Why NHS agency cap reporting is inadequate

Nurse using a touch-screen tablet in hospital

Faced with the largest NHS deficit to date and a £3 billion agency bill, in November 2015 the Government decided to implement a cap on the pay of agency workers within NHS trusts. Since then, it has been reported that 90% of UK hospitals are breaching price caps every week. In December 2015, regulators estimated there were 21,277 overrides; by March 2016, this figure had escalated to over 70,000. Considering demand for agency staff has remained unchanged, these figures strongly indicate that price caps have not delivered the savings originally anticipated by the Government. The incompetent reporting provided by NHS Improvement to the Government on a weekly basis is a major cause of this.

If you can’t measure it, you can’t manage it

As part of the price cap initiative, trusts are allowed a ‘break glass’ provision to enable them to override caps on ‘exceptional safety grounds.’ Trusts that breach this provision are required to submit a weekly return to the regulator (NHS Improvement) to highlight the number of breaching instances. However, trusts are not required to provide details of how much rates have been escalated above the ‘ceiling’; therein lies the problem. How can the Department of Health reduce the cost of agency spend if they are only asking NHS Improvement to provide them with data on how many occurrences a trust requests an override? Considering overrides have now reached 70,000, certainly more detailed management information (MI) is needed to allow them to make improved decisions and understand where the problem areas are. To demonstrate how ludicrous this fixation on reporting just instances is, I have put together the following example:

Last month, a client of ours sourced an agency worker from one particular supplier at a price of £22.35 per hour over the NHS February cap. The same month, a different supplier provided a candidate at just 82p over the price cap. This is obviously a massive discrepancy, however, when it came to reporting these overrides to Monitor and TDA, the only information provided was the figure ‘2’. The first candidate cost the trust an additional £229 for a 10.5 hour shift, while the second cost just £7.79 extra for a 9.5 hour shift. These financial costs were not provided to the regulator, nor were they requested by NHS Improvement to help manage the agency spend. If the Government is so committed to clamping down on “extortionate” sums paid for agency workers, why isn’t cost the focus of their reporting?

Better data = better decision-making

NHS Improvement needs to rethink their reporting criteria in order to be able to answer crucial questions such as:

  • Based on 70,000 breaches up to March 2015, what was the total overspend outside of the price caps?
  • What has been the trend of overspend since the introduction of the price caps in November?
  • Which trusts have outperformed others in reducing their agency spend?
  • What is the average overspend per week per trust, staff group, specialty, band or grade?
  • Since the introduction of the caps in November, what has been the percentage increase of overspend after each tranche has been implemented?
  • For the 90% of UK trusts that have breached agency caps, are there instances where suppliers or candidates have continued to charge the same amount?

Why is this reporting template failing the NHS?

The regulator is too fixated on the number of times trusts breach the agency caps rather than on the financial savings or transparency on agency spend. The number of occurrences does not show the actual cost of agency spend across the UK. If the Government wants to target agencies’ extortionate hourly rates, why does NHS Improvement not report on this? Without better MI, the Government cannot understand where the problem lies, how big it is and how it should be tackled. On 1 July 2016, NHS Improvement will implement another cap on the maximum hourly rate agency workers can receive. However, reducing rates further won’t solve the deficit problem; it will merely result in trusts producing more insufficient reporting for the Government.

While HCL, as a healthcare supplier, understands and supports a programme to reduce reliance and cost on agency spend, the main focus needs to be on why this is happening in the first place. The simple answer is that there are not enough skilled, qualified and available permanent workers to fill gaps in rotas. Reducing rates for candidates and agency providers will inevitably mean temporary workers will be less willing to fill these gaps and ultimately put patients at risk. By monitoring the costs of the breaches rather than the number of instances, the regulator can concentrate on suppliers that are severely breaching caps rather than those that are slightly breaching.

April 11, 2016

Lauren Kavanagh

Marketing Manager