Reducing the cost of medical locums

Hospital doctors

04 / 8 / 2016 Midnight

Though there are a range of steps that NHS trusts can take to reduce the demand for locum doctors, the need for organisations to employ flexible staffing models will mean that it is not possible (or desirable) to completely eradicate the use of locums. It is therefore vital for trusts to ensure that when they do employ locums that they procure the highest quality staff in the most cost effective manner.

Manage all medical shifts effectively

One step that NHS trusts can take to reduce expenditure on medical locums is to ensure that the most cost effective approach is taken when utilising substantively employed doctors. The NHS Improvement agency rules include price caps and wage caps which set the total amount a trust can pay per hour for an agency worker. The price and wage caps include hourly rates for doctors for both core and unsocial hours. 

It is also important to have a thorough understanding of rostering practices in order to review and manage the substantive workforce as effectively as possible, without risking banding appeals. NHS trusts should therefore take the potential replacement cost of locums into consideration when deciding how to deploy substantive staff, especially in under established areas with a focus on ensuring the highest quality care in a cost effective way. However, when taking such an approach, trusts must ensure they fully consider the various compliance issues surrounding junior doctor rotas.

Create organisational or region wide medical banks

One way that many trusts have sought to reduce the cost of temporary nursing (and to a lesser extent admin and clerical and healthcare science) staff is through the creation of ‘banks’. While the specialised nature of most medical posts means that only in certain specialities in very large trusts may this be appropriate, one option being considered by many is to develop a bank operating across a small region or health economy such as the area covered by a procurement hub or more informal arrangement.

There are a variety of ways a model such as this could work including using a lead organisation to operate the bank or alternatively asking a third party to run the bank on behalf of the NHS trusts. Clearly a major issue when determining the appropriate route to take would be the capacity and technology to run such a system, as well as the expertise to manage areas such as employment checks and invoicing. However, there are simple systems available such as the use of text messaging that can alert locums of available shifts.

Employing such a model ensures that money stays within the NHS.  Before developing any such arrangement, participating organisations should ensure that they are fully aware of all tax implications for the trust of establishing such a scheme.

A collaborative approach can also be taken on a smaller scale through the use of region-wide rate agreements. These agreements have been considered in a number of areas and operate through organisations agreeing a set rate that they will not exceed for a locum doctor. The rate is determined by the grade and speciality of the doctor.

Use procurement frameworks

As part of the NHS Improvement agency rules, trusts are required to procure all agency staff via framework agreements approved by NHS Improvement.  Although each type of agreement works differently, generally speaking framework agreements ensure that all workers supplied through agencies signed up to the frameworks comply with standards surrounding employment checks and are supplied at a certain price.

Limit the number of agencies used

Trusts can gain greater control of their use of medical agency staff by working with fewer agencies for the supply of temporary medical staff. This can also help with producing better management information through clearer administration of rates and billing (see below for more information) and can allow trusts to save money by achieving economies of scale. As has been seen at United Lincolnshire Hospitals NHS Trust working with one (or few) supplier(s) can help increase fill rate of vacant shifts through the development of a mutually beneficial relationship.

NHS trusts are increasingly considering master or neutral vendor models. These can help with produce high quality management information and transfer the risk and responsibility for administering a system to suppliers, which in turn can assist trusts in meeting back office efficiency targets. 

Ensure billing procedures are robust

Due to the devolved and disparate booking mechanisms some trusts have in place, the invoicing and payment for shifts worked by medical locums can often be inaccurate and vulnerable to abuse. For trusts to be sure that they are paying only for shifts that have been booked and worked (and that they are paying for the correct amount of time taking account of breaks etc), it is vital that there are robust systems in place.

One way that organisations can do this is through the introduction of e-billing systems which can in turn be linked with a central booking system and the trusts own e-rostering system meaning that the process is joined-up and comprehensive. Again, this will help give trusts the detailed management information they require in identifying areas of high cost and will aid them in forming comprehensive workforce plans based on finance and activity information.

If electronic systems cannot be implemented it is vital that trusts check off invoices against a rota to ensure they are paying the correct amount for services received.

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