The need for point of care teams to operate as a business unit

Abstract
All point of care services, regardless of size and complexity, should be operating as a business unit with clear financial goals and accountability. Point of care testing is one of the specialist areas of healthcare that continues to grow in diversity, scope and impact. A functional business unit will have strong leadership, a medium to long term financial plan, and the business acumen to deliver continuous improvements to patient care within the assigned budget and by accessing new funding. This article demonstrates the steps needed to run a specialized healthcare service as a business.

Tony Cambridge – Managing Director
info@thornhillhealthcareevents.co.uk ; info@poctinnovators.com

The Need for Point of Care Teams to Operate as Business Units

The healthcare landscape is changing at a rapid pace with more emphasis on value-based care, budgetary control and improved clinical outcomes for patients. Point of care testing is one of the specialist areas that continues to grow in diversity, scope and impact. It is my belief that point of care services must be run as business units, led by qualified individuals and supported by organisation leads and wider network influence.
The financial element of healthcare is often lost on some, with the focus being solely on patient outcomes regardless of cost. This is an admirable approach and clearly puts the patient at the centre of care delivery. In the real world of financial constraints this is not an approach that can be sustained, with limited budgets, value on investment considerations and accountability for spending public or company money.
This article aims to demonstrate how point of care services must be run as a business, and what needs to be in place to achieve this. After many years of successfully implementing change whilst delivering financial value and running my own company, I can say that following this guidance will support your current service or the transition required to act like a business.
Firstly, every clinical specialty must have designated staff who are knowledgeable of, and committed to delivering, point of care activities for the specialist unit. Without this level of buy-in, small point of care teams will be buried by the scope of their own service, regardless of their level of resources.

Each clinical area will have their own budget. It is essential that part of this budget is clearly defined for point of care testing which will be explored further in this document.

Lacking the ability to identify spend is a major factor in losing financial control and ultimately a failure to demonstrate value.

Autonomy

One thing that sets business units apart is the level of autonomy granted. This is unlikely to be complete autonomy, but a delegated responsibility to qualified individuals who manage the budget for the organisation. This requires those involved to be knowledgeable of business practices, with a designated level of accountability and oversight. The oversight is there to review any spend above a stipulated amount, giving the service more autonomy when committing smaller amounts. The thresholds must be determined by the service leads and follow the organisation’s own financial instructions.

Budget control is a term that most NHS services find difficult to deliver due to competing priorities. Overspends are analysed, discussions held, and budgets reset at a higher level the next year in anticipation of the same level of overspend, or services are cut.

Temporary spending freezes are a frequent feature in public healthcare, resulting in the pause of agreed projects resulting in inertia and demoralisation of teams.

The patient certainly does not benefit from this approach. Instead of applying these control measures, services must have a better understanding of the current spend, upward trends in use of tests, increasing supplier costs and have a detailed understanding of service objectives including cost breakdown. Factors that cause budgets to spiral out of control, or be insufficient in the first place, is a lack of business planning, or allowing the unknown to derail the agreed objectives. If your service has set objectives, stick to them.

If another project must be undertaken, say to address a clinical risk, this is the point to review the budget, resources needed and where these might be funded from. Knowledge of the different sources of funding within the organisation, across the network or from central funds is key to successfully navigating these challenges.

Bidding for Funding

It helps to have advocates in positions of influence, and to develop relationships with the committees reviewing the bids being submitted.

Procurement teams and financial officers must have a full understanding of the impact of point of care services on patient care, flow and discharge of patients.

This sits alongside the impact of pathology laboratories where results can take longer to generate for some of the tests available at the bedside. Organisations will have a range of committees that review new spending requests, so it is important to engage with the correct committee for your request, including revenue and capital. This may result in new funds being drawn down, other funding being redirected, or refusal. If a bid has been refused, understand why and resubmit at the earliest opportunity describing the clinical risk of not introducing the change, or providing further supporting data to support your claims.
The more successful bids you achieve, the more likely future bids will be accepted, especially if funding previously allocated has been demonstrated to have been used effectively. Use previous successes to support your future bids, which gives confidence to those allocating funds.
Many costs will be fixed within your service, potentially due to contract agreed pricing through tender processes or other contract awards. Procurement teams must be strongly encouraged to control any increases proposed in these contracts or on products that sit outside formal contracting. National benchmarking is required to avoid paying inflated prices for products widely used across the healthcare landscape. Prices may also be different through the NHS supply chain, so it is worth checking any cost increases against any uplifts allocated to the supply chain. It is procurement’s responsibility to contest any above inflation increases. However, unforeseen increases in raw
materials, freight or levies, will hit the commercial industry hard. Those costs will sometimes need to be passed on to the customer, although I’ve experienced many instances where these costs are absorbed by the supplier for long periods.

Leadership and Oversight

A functional business unit will have strong leadership. In the commercial world there will be individuals in designated roles such as Chief Financial Officer (CFO) and Chief Operating Officer (COO) with specific responsibilities for the delivery of the business model, and ultimately the success of the company or service. This is certainly true of the NHS structure, along with several subordinate roles delivering the oversight the CFO cannot. The issue remains that these roles are there to control spending and doesn’t necessarily assure value in spending.

The clinical and operational leads who are knowledgeable about the impact of new testing or improved pathways need to be the ones with the autonomy to act, free from the constraints of numbers on a spreadsheet.

That being said, not many scientists have business qualifications in these roles, nor do job descriptions describe anything further than ‘will be responsible for the budget…’. Person specifications in job descriptions need to state the level of knowledge and qualifications required to lead a service designated as a business unit. Those operating in these roles must be able to demonstrate significant business acumen, have a track history of delivering change within financial constraints, understand the financial framework of the organisation and the healthcare system, and be able to produce compelling business cases grounded by detailed financial data. Recruiting the right people into these roles is key to the successful delivery of a business enterprise. Individuals must be paid accordingly.
A level of regulation and accountability is required and must be described in the point of care policy where the structure is defined and accountability agreed. Reporting structures must be known and adhered to. The committees reviewing bids must be well publicised, how regular they meet and the relative timelines for decisions. If there is an appeal process or resubmission process, it must be documented so to reduce delays and confusion.

For end users who wish to drive change, the point of care service must have an internal application process for any new device, test or process. These applications must be reviewed by a formal group defined in the point of care policy and accompanied by terms of reference which states the function of the group and the eligibility of the members.

Applications must consider the full-service cost from start up to the ongoing revenue requirements. The cost of training staff, estates work, IT installation, capital costs, connectivity costs, must all be defined along with any cost avoidance, cost savings or downstream savings that can be identified and shared across budget silos.

Successful Planning, Vision and Objectives

All point of care leads should have a 3-to-5-year roadmap in place that defines the direction of the service for the coming years. This requires an advanced level of horizon scanning, industry knowledge and awareness of national changes in healthcare policy. Without understanding the direction that technology is moving in, services will stand still, fail to be innovative and fall behind the curve which ultimately disadvantages patients. Having links with the commercial sector is paramount in understanding developments in the in-vitro diagnostics space.

“The implementation of POCT into our patient pathways can bring fundamental change to our health systems and a joined up, team approach is a clear route forward.”

Lucy Lehane, Diagnostics Expert. Lehane Consulting Ltd.

Equally important is the resourcing factor. It takes months or more to recruit an appropriate staff member into a qualified, state registered role. It takes longer to secure funding to grow the staffing resource in a point of care team. As part of the roadmap, service leads must bid for staff regularly and be committed to fighting for those posts as they are more than likely to be rejected if not accompanied by a detailed business plan and impact assessment.
Leads must be aware of the business planning cycle but be prepared to work outside of this cycle to gain traction and support for the strategy you will need to develop and deliver. A well thought out strategy, considering all known parameters in the 3-to-5-year roadmap, is more likely to gain support than a hastily written business case requested by line managers a couple of months before the budget is reset for the coming year. Always be prepared, always be scanning for the next opportunity, always be aware of funding streams and who to have those exploratory conversations with.

Budget Control

So, this brings us back to control. Someone has to be responsible, and someone needs to be reviewing performance versus spend. This is surely best delivered by the service operational lead with appropriate support and the qualifications/experience to deliver the business element of the role. This support will usually take the form of the financial framework which offers guidance on how to review the budget data, analyse the cause of variation, and take action to understand the factors driving that variation.
Besides the monthly budget review, there must be a calendar of quarterly business reviews of the service, and with suppliers, to review service performance, test use, clinical outcomes and vendor performance. This allows for regular adjustments to be made to ensure good control of spend or an understanding of cost pressures that are becoming unavoidable. This may be driven by organisational decisions on care pathways, short term initiatives to free up capacity in hospitals, or the increase of point of care use outside of the hospital setting such as urgent treatment and diagnostics treatment centres.

The bottom line is that a business unit must demonstrate value on investment, be capable of delivering positive change through astute use of funds and to grow the service effectively through service delivery and recruitment strategies.

Business Intelligence

Key performance indicators (KPIs) must be defined to show the service is delivering on its objectives, and clear business reports should be available to executives and financial officers to ensure an appropriate level of autonomy continues. Other measures that must be considered include restricting the use of specialist point of care tests to defined clinical staff or teams. This includes stewardship of devices and tests located in protected units for specific uses as defined by patient symptoms or referral pathways. Specific panels of tests can be developed for patients presenting with certain suspected conditions, or as defined in national or local guidelines for testing. What must not happen is that expensive tests designated for use in specific cases are accessed by the wider clinical specialties.
Point of care testing middleware can be used to monitor activity and to generate KPI related reports. They will not provide much in the way of financial analysis and point of care teams should consider investing in a business intelligence solution which can be used to analyse the cost effectiveness of the service, breaking down the cost per analysis and the overall value delivered in patient care.
This is where audit is effective in controlling use, with clinical audits performed by those teams using the tests to show the efficacy of the solution in that setting, or by a third party or someone neutral. Measures can be taken to prevent inappropriate access to these tests and allow cross charge for any inappropriate use discovered.
Service leads must consider partnerships with commercial healthcare companies who can offer the business acumen that may propel the service to become a business unit. This does come with many considerations around exclusivity, restriction of choice and ultimately the function of the service if not all elements can be delivered by one vendor through a managed equipment service agreement.

Services must retain the ability to enter tenders and mini competitions at will, so that innovative diagnostic developments can be adopted at pace if so required.

Conclusion

All point of care services, regardless of size and complexity, should be operating as a business unit with clear financial goals and accountability. A suitable structure should be implemented that allows for a degree of autonomy backed up by reporting mechanisms and a deep understanding of the organisation’s financial framework. Those appointed as responsible officers should have the experience and qualifications to deliver the role, and develop close relationships with procurement, finance, recruitment and suppliers for the business unit to mature. Medium to long term vision and strategy is the key to success, re-evaluating risks and challenges on a regular basis so that the focus can shift to meet the clinical demand.
If a new priority emerges, a current priority must be deprioritised through agreement.
The route to accessing funding must be clear and attainable, with business plans and resource requirements continuously updated based on the shifting healthcare landscape. The main thing is to avoid overcommitting to new projects when resources and funding are not guaranteed, not applied for or clearly at risk of not materialising.
Ultimately, the focus must be on value-based care to ensure funding is effectively used to deliver positive patient outcomes.
For further discussion and insights related to this subject, and across the in-vitro diagnostics landscape, contact author Tony Cambridge, Managing Director of Thornhill Healthcare Events Ltd and owner and creator of POCTInnovators.com
info@thornhillhealthcareevents.co.uk
info@poctinnovators.com