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Efficiency? I went to A&E the other week and told I had to have an operation. I waited for 4 or so hours for a bed to become free. After my operation the next day I was free to go once I had got my medication brought over - that took 4 hours. So I was taking up a bed for 4 hours just waiting to leave. How much is cost per hour of bed? Maybe I was waiting so long to come in because someone else was waiting for their medication?
This shows that people simply do not understand healthcare. I'm guessing that you were in a large hospital which would have had dozens of people going home within the same few hours. To have enough pharmacists or techs available to give you your drugs immediately would be stupid - that gives you part of your wait. Also - the drugs dont magic their way to your bedside - they need someone to take them to you. Sometimes that is a porter, sometimes that is a nurse. For a porter or nurse to go to pharmacy for one persons drugs would mean that they wouldn't have time to do anything else, so they wait until they have a decent amount to do. They then need to check that the correct drugs have been sent up and that you know how and when to take them. That's the drugs side of it taken care of - I can see how that would take upto four hours.
The waiting for a bed thing - yes there may be someone in it. Other delays include they entire bay needing to be thoroughly cleaned. They may need to change the type of bed that you would be going into. They also need to tell the nursing and medical staff on the receiving ward what's wrong with you and what your needs are, and any drugs that you need.
To be honest that is merely skimming the uppermost surface of what needs to be done for a patient to leave or go to a bed in a hospital.
Four hours is not a lot of time.
Indeed it seems to me that a 4 hour wait is remarkably efficient for a hospital. There should be control of expenditure within the nhs but imo there is absolutely no place for profit in the nhs
I had experience last Summer with a City Council who gave a % on top of cost.
School refurb. Contract signed at a fixed price. Extras would be negotiated labour cost, and parts at 'cost plus 4%'.
Of course, we didnt go out and buy the cheapest item to keep costs down.i.e. an over door fan heater was required.
We charge these out at £150 typically, they cost us £120ish.
But 4% of £120 isnt worth our time, so we ordered a well known brand at £450ish.
The Council paid £468, we made £18 to supply it.
So if we'd supplly our usual Model, the Council would be £300 better off, and we'd have made £30 on it rather than the £18 we got.
It is stupid Council Officials who cannot see they are costing the Tax payers money by their stupid buying polices.
Same with repairs - same council,they ask for a quote, we say it can be done in 10 minutes, so we'll do it while we are there, they say no, we want a quote, we then charge them twice, once for a quote, once for the repair - they are paying double the cost, because of their daft policy.
We tell them it would be cheaper if they did it differently, they are not bothered.
It's funny, whenever we whinge about stuff like this, to clients/public etc, we always get the "oh the poor contractor, my heart bleeds". When you do public sector work as a private contractor, profit is a naughty word. We struggle to get engagement from our sub contractors because of the unrealistic margins and risk.
So why do it then if it's such bad business?
[quote=alanl said]
It is stupid Council Officials who cannot see they are costing the Tax payers money by their stupid buying polices.
To be fair that example was your company ripping off the council.
To be fair that example was your company ripping off the council.
Indeed.
Not at all - a company has an obligation to it's staff and shareholders to stay afloat.
Running a non-viable job jeopardises that.
As has been stated, stupid policy left everyone worse off.
As has been stated, stupid policy left everyone worse off.
Except the company has the choice to either accept the contract and fulfil it in good faith, or to not bother if the margins aren't good enough.
Running a non-viable job jeopardises that.
They aren't obliged to take on contracts then dishonestly inflate costs to get more profits. I run a business and would be embarrassed to do something like that. If the company is charging properly for labour costs why does it need to make a profit on materials too?
Seems to be a lot of people moaning about public sector contracts but still taking them on - why is that then?
Sounds like the school was asking for it, with that short skirt and all
Profit maximisation may well be the popular evil to rally around but it is also the mechanism that drives effeciency
It only drives financial efficiency. If that means cuts to personnel or services to make profits, so be it.
(hence why the NHS is so ineffecient, though I'm not saying it should neccessarily any other way.)
Its one of the most efficient health services on the planet!! This business of claiming the private sector is more efficient is mythical bollox, unless you refer to the point above.
The NHS has always had public/private involvement, it deciding what is a healthy balance between the two, unfortunately with the current health budget not increasing to meet demand and more private sector involvement means there will be less in this diminishing budget to actually do what its supposed to.
But judging by what's being said on here, profit only matters.
So why do it then if it's such bad business?
Turnover and little profit is better than no turnover at all in a bad market (which we've been in since 2008). Look at how many of the global contractors have issued profit warning after profit warning, yet we're still ticking over, keeping afloat and not having to make mass redundancies. One in particular has made several attempts to off load its PPP business because its the only arm of the business that's actually worth anything at the moment.
The lure of guaranteed 25 year income streams gives shareholders a portfolio diversification hardon. No matter how little profit, it can be very hard to dissuade a board from committing significant equity to PPP. It was easier when the secondary market was more buoyant, since contractors could refinance and release that equity to go and do other things, but it's just not so easy right now.
European PPPs used to be relatively* lucrative and secure income for contractors. Now it's just secure. That's fine for us, but the sub contractors who have the choice of doing a major private project or a PPP will generally jump for the private work every time unless they're got additional resource to spare, which they do right now because of the downturn. If/When the regular market picks up, they'll turn their noses up at the market that has in part kept them afloat during difficult times. I'm starting to see it already. Middle East markets and emerging Asian markets are far more financially attractive at the moment.
I know there's a general drive to save NHS from privatisation and to keep profit out of the equation. Good luck building and running your next world leading hospital.
*relative to the risk involved. public sector clients don't like/won't take risks that they are generally best placed to manage. Instead they ask us to price taking that risk. So the cost is higher than it could be, and we make money on it sometimes (unless the risk materialises of course!), but this is solely because we've been required to accept greater risk.
A good example of this is ground conditions. When we're offered a site to build a £500m facility on...if the authority says that ground conditions are our risk then that means we generally need to carry out our own surveys for contamination etc. We've got limited time and resources at this stage, so you do a survey which basically involves drilling random holes all over a site. There is always (sometimes significant) chance you missed underlying contamination. Occasionally you find some too. We've then got to guesstimate how much this risk would cost us if it materialises. It will almost always run into millions on a major scheme. We will NEVER err on the low side for something like this and we will build this into the cost. If the risk does in fact materialise and it costs what we built in for it, we're OK. If the risk doesn't materialise at all, or even to the extent we prepared for, then the Authority has pissed millions up the wall by paying us to manage the risk. The better option would be for it to extensively survey the site, make a value judgement and then hand the land to us while retaining liability for ground condition risk. Some do this and it pays off. Others just can't bear the thought of managing any residual liability and would rather pay through the nose so that they sleep more easily at night.
Sounds like the makings of a costs plus 5% contract that sees the overall price to the nhs rocket in a few years... 🙁
It only drives financial efficiency. If that means cuts to personnel or services to make profits, so be it.
and
IME efficiency here just means pay the workers less than the NHS [ often having taken the same staff]
It can do that in some cases yes. Not all but definitely in some. The ideal (that pure capitalists will usually espouse) is that over zealous cost cutting especially around labour costs, in the long run leads to poor performance which then impacts on service delivery.
That's the 'theory' of the self regulating mechanism and it may well work but the problem is that it takes time and while it's working through the cycle, people lose their jobs and patients suffer. You're also going to see any number of business fail. Again, while failure is part of the self regulating system, it doesn't actually help people in the short term.
Profit is still a strong enabler for effeciency but it's not perfect. So the best model, in my view, is one where you have free markets but you also have strong regulatory oversight.
It's the oversight part we've always been bad at implementing, as witnessed in 2008 with the financial system, the rail network before that, the energy sector etc.
If you want an interesting view of free market economics balanced by effective regulation and oversight, have a look at George Soros's book 'Open Society; Reforming Global Capitalism' and 'The Crisis of Global Capitalism: Open Society Endangered'. Both are excellent.
alanl said »
It is stupid Council Officials who cannot see they are costing the Tax payers money by their stupid buying polices.
To be fair that example was your company ripping off the council.
Not at all, we are open about what we charge, and tell them exactly what we/they are getting, and the choice for them if they choose.
We tell them they can have X for £120+£30, or Y for £450+4%, it really makes no difference to us. The Council cannot get, or choose not to get, the items at the price we do.
We actually make less money by supplying an item that costs 3 x more, the council spend more, the only people making on it are the Manufacturers and Wholesalers.
Note, this is for extras on the Contract. The Contracts are always tight anyway, but do allow for a little bit of leeway in costs, however, getting extras out of them is alwys difficult - we make a mistake, we pay, they make a mistake, they seem to think it is our fault for not noticing.
We are not ripping anyone off at all, we would rather sell them X at £150, but their policy does not allow a reasonable profit margin, it is a Council-Wide policy, so if the item did fail within the warranty period, we will be losing money on it if we accept a fee of 4% on £120.
If we charged £150, it just about covers our costs.
Common sense does not come into Council Policies with this Council, so they are charged whatever is necessary for us to cover our costs, within their rules - we would rather have a fair price for items we supply, but they have their own rules which are totally inflexible, and if one was of a criminal bent, easily bypassed by false accounting - which we dont do.
The biggest problem with this is that the vast majority of the private contract in the NHS are held by GPs as there is no such thing as an NHS GP. They are all private sector. Given the power of the BMA then there is no chance that GPs will work on 5% margin.
there is no such thing as an NHS GP.
Well that's wrong for a start.
[i]A good example of this is ground conditions. When we're offered a site to build a £500m facility on...if the authority says that ground conditions are our risk then that means we generally need to carry out our own surveys for contamination etc. We've got limited time and resources at this stage, so you do a survey which basically involves drilling random holes all over a site. There is always (sometimes significant) chance you missed underlying contamination. Occasionally you find some too. We've then got to guesstimate how much this risk would cost us if it materialises. It will almost always run into millions on a major scheme. We will NEVER err on the low side for something like this and we will build this into the cost. If the risk does in fact materialise and it costs what we built in for it, we're OK. If the risk doesn't materialise at all, or even to the extent we prepared for, then the Authority has pissed millions up the wall by paying us to manage the risk. The better option would be for it to extensively survey the site, make a value judgement and then hand the land to us while retaining liability for ground condition risk. Some do this and it pays off. Others just can't bear the thought of managing any residual liability and would rather pay through the nose so that they sleep more easily at night. [/i]
Goes back to what I said earlier - they (most Politicians and the Public Sector) really don't understand been in business. For them, if it all goes t*ts up, worse case is they get demoted.
We tell them they can have X for £120+£30, or Y for £450+4%, it really makes no difference to us. The Council cannot get, or choose not to get, the items at the price we do.
We actually make less money by supplying an item that costs 3 x more, the council spend more, the only people making on it are the Manufacturers and Wholesalers.
School refurb. Contract signed at a fixed price. Extras would be negotiated labour cost, and parts at 'cost plus 4%'.
Of course, we didnt go out and buy the cheapest item to keep costs down.i.e. an over door fan heater was required.
We charge these out at £150 typically, they cost us £120ish.
But 4% of £120 isnt worth our time, so we ordered a well known brand at £450ish.
The Council paid £468, we made £18 to supply it.
So if we'd supplly our usual Model, the Council would be £300 better off, and we'd have made £30 on it rather than the £18 we got.
It is stupid Council Officials who cannot see they are costing the Tax payers money by their stupid buying polices.
There is considerable difference between your initial explanation of what happened and the subsequent explanation of the same situation.
Whose fault it was depends entirely on which one of your accounts is the truth
and then you said this
we would rather sell them X at £150, but their policy does not allow a reasonable profit margin
Why did the company take the contract?
Why do you think this is the councils fault?
TBh i have no idea what actually happened as your accounts are contradictory at best.