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How we took control and became more efficient

BMJ 2011; 342 doi: (Published 31 May 2011) Cite this as: BMJ 2011;342:c5072
  1. Michael Griffith, consultant cardiologist,
  2. Jonathan Townend, consultant cardiologist
  1. 1Department of Cardiology, Queen Elizabeth Hospital, University Hospital Birmingham NHS Foundation Trust, Birmingham, UK
  1. michael.griffith{at}

The years of increased NHS spending under the last Labour government delivered an increase in the volume of healthcare, but no improvement in efficiency and productivity.1 Many factors contributed to this situation, but a major one was probably the lack of any attempt to incentivise clinical staff. Instead, a system of mandatory performance targets has been imposed from the centre, often leading to unintended adverse clinical consequences. Additionally, the allocation of departmental funding on the basis of the past year’s spending creates a perverse incentive to increase rather than reduce costs. The disadvantages of such a centrally planned economic system on workers’ motivation have been well described.2 3

Personal financial gain is a widely used motivator and is very powerful, but that power can lead to inappropriate clinical decisions. The suspicion that the saving of money based on personal financial gain results in inappropriate and even inferior care has harmed the relationship between patient and doctor.4 5 Incentives to improve performance that cannot adversely affect clinical care are needed. We believe that these should include pride in the quality and reputation of the service and in the ability to provide better patient care. Importantly, these incentives need to be implemented in a group of a manageable size that allows members to feel some control over their workplace and to participate actively in improving clinical and financial management.6 In order to use these principles we have created a foundation group that works semi-autonomously within a large NHS foundation trust.

The main ethos is to produce a better quality and higher volume of care at equal or lower cost. The cardiology department within University Hospital Birmingham NHS Foundation Trust provides a full range of tertiary cardiac services to the local population and to the West Midlands. On the payroll are 188 employees, including about 100 nurses, 40 physiologists, 13 consultants, and 14 junior doctors. The cardiology foundation group began its operation in April 2007 with a budget of about £13m (€15m, $21m). It has weekly business meetings, a monthly board meeting, and a six monthly “away morning” to discuss strategy. Group income comes mainly from the NHS tariff system. Expenditure is calculated from pay and costs that include all drugs, consumables, and equipment. A powerful incentive to improve efficiency is that financial gains made by the group remain largely at the disposal of the group (rather than being returned to the trust) to spend in any manner that further benefits the cardiology service. Any surplus achieved (after deduction of the annual cost improvement programme) is divided, with 60% being retained by the cardiology department and the remainder going to the trust.

Following the introduction of foundation group status, the numbers of inpatients treated annually increased from 3573 in 2007/08 to 3829 in 2008/09, and the number of outpatients increased from 19 650 to 23 735. This increased activity was achieved without an increase in expenditure or facilities. During the group’s second year, in 2008/09, there was a retained surplus of £624 000 owing to a combination of cost reduction and increased income from the increased activity. This has been used to purchase new equipment, including circulatory support devices for use in high risk angioplasty, a new intra-aortic balloon pump, electrocautery, a new electrophysiology mapping system, and a cardiopulmonary exercise system.

Many factors have led to increased efficiency, but three prominent examples are:

  • All catheter laboratory consumables including devices were put out to tender by the group every six months, producing savings of over £670 000 in 2007/08.

  • A switch to a cheaper glycoprotein IIb/IIIa inhibitor anti-platelet agent achieved savings of approximately £15 000 per month.

  • The appointment of a catheter laboratory co-ordinator nurse improved mean use of the catheter laboratory from 86% to 96%, increasing numbers of procedures and reducing waiting time for the transfer of patients from outside hospitals.

The creation of NHS foundation trusts was an effort to improve management by granting a degree of local clinical and financial autonomy. Further devolvement to “foundation groups” creates structures that retain the public service ethos of the NHS but have demonstrable capacity to increase clinical activity, quality of care, and productivity. We suggest that this management strategy should be offered widely to NHS hospital departments. If similar improvements in efficiency were achieved in other services, patient care could be further improved at a time when financial resources are likely to be severely restricted.


Cite this as: BMJ 2011;342:c5072


  • Competing interests: All authors have completed the ICMJE uniform disclosure form at (available on request from the corresponding author) and declare: no support from any organisation for the submitted work; no financial relationships with any organisations that might have an interest in the submitted work in the previous three years; no other relationships or activities that could appear to have influenced the submitted work.


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