Conclusions and recommendations
1. The Department underestimated the cost
of the new contract by at least £150 million.
It did not model its financial assumptions in a rigorous way and
did not draw, for example, on all available workload data. The
Department should use sufficient, relevant and reliable data to
cost new policies more accurately.
2. The Department did not pilot the new contract
before implementation, and it underestimated the scale of change
in introducing the new contract. The
implementation of the new contract was rushed and hospital trusts
concentrated on getting new consultants on to the new contract,
rather than planning how to use the contract to improve the delivery
of services. Major new Human Resource policies should be fully
piloted within the NHS before implementation to test any assumptions
and effects.
3. Many hospital managers negotiated more
hours with consultants than their NHS trust could afford.
NHS trusts failed to set a cost envelope and clinical managers
agreed hours of work based on historical patterns of working,
which they could not afford. In taking the contract forward, NHS
trusts should set boundaries within which managers should negotiate
individual contracts based on a clear understanding of what work
the trust needs and can afford.
4. Productivity of consultants has decreased,
consultants are now working fewer hours than they did under the
old contract, and activity per consultant has reduced. The
Department expected that the new contract would deliver productivity
gains of 1.5% per year through efficiency gains and quality improvements.
The Department's original method for evaluating productivity suggests
it has decreased by 0.5% in the first year of the contract. The
Office of National Statistics has now developed more sophisticated
measures of productivity but figures are not yet available for
2005 and 2006. NHS Employers should help NHS trusts identify appropriate
ways of measuring and comparing productivity of consultants locally.
5. NHS trusts with their clinical managers
did not have the time or expertise to negotiate or carry out effective
job planning. The Department
and NHS Employers should develop training aids and tools, such
as electronic job plan software, to help managers improve their
capability and capacity to carry out effective job planning, and
NHS trusts should allocate enough time to medical managers for
job planning.
6. In the first two years of the contract,
job planning tended to follow historical patterns of service provision,
with insufficient links to organisational objectives and little
consideration of redesigning services, such as introducing evening
clinics, to meet patient needs.
NHS trusts should agree job plans, in partnership with consultants
or teams of consultants, which are consistent with organisational
objectives and reflect feedback from patients. Whilst job plans
should be renegotiated annually, managers and consultants should
assess individual job plans more frequently and agree to modifications,
where appropriate, if they fail to meet patient needs.
7. The proportion of time consultants spend
on direct clinical care has not reached the expected 75% level,
and NHS trusts have not used the contract to extend patient services,
such as providing out-patient clinics at the weekend.
NHS trusts should negotiate job plans for consultants based on
the Department's objective that at least 75% of their time should
be spent on direct clinical care. They should use the job planning
process, in partnership with consultants, to redesign services
and improve the patient experience. NHS Employers should identify
and share good practice in using job planning to extend patient
services and tailor them to patient need.
8. Consultants' pay has, on average, risen
by 27% in the first three years of the contract compared to the
Department's prediction of a 15% increase. Higher
pay has helped improve recruitment and retention and has halted
a rising trend in the amount of private practice carried out by
NHS consultants. The increased pay will only be justified, however,
if the expected improvements to productivity are achieved. In
return for their increased pay, consultants should increase their
support for service redesign with the aim that productivity gains
will be achieved by working differently.
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