An economic case for workforce planning

Overview

In this article, we’ll argue that, despite recent history, treating healthcare staff as a cost and not an asset needs to be reversed when developing workforce plans and approaches in 2022.

Currently, many organisations and systems that we have worked with are seeing staff as a cost. Requests to hire staff are scrutinised and blocked, vacancies are seen as a way of reducing overspends and capacity plans to recover backlogs are essentially just plans to “sweat the assets”. As well as damaging the staff experience and damaging service-user outcomes, this is leading to the opposite of what it intends – an increased cost to serve.  Systems and organisations need to build in time for training, upskilling and nurturing staff when developing workforce plans in a world of rising demand levels – and view staff as an asset by measuring their impact on the service, not their cost.

 

 

This will be done in four ways:

1. Demonstrating the economic value of the health workforce

2. Investing in real, appreciative leadership from the front-line, down to central departments

3. Dual Transformation: Empowering staff to innovate to solve problems while the big redesigns are happening

4. Defining the rules of working in an era of high activity.

 

History

We’re old enough to remember back to the early 2000’s when the talk in health trusts was all about cost control and cost reduction. When trusts that were underperforming financially needed to develop a Cost Improvement Plan (CIP), a Performance and Efficiency Plan (P&E), Cost Reduction & Efficiency Scheme (CRES) or some other management consultant led strategy for operating within their means.

At the time, these would focus on the scope for reducing whole time equivalent posts on the basis that the workforce accounted for nearly half of healthcare costs.[1] However, this looked at our workforce through completely the wrong lens. Instead of seeing the NHS workforce as a cost that needs to be controlled, we should be appreciating that health professionals are a valued asset to be nurtured.

Trusts looking at “cost” explored two choices to control it – either to pay less into staff bank accounts or to pay less into suppliers’ bank accounts. Again, that is, in itself, correct if you are just looking at these resources as a cost, as this sees workforce spending as undesirable and something to be reduced.

The drive to reduce costs normally came from a need to balance costs against income. The system of payment models was designed to allow money to follow patient activity, at least for secondary care. So increased demand for secondary care usually resulted in increased income for secondary care at the expense of community and mental health services. The then Primary Care Trusts (PCTs) that were underperforming financially were usually doing so because demand grew faster than income, or because money was being sucked into acute settings through the tariff.

[1] In 2019/20, 46.6% of the NHS budget related to workforce: https://www.kingsfund.org.uk/audio-video/key-facts-figures-nhs

 

The Present

Fast forward to 2022, through the days where the waiting in A&E and eventually for elective care burst through the allowed maximums, through the folding of PCTs and the invent of Clinical Commissioning Groups (CCGs), through the years of COVID and the urgent suspension of contracts and payment models and emerge into a nascent world of Integrated Care organisations, population health and more efficient care coordination. Now there is a lot more discussion about demand and inequality than there is about cost. Now there is a lot more discussion about workforce morale, wellbeing, retention. Now there is a lot more discussion about training and support. Specifically, the conversation is about the shortage of staff needed to meet demand, and for a few years now, we have no longer been talking about staff from the perspective of cost.  Despite the fact that the current government has seen fit to cut pay to NHS staff in real terms…

This challenge of not having enough staff to meet demand is a failure of workforce planning. An understandable failure, given the issue of COVID, though it builds on significant planning weaknesses for many years before the pandemic, but a failure, nonetheless. To address this, all Integrated Care Systems (ICSs) are being asked to develop a workforce plan.

In The Bumper Book of Health & Care Workforce Planning, Colin has detailed the basics of writing a good workforce plan, including: 

| Clearly set the challenge for all organisations and individuals in the system, and align and monitor the delivery of activity against the main challenges

| Focus on delivering a small number of high impact changes centrally, one of which should be building world-class leadership and management skills

| Consider a balance between system transformation (population health management, care delivered closer to patient etc); redesign in key areas (cancer, mental health, urgent care etc); and enabler programs (growing your own staff, international recruitment, leadership etc)

| Secure investment to target at priorities.

The Future

Up until halfway through the pandemic, following this approach to developing workforce plans in ICSs would have been enough. But COVID has changed the game even more fundamentally. People in many sectors have begun to re-evaluate what their lives are all about. Even in non-frontline or key-worker industries, we have seen The Great Resignation in many countries (‘Great resignation’ sends UK quit rate to highest since 2009, Evening Standard 23/Jan/22). People are leaving the job market in droves, spending less money and more time with their families. At the same time, those that bore the brunt of the pandemic have suffered significant moral injury (see previous article), are more likely to be ill and are starting to leave the profession faster. Following the main thrust of the pandemic, there is now greater underlying demand for healthcare (long-COVID, mental health impacts etc), pent up demand in waiting lists and fewer people to deliver care. The balance between supply and demand isn’t just out of line – it has practically collapsed in a heap.

So, those developing workforce plans have to try to sort this out, and the traditional approaches are going to need turbocharging. We are going to value people in health and care far more in the future than we have ever done. And I don’t mean that we are going to have to clap them every week, we are going to have to really value them – and part of that will be showing everyone what their value is. If we don’t do that, then history will repeat itself and we will be back to looking at their cost – and that will keep us in a vicious cycle.

To address the workforce challenges of 2022, we’ll need to consider four things. There are probably more, but we’ll start you off with these:

| Demonstrating the economic value of the health workforce

| Investing in real appreciative leadership from the front-line all the way down to central departments

| Dual Transformation: Empowering staff to innovate to solve problems while the big redesigns are happening

| Defining the rules of working in an era of high activity.

But now it is time to take another step forward when developing workforce plans.

Demonstrating the Economic Value of the Health Workforce

Back in those days of staff cost control, we used to see vacancies as a blessing – some money saved to offset budget overspends. But what does that say? That staff is cost, and if we had fewer people, we’d be all right – as if actual healthcare just happens, by magic. The reality is that the value of staff is in its efficient and effective delivery of required health and care and the valuable activities that surround it. Only by existing and delivering can it have value, and we need to do a better job of assessing and celebrating the value, as well as understanding its cost in a much more mature way. 

Value

So, the value of healthcare comes in its efficient and effective delivery and the valuable activities that surround it.

 

| We need to look at the real value of this work – the impact on the health and the wealth of the population, the nation, or the world as a whole. Reduced days lost to sickness, reduced costs of care for the elderly, higher productivity for people, the happiness of people, more children in school rather than in hospital or ill at home etc.

| We need to be able to compare the value added by people with that added by other parts of the process (the drugs, equipment, buildings etc).

Cost

The true cost of healthcare staff isn’t in how much we pay people, it is in all the money that is paid for the activity that is not efficient or required. If we wanted metrics that accurately identified staff cost, we would look at:

| Cost of time wasted on activities that aren’t valuable

| Underperformance – more time overall spent on delivery care than is optimal to produce the best value

| Cost of career changes due to people leaving for sub-optimal reason

| Vacancies and sickness – because that would mean that value is not being added.

| Presenteeism – people turning up to do work that is not actually advancing the patient and thus adding value

| Cost of people dropping out of training courses because they haven’t had a good experience

| Cost of people leaving because management hasn’t inspired them etc.

Our systems need to identify, monitor and address these costs – not the total cost of staff.

Value vs Cost

Finally, we need to consider the balance between the value added and the cost.

Investing in Appreciative Leadership 

Even pre-COVID, we would have argued that a focus on real leadership and management skills in healthcare is the single best investment that could be made. High performance, great levels of care, reduced waiting lists, lower costs and higher morale flows from the quality of the leadership and the management in teams, organisations and systems. Post-COVID, with staff having many more options, will require this to be turbocharged – and systems will need to value their people. Appreciative leadership is one way to do this.

Dual Transformation

Pre-COVID, we were already seeing the redesign challenge in health and care outstripping the supply of time, people and skills to be able to deliver it. The lack of proper system working, the high workloads and relatively unstructured investment in redesign have led to a world in which transformation is needed across health and care systems. A focus on population health, lean digital systems (still with a human element), movement of some elements of care out of secondary care, community teams, greater self-management, use of wearables and genomics etc. need to be quickly worked through and brought into being to address the health and care challenges of 2022 and beyond. But it is going to have to be done properly and will take time. In the meantime, there are a large number of innovations in care models, workforce models, technology and other areas that need to be implemented quickly in teams and organisations. We need a system of dual transformation, where teams are given the skills, permission, structure, and time to innovate within a framework that protects current practice,  fairness, safety and prudence.

 

The Rules of a High-Activity World

Doing any sort of workforce redesign is tough at the moment with demand massively outstripping capacity. The result is huge pressure on staff, leading to moral injury and a vicious circle in which staff leave or are ill, which puts more pressure on those left. Just asking people to spend time embedding innovation, going on leadership development courses, and leading system redesign programmes whilst they also deal with enormous demand pressure is not going to work. We need to set the rules for the world where demand outstrips supply – we can’t always be putting development on the back burner because we need to deliver a vaccination programme by the New Year, or because just this patient must be seen. There are going to be more crises. There are going to be people who really should have received care by now. But by constantly dealing with the short term, we are imperilling the long-term. It should not be up to staff to make all the decisions on what is, essentially, rationing of healthcare – if we ask that, then we risk damaging losing those people.

No problem is insurmountable – we just need to focus on real discussions about the number of staff we have, on understanding the immense value they create in meeting the need for health and care, and on monitoring and rewarding that rather than seeing them as a cost.

Rarely, though, are the skills of workforce planning and workforce economics combined. This presents a real opportunity for the new ICS to design value into their workforce plans from the very start. By treating the workforce as an asset rather than a cost, the ICS can translate health need and triple aim goals into a statement of workforce demand which goes beyond traditional practice and uni-professional headcounts. By treating the workforce as an asset rather than a cost, the ICS can create a plan which translates the relationship between workforce wellbeing and talent development into actions to improve the quality and quantity of supply.

 

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