Editor's blog Tuesday 5 April 2011: Demand management penny drops in media, as BMI Healthcare bet on growing self-pay market

It has been pretty clear for some time that, in dealing with financial stringency, one of the responses PCTs have been using is demand management, more or less explicitly.

This evening, this story is 'breaking' on BBC News via a survey of members of the British Orthopaedic Association. Referral thresholds have been changed, leading to restrictions and delays.

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Click here for details of 'Andrew Lansley's Millwall Tendency', via subscription-based Health Policy Intelligence.

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The timing is interesting, because today a regular Health Policy Insight reader forwarded us a letter from BMI Healthcare, whose text is copied below.

You will see that the same issues are starting to bite the private sector as well.

You will also see that one of their hopes for financial recovery is in creating new self-pay pricing structure for individuals. Oh, and they're obviously also sacking people in head office, and making hospital managements take on more risk.

We live in interesting times.

"Dear Colleagues,

I am writing to update you on important changes soon to take place in our hospitals.

"As you know, the continuing recession has had a significant impact on the demand for private healthcare services nationwide. Both the private medical insurance and self-pay markets have experienced a decline; and whilst for a time there was great potential for private healthcare providers to offset this decline by accepting more NHS work, this is now unlikely to come fully to fruition due to the impact of the more recent budget cuts taking place in the NHS.

"With these factors in mind, and as part of our ongoing commitment to achieving excellence through innovation, BMI has re-examined the way its hospital structure operates within the current economic and healthcare landscape.

"As some of you already know, the BMI management team has been carrying out a strategic review of its business as well as a benchmarking exercise where we compared the processes, resources and results of similar sized hospitals. This has provided us with valuable insight into how we can adopt the best practices of top performing departments in the group to work more effectively and still deliver the same high levels of patient care.

"The review is now complete and we have identified a number of tactics which, once implemented, will dramatically improve efficiency for our hospitals as well as promote growth in the long term.

"Over the next couple of months, and before Easter, we will be making a series of operational changes to hospitals throughout the group which will include:
Improvements to theatre scheduling to ensure no slots are wasted
Increased focus on the training and development of theatre staff to reduce the need for agency cover
Reduction in overtime
Reassessment of need for filling job vacancies on a like for like basis – for example, making team roles more flexible to cover a wider range of activities, and eliminating the use of skilled clinical staff for full time administration tasks

"In addition, we will be creating a new business model which reflects the demand for new forms of healthcare delivery, including setting up a new self-pay pricing structure, working closely with GP consortia and developing new and innovative services.  

"We will also be streamlining the BMI regional structure to allow our talented hospital teams to have greater responsibility and accountability for their strategic development and performance. Lastly, we are making a number of changes at BMI’s head office which will result in a leaner structure, focused on supporting growth initiatives.

"We hope that you will join us in welcoming these changes to our ways of working. We are confident that these adjustments will lead to greater success, improving not only business performance but most importantly our ability to efficiently service the evolving needs of our patients and consultants".