QIPP

QIPP goes by various names, "the Nicholson Challenge" and "efficiency savings" being the most common. The former was a phrase coined by Stephen Dorrell, the Chair of the Commons Health Select Committee and includes the name of the man who will be responsible for the programme: Sir David Nicholson, former member of the Communist Party and Chief Executive of the NHS and soon-to-be Chief Executive of the NHS Commissioning Board.

QIPP stands for Quality, Innovation, Productivity and Prevention. As a patient my priorities are Q-P₂-I-P₁ (that is, productivity last), with the Q and P₂ (prevention) almost equal priority. However, the government's obsession with QIPP is on P₁, productivity. This is because it is ingrained in Tory DNA that the NHS wastes money and is a waste of money. The Conservative zeal for QIPP is the last chance for the NHS to make amends for its waste. The idea behind QIPP is that the NHS must improve productivity through innovation and prevention while keeping quality high. There are some enlightened people in the NHS who point out that improving quality will, in the long term, reduce costs, but improving quality often requires investment and this is not a short term "efficiency saving" which is the government's obsession.

QIPP is steeped in mystery. The NHS has always been concerned with productivity, this is not surprising because, as a taxpayer funded system, the service is always under pressure from the Treasury to reduce its costs so that the taxpayer pays less. The most recent source of QIPP comes from the McKinsey slidedeck provided for the Department of Health in February 2009 and published in May 2010. The main points of the summary are here:

Notice that the "efficiency savings" are £13-20bn over 3-5 years. In March 2010 the Department of Health described QIPP as being "£15-£20bn [savings by] 2013/14", which is a 3 year efficiency drive if you assume that QIPP would start in April 2010. The 2010 Conservative majority government morphed QIPP into £20bn "efficiency savings" over the period 2011/12 to 2014/15. QIPP is expected to extend beyond 2015 and may last until 2017 or even 2020. It is not worth spending much time reading the McKinsey report because it is just a series of graphs and assertions with no cited evidence.

The interesting figure is that £20bn is the funding gap between what most economists say the NHS will need and the flat funding (in real terms) that the government allocated in the October 2010 Spending Review. That is, if NHS funding increased at the rate that is needed to take into account demographic change and healthcare inflation, the service would need £20bn more (real terms) in 2015 than it does now, but the Spending Review has allocated the NHS the same amount of money (real terms) as now. There is a lot of evidence that the NHS budget drives QIPP rather than the results of QIPP determining the NHS budget.

An example of the funding gap can be seen from the slidedeck McKinsey produced for NHS organisations in London (released to Health Service Journal via a Freedom of Information request). This graph shows the funding gap between flat funding and the amount of money needed to meet healthcare activity (ie the treatments needed by the population) for London. This gap is similar when extrapolated for the rest of the country.

The government eulogises over QIPP, and their favourite phrase is "We are delivering efficiency savings in order to reinvest every penny of that for the benefit of patients." This implies that when an efficiency is identified it results in a pile of cash which is then spent on something else, that we need. This is not the case. The "efficiency savings" is the grey area in the graph above: the area between the money that is available (the lower black line) and the money needed (the upper black line). It is money that does not exist. QIPP is ghost money.

It is a large amount of ghost money, too. The Year/The Quarter, which is the annual report of the NHS says that QIPP delivered £5.8bn of ghost money last financial year, 2011/12 (which, interestingly, it describes as "the first year of QIPP"). However, this document does not say that this money will be "invested" anywhere, because, of course, it does not exist: it is money that the NHS would have spent if it had not done the same work "more efficiently" than in the previous year.

So, are there any examples of QIPP? Yes, lots. The NHS Evidence website has a subsite devoted to QIPP. For example, Wrightington, Wigan and Leigh NHS Foundation Trust provided details of a project to reduce patient falls in hospital. In 2008 the trust had a high number of patient falls, 7 for each 1000 bed days, which is in the middle of the national variation between 3 and 12 falls per 1000 bed days. Patient falls are upsetting for the patient and they are dangerous, but are preventable. Falls are also costly because they lead to further treatment and longer stays in hospital. The National Patient Safety Agency estimates that falls cost NHS trusts in England £15m a year (or £92,000 for an 800 bed hospital). The costs of the project were estimated to be £15,000 startup costs and £5,000 maintenance costs per year. You can immediately see that if the project reduces the number of falls there will be an increase in Q and P2 (prevention) of QIPP and if the number of falls prevents more than £5,000 of extra treatment and bed-days then there will be a rise in the P₁ of QIPP (rise in productivity through reduced costs). The project involved training staff, providing equipment (bed rails and non-slip shoes) and additional risk assessment to determine which patients were susceptible to falls. The actual results are that there was a 34% reduction in the number of falls over the whole trust in 9 months. The target was to reduce the number of falls by 50% and it was estimated that this would save £120,000, so a 34% reduction would save around £80,000.

This example is quite easy to understand, and reducing the number of falls is the right thing to do, even if it didn't save any money. However, hospitals don't have a separate "falls fund" from which they can draw money if someone needs treatment due to a fall and if the "falls fund" has money left over at the end of the year, an ability to spend it. Instead, the PCT will pay for the extra treatment: the saving is in less PCT spend. The hospital does not benefit from this QIPP saving because the saving is money they will not see. So it is disingenuous for the government to say that this money is "reinvested for the benefit of patients", it isn't. The £80,000 "saved" will contribute to the £5.8bn quoted by the Department of Health. Yet this is ghost money that does not exist.

QIPP is worth doing for the Q and for the P₂: better quality care and prevention of illness. But some of the case studies on the NHS evidence site appear to take the  idea too far that QIPP is about productivity. For example, the first recommended example on the site involves the Royal Cornwall Hospital Trust providing intravenous iron to patients in their homes and community hospitals rather than in hospital. This is likely to provide better patient experience and hence increase the Q in QIPP, but the case study focuses too hard on productivity, to the point of producing what appears to be nonsense figures.

The example says that many patients have to travel up to an hour to get to hospital and that some patients needed hospital transport which was an additional cost to the treatment. The case study calculates the "savings" between treating patients at home or in a community hospital, compared to receiving the treatment in hospital. The calculations are (to say the least) a little dodgy. The case study says that the cost of the treatment in hospital is £113 per treatment (excluding the cost of the drugs) and one third of patients will need NHS funded transport at an average figure of £20 per treatment. They say that there are 163 patients receiving the treatment in a community hospital and 17 in their homes, so 180 people in total were not having the treatment in hospital. Each patient will have 6 treatments every year so that means that there were 1080 treatments not being carried out in hospital. Using the figures of cost per treatment and cost of travel they calculated that if those patients had the treatment in hospital it would cost £129,520 (1080 x £113 + 1080/3 x £20) [the QIPP document has a typo and gives a figure £1,000 less]. The issue is: is it cheaper to treat the patients in the community? To do this they should provide the cost of treating the patients in the community hospitals or in their homes. The QIPP document says:

"The cost calculation assumes a reduction in the cost of hospital appointments to the PCT, but does not appear to include any increase in costs at the community hospitals. The costs are absorbed into the daily costs of the community hospitals. The cost of consumables and healthcare professional time is met by the PCT. On this assumption the scheme generates savings of £29,000 per 100,000 population."

The population of Cornwall PCT is 450,000, so the QIPP saving is obtained by dividing £129k by 4.5.

It is naive to say that community hospitals will do the work for free, and really is not a sound basis for estimating "efficiencies". There will be a cost in providing the treatment in a community hospital or at the patients home, not least the cost of a district nurse travelling to the patients home and spending time that could have been spent on another patient. The treatment in the community may well be better for patients, who will have to travel less far, but there is no evidence presented to show this.

So this "evidence" says that £29,000 can be saved per 100,000 population, but there really is no evidence to support this. Presumably when a trust says "x% of our patients have their intravenous iron in a community hospital" this is entered into a spreadsheet that converts the number of patients into a "saving" based on this "evidence" and the "saving" is added to the grand total that, at the end of the year, appears as £5.8 billion. The question is: how much of the £5.8 billion is based on similarly dodgy evidence?

There is some doubt whether QIPP savings are savings at all since there are some quite unusual calculation methods. But even if the calculation was sound, the QIPP savings are not real money that can be spent because it is money that was never available to spend. QIPP is the grey area of the graph that does not exist.