to lead to a reduction in workforce. ‘We have got so many gaps in the health and wider care sector and there is enough work overall,’ she said. ‘So, if there are things where we can genuinely manage with less workforce, we shouldn’t be shy about saying it. We have to use digital technology so that it is better for the workforce we still have and to help us manage some of those gaps. We should see digital as an opportunity, not starting from the presumption that we need all the existing staff and more.’

Zoe Keddie, chief digital information officer at South London and Maudsley NHS Foundation Trust, said business cases needed to be better at articulating the value of savings that would be delivered over the long term.

‘You may not get immediate cashflow savings from digital projects,’ she said. ‘But what you will get, hopefully, is improvement in health outcomes that are going to lead to savings further down the line.

‘So, you may be seeing more patients sooner, or better managing a long-term condition, so that they are not going to be a cost pressure further down the line. That is as much a benefit as a cashable one.’

However, she argued that business cases also needed to recognise the significant amount of time and money needed to support digital implementation. And sometimes it might be better to improve the use of existing technology rather than simply digitalising further activities.

‘Digital literacy is actually quite poor among clinical staff,’ Ms Keddie said. ‘If your average band 4 or band 5 nurse comes into an organisation and they are confronted by a bunch of digital solutions that they can’t understand, let alone use – if they don’t get the training, they will leave.

‘So, there is a case for spending more time with what we have got and using it smarter, rather than constantly being distracted by new innovations.’

She added that time should be allowed for digital solutions to become embedded and adopted – and expectations should be managed around this.

The importance of recognising the value of future cost avoidance was underlined by Liz Sanford, director of operational finance at Norfolk and Norwich University Hospitals NHS Foundation Trust.

She agreed that affordability was a key consideration. But cost avoidance could be just as important as making cashable savings, and decision-makers needed all the information to be able to compare different proposals – those making outcome improvements, those making immediate savings, and those avoiding costs or delivering over the long term.

‘Our virtual ward programme is effectively a cost avoidance investment,’ she said. There are direct costs for set-up and staffing, but improvements in patient flow due to released acute capacity. ‘Business cases need to pull all of this out so that decision-makers can make an informed decision,’ she said, adding that following the government’s Green book on options appraisal supported such an assessment.

‘Honest business case’

Jason Kirk, head of business planning and cost improvement at East Suffolk and North Essex NHS Foundation Trust, coined the phrase of the day by calling for ‘honest business cases’. Such a case would provide a full estimate of all the costs and be realistic about what would actually be delivered. In fact, he suggested it would be better to ‘underpromise and overdeliver’ and not the other way round.

Ms Simpson also highlighted problems with the current capital allocation system, in particular the timing of allocations and the release of funding for nationally funded schemes.

‘It can take some time for business cases to be approved, especially for larger scale projects that require national approval. And that can mean that the costs are inflated by the time of approval, but the funding doesn’t change.’

She added that the timing of when public dividend capital is confirmed and the date by which it must be spent to ensure that it is not a charge against the capital allocation can be a challenge for effective planning of the overall capital programme.

Jon Cort, chief digital officer and consultant in anaesthetics and intensive care medicine at Chesterfield Royal Hospital NHS Foundation Trust, added his voice to the calls for the capital allocation process to be overhauled.

He said he was in the middle of a full business case for an acute electronic patient record. ‘But I won’t get awarded the funding until about September. And I then have to spend 55% of my allocation before the end of the financial year.’ This was ‘simply not possible’ and would create PDC difficulties.

He added: ‘While doing this, I have to hold my chosen vendor to account. I could bank the money with the vendor, but as soon as you are not holding them to account via milestones, they can go off the boil.’

Mr Cort said old capital processes created for bricks-and-mortar-type projects were being transposed onto digital projects, without recognising their different characteristics. He suggested there could be a role for the HFMA to lobby the Treasury for a ‘different type of business model’ for digital projects that was still transparent and supported accountability, but operated in a way that ‘did not force us to waste’ funding.

Mr Whittaker said we often spend a lot of time ‘getting business cases over the line’, but wondered if enough time was spent on post-evaluation. ‘If more time and effort went into that and there were more visibility, support and accountability for achieving business case deliverables, that would help to make sure people were as open as possible when those cases are written,’ he said. ‘But we must not wait until towards the end of the project to start doing that evaluation,’ he said. ‘We need to get visibility of how benefits are being delivered from the outset.’

Using virtual wards as an example, he said his trust had set up a dashboard at the start of the programme so that they could see in the first few months if it was delivering the expected benefits. Starting early could even highlight areas where the data flows do not currently exist to enable evaluation, so this could be fixed.

Mr Kirk also warned against thinking that technology was the endpoint, when really it should be seen as an enabler. ‘This should really be about streamlining a process and then embedding a new digital process,’ he said. ‘If you do it the other way around, there is a danger you just enshrine your old, inefficient process in digital code and never move on. And, if you have to spend the capital really quickly, you don’t have the time to do that streamlining and process review.’

Streamlining efforts

Jim Forrer is a GP and a clinical lead for Optum. While a single national system may not be the right solution, he asked the attendees whether there was an argument for not requiring all 42 integrated care systems or more than 200 trusts to all produce business cases for the same solutions. In some instances, should there just be an ‘a priori understanding’ that something delivers benefits, he asked.

For example, individual GP practices did not have to develop business cases for the introduction of electronic medical records. The current duplicated effort looked ‘remarkably inefficient and questionable’ from the outside.

Ms Simpson said the NHS could definitely get better at accepting evidence of benefits proved elsewhere, rather than every organisation having to develop its own proof.

But she underlined that going down a national systems route was difficult given the separate statutory status of NHS bodies. Even trying to get a common approach across a system could be challenging. She pointed out that organisations were coming from different starting points and had different priorities that were often related to historical levels of funding available. They wanted to be able to demonstrate benefits in their own context.

She acknowledged that the different digital maturity of different organisations in a national health service was hard to justify to the public. The creation of integrated care boards (ICBs) created possibilities to take system-wide approaches, she said, given that boards provide a significant element of revenue funding for providers and have a role to play in allocating additional capital funding within the system.

Mr Cort also underlined why national systems were unlikely to work. ‘[National solutions] don’t take into account the local historical IT legacy,’ he said. ‘For example, patient administration systems ordering and prescribing systems are all running out at different times,’ he said. ‘So having a one-size-fits-all approach won’t work.’

However, he added his voice to calls for system-wide approaches with ICBs setting out digital convergence strategies.

There is a difference between identical systems and ones that could work with each other and present data in a uniform way. ‘I don’t think we need to say everybody has to have the same system,’ said Mr Kirk. ‘But we need to look the same to the outside world and have interoperability – even if it means having a menu of a number of choices of systems.’

Interoperability issue

Ben Roberts, associate director of finance for the West Yorkshire Association of Acute Trusts and the roundtable’s chair, agreed. He said better interoperability held the key to unlocking major benefits in terms of sharing public health data and moving more into population health management.

‘[Different parts of] Amazon all run off Amazon web services and there is an underpinning structure of language they all use. But we all use different languages,’ he said. ‘We’ve always wanted to invest more in public health, and digital is another way we can do that. But we’re not yet getting into that preventative space with digital.’

A balance is needed between getting ‘commonality among ourselves, while also trying to feed in innovation from our partners and suppliers’, he added.

Dr Keddie was worried about the number of digital solutions being pitched at the NHS, which she argued was why a robust business case process was needed. But she said the NHS could be better about sharing business cases between NHS bodies – something that happened rarely, even within the same system.

‘If I ask, I might get it,’ she said. ‘But it is not the cultural norm. And there are opportunities around shared procurement – North Central London did a shared procurement for its system-wide virtual ward solution.’

Mr Roberts said the NHS did not have massive amounts of experience in overseeing digital projects. ‘When we look at a building project, the quantity surveyor gives us our optimism bias and there are standard national metrics we all have to use about how much your bricks are going to go up in 18 months. But when it comes to digital, we are in quite an immature space in knowing what resources we need – I don’t have a tick list of the people I should expect to see on a costing sheet, for example. We just don’t have the expertise.’

Ms Simpson agreed. People understood the terminology in bricks-and-mortar projects, but it was much easier to be ‘bamboozled’ by more technical programmes and language. The challenge does not stop once a system has been procured. Implementation is another area where the NHS doesn’t always get it right.

Victoria Underhill, a director in Optum’s population health management team, said one of the issues the company comes across is NHS bodies cutting the budget for implementation. ‘One area where it seems easy to cut costs is by not going for a full implementation partner for large-scale digital change,’ she said.

Trusts might decide they have pockets of their own expertise, or get a contractor in for part of the work and perhaps a consultancy to provide some mentoring. ‘This can create a kind of mixed economy of implementation support. We hear anecdotally that that is really challenging, because you need to invest in somebody who is going to manage the change process from end to end.

‘Certainly with electronic patient records, you need a kind of broker who will interact with the vendor to get value for money and support you to get the best outcomes,’ she continued. ‘[If you try to do it on your own], it can be really difficult to recruit to these integration architect and other complex roles. So trying to make this blended economy work well is really hard.’

Mr Roberts summed up the discussion by saying digital business cases needed to be more robust. This meant identifying full costs and being clear about what could be delivered and in what timescales – and then monitoring the delivery of those benefits.

In general, there needs to be much greater focus on implementation, rather than solely on making the original case for investment and procurement. The NHS has to be more comfortable with the language of digital. But there is also a role for the centre in refining the capital allocation and approval process. Systems and providers need certainty over funding and sufficient time to spend funds to maximise value. 

 

Participants