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NHS Bury Primary Care Trust: Improving the Budgeting Process in NHS Trusts

Published 24 May 2010 | By Datawatch Europe

As staff costs appear as a key element of the reports assembled at Bury, the relevant data has to be extracted from ESR and merged with other cost data from the mutually incompatible ledger system. A more cost-effective approach is to find a way of capturing the data streams from the different systems at the point where they generate a "clean" report and merge that information into the required format...

NHS Bury draws diverse streams of information into coherent reports using Monarch Pro.

Managing the finances of any business turning over in the region of £300 million is a major responsibility which can become a serious challenge if timely and accurate information is not readily available. When the 'business' involved is an organisation within the NHS, that challenge increases by an order of magnitude. Not only does the organisation have to budget and account for its own activities, but its finances must dovetail into the bigger picture of NHS funding and accounting practices.

Within the NHS structure, NHS Bury, the local Primary Care Trust (PCT), is the purse-holder sitting between the Department of Health and services such as general practitioners, dentists, NHS hospital trusts and specialist service trusts.

The geographical scope of a PCT is determined by practical considerations which often find it matching the local government boundaries of the population it serves.

There is administrative logic in maintaining those common borders, and that is the case with NHS Bury in Greater Manchester. Its footprint is the borough of Bury, where it serves a population of 183,000. This makes NHS Bury the smallest PCT in Greater Manchester, though it still accounts for an annual budget of circa £300 million.

Its budget is used in part to purchase primary health care services from its local GPs and dentists. At this primary care level, NHS Bury operates its own service provider arm, an arms length organisation known as Community Services Bury, which supplies a range of community based services including but not limited to district nursing, health visiting and learning disabilities services. The greater part of the funds at the Trust's disposal, however, is paid over to the secondary health care sector to purchase the services of consultants and other specialist medical resources. And to complete its portfolio, the Trust funds prescriptions and drugs for the local community.

Financial reporting

As the assistant finance director for NHS Bury, Lee McMahon is responsible for preparing the financial reports for the Trust's Board and executive management, who need the information for day-to-day budgeting.

He must also ensure that financial data is compiled to meet the reporting obligations of the Trust to its regional Strategic Health Authority – NHS North West (one of ten supervisory authorities in the NHS), which has to be able to assess its current quarterly position and forecast how this will change.

Mr McMahon noted that careful control over budgets in each of its 'markets' has ensured that NHS Bury delivers its services cost effectively. "Having operated below budget in areas such as servicing prescriptions, some of the external pressure is reduced and we can concentrate on managing the Trust’s finances to give even greater value for money."

PCTs are a more recent development along the 60-year NHS time line; the tier of health administration inheriting IT systems that had been installed to meet a variety of objectives in earlier incarnations of the NHS structure. Given that history, which directly impacts upon NHS Bury, increasing financial effectiveness further through the use of improved information systems might seem a tall order.

There are probably fifteen different applications providing the financial data on which the Trust's reports are based. Legacy systems are prominent, including the main accounting system currently in place there, the Accpac general ledger.

Increasing financial efficiency

Ensuring that all of the data at the disposal of NHS Bury could be applied to increasing the Trust's financial efficiency gave Lee McMahon and his team an objective: "It has been to create a data extraction system that we can apply across all of the databases we employ to isolate the layers of data which are relevant to decision making, and extract them in the most appropriate format."

Closer examination of the way in which different data streams have to be collated to produce management reports explains why the financial team is pursuing that goal. For example, every PCT has a responsibility for the salaries and related costs of its staff.

To ensure consistency in this area, the NHS has introduced a single HR system - ESR (Electronic Staff Records) - which has been rolled out across all NHS organisations in phases over five years.

Merging staff costs from ESR

As staff costs appear as a key element of the reports assembled at Bury, the relevant data has to be extracted from ESR and merged with other cost data from the mutually incompatible ledger system.

"To have built an application specifically to read the data output from those systems, and merge it consistently into our financial reports would have proved expensive using a conventional IT development approach. It would also have involved modification if any data fields in either system were to change over time."

A more cost-effective approach was to find a way of capturing the data streams from the different systems at the point where they generated a 'clean' report and merge that information into the required format. The IT sector is not lacking in solutions for 'mining' data from the databases held on multiple systems, but the saving on development costs in this instance would not have been significant given the expertise required to write and maintain the routines which bring all of that data to a common denominator format capable of being merged.

Experience of report mining

There was another approach – report mining – which Lee McMahon had first encountered in a previous post within the NHS. "The requirements for drawing together the output from multiple IT systems were very similar. A colleague at my previous employers had introduced me to Monarch from Datawatch. By extracting information from reports, rather than from the databases which generated them, Monarch was able to simplify the process of collating this into the kind of reports that we needed to run the operation effectively."

McMahon developed that point. "A problem had been that the systems in place could not provide the reports that our budget holders needed to make the most effective decisions on their future strategy. “As an illustration, the payroll system reports only on the actual costs incurredin each financial period. But the Trust needed to be able to factor into its budgets the annual cost increases which would have to be met. While the percentage increases are known, it would have taken a further report to marry up the information with the current salaries data from ESR." Data modelling within Monarch An important feature of Monarch is that it supports data modelling and is therefore able to absorb these 'flat' files and produce very simply the projections required alongside the multi-sourced financial reports.

"We found that it took minimal development time to produce a complete suite of financial reports to add further value to the information we hold. Just as important, perhaps, there was no expensive maintenance involved when the underlying data changed for any reason. Our stakeholders are able to use information that would not be available as rapidly and cost-effectively if we were not using Monarch: working directly with the raw data would take three to four days to manipulate it into a report, for example."

The modelling capabilities of Monarch are proving invaluable in the Trust's cash flow planning, allowing the impact of external factors to be assessed. The UK Treasury has imposed a 10-day limit on payments by Government departments to its suppliers – except (at present) the NHS which has been excluded on grounds of its scale.

Were the measure to be implemented in the health sector at any stage, there could be a serious impact on the liquidity of PCTs whose suppliers include other NHS tiers and third parties.

"Apart from showing us how well we are meeting our present payment targets, Monarch can predict accurately how much additional liquidity would be required as we moved progressively from the present payment terms towards the ten-day figure. The Strategic Health Authority appears to have been impressed with the quality of information made available."

Delivering to stakeholders

Important though Monarch has been in extracting the information needed from the transactional systems in place at Bury since it was installed in 2004, Mr McMahon has so far made no reference to how the system delivers its 'conclusions' to the stakeholders. Does the functionality within Monarch mean that the 'intelligence' it produces is immediately available only to the trained users, who in turn produce the management and SHA reports?

The product's specification clearly indicates that it can export reports directly into Microsoft Excel format, allowing information to be distributed readily to any executive with access to that ubiquitous desktop tool. A primary destination for the applications at NHS Bury, however, is Microsoft Access databases. "This is another export mode for Monarch reporting: there is a seamless transition from the report mining and modelling stages, and the one-click process can be automated so that data is fed into Access without any additional coding. That is consistent the Audit Commission's view that the public sector should try to source information once, but apply it numerous times."

The saving of time in preparing reports is perhaps not the only benefit in employing Monarch. Once the development team has set up the routines which extract data from the component systems' reports, it requires no additional programming skills to maintain the tool’s performance.

More time for decision-making

Rather than seeing this as a progressive de-skilling of the tasks, it means that the staff responsible for applying the information generated can spend more of their time in decision-making rather than computation.

The early days of computing were beset with problems caused by a lack of foresight on the part of developers: wholly erroneous or misleading results were generated because quite basic checks and balances had not been built into systems.

Monarch, it appears, has gone the extra mile in handling logical discontinuities in the data being reported. Lee McMahon cited the example of the staff numbers field exported in reports from the ESR Human Resources system.

"If raw data from ESR were to be exported into a database, and the field was showing zero staff, a null entry would be made instead of a zero. Any attempts to aggregate those staff totals would yield an incorrect result. Monarch scores heavily by recognising that a zero is implied and makes an intelligent conversion of data rather than simply re-formatting it."

Opting for Monarch Pro version

When NHS Bury considered purchasing the desktop version of Monarch, it had two choices – the standard and professional versions of the tool. The Trust opted for Monarch Pro, which supports the extraction and importing of data from reports in PDF format rather than just columnar file format.

The additional cost per desk - £460 rather than £380 – was justified by the increased performance, as McMahon explained. "To download the ledger as a text file and bring it into Monarch would have taken nearer 12 hours, compared with the 10 minutes needed to extract from the PDF."

Convinced of benefits

The financial accounting team at NHS Bury is clearly convinced of the benefits attributed to Monarch. When a user gains considerable working knowledge of a product, however, a handful of minor problems might emerge. Listening to the commentary at Bury, it appears that there was a minor irritant rather than a major problem. It is that if the report mining tool could be linked directly into the ESR database rather than to the reports it generates (so that Monarch was viewing payroll data in real time), there would be a saving of about 10 minutes on each run.

As the task is repeated two or three times every day, there could be additional savings of around 2.5 hours per week. In the total picture of the Trust's financial management, that would be a very small benefit, and certainly not one whose omission would take anything away from the case for Monarch.

Providing succinct information

Lee McMahon would be the first to set that 'defect' in context. "Financial efficiency in a PCT is about managing data to provide succinct information – reports – on which effective decisions can be made. With its ability to drill down into multiple data sources and its modelling facility which extrapolates that data to provide previously unavailable information, Monarch has proved to be a major contributor to that decision-making process."