The value of the Strategic Plan

As part of the Cost Effectiveness study that Geoff and I are doing, we need to break down the cost of running the hospital to an operation by operation level. This hasn’t been done before in published literature to the degree that we would like to do it and I believe it’s because most surgeons aren’t married to management consultants. However, we are here to break new ground.

When I try to explain to most people here what we are trying to achieve a glazed expression comes over their eyes and they start to tell me all the difficult calculations that have to be made, if they even know where to begin. I’m not fazed from a theoretical standpoint – I’ve worked out the cost of production of plastic sheet in North America to enough detail to prove to the owner of the business that he was undercharging on some product lines. I am confident I can tackle a hospital.

What I haven’t been confident about is getting the information needed to do it. Hence I am writing about this element rather late in our trip. I know from home that most organisations aren’t entirely keen on having outsiders go through their books and here, where both me personally and my career are unknown, I expected it to be even more tricky.

So I played the long game and waited until we had the Acting Medical Superintendent on board and then explained to him the numbers that I would need. At his request I made a document explaining all of these and he signed it and sent me to the chap in accounts.

First it went to the Acting Accountant who seemed eager and told me he could do all the numbers in two weeks. Personally, I thought it would take a month to fill in what I’d asked for but I’m a sucker for enthusiasm. After 6 weeks I still had nothing and he’d lost the form. No problem, I put a soft copy on his desktop – you can’t lose that…

Then the Accountant came back. He wanted to see my request so I was positioned on a chair outside his office (but not in view of the door) whilst his Deputy took in a paper copy. I was there for half an hour. I was not surprised and nor (because I’ve been here long enough) was I bored, annoyed by the waste of my time or anything else. I occupied myself watching people coming to pay bills or pick up their pay. Partly my relaxed approach is because I’ve been here a long time but partly it was because I knew what the problem was…

The problem was that the 10 page document that I had written was a wish list. At home over 75% of Financial Directors or CFOs would have looked at it and sucked their teeth. Not because the information didn’t exist, per se, but because I wanted it cut a particular way – and normally that’s not how the business is separated, most commonly for legacy reasons. In this instance I wanted costs allocated by department down to Repair and Maintenance. I was pretty sure they wouldn’t have it! But it’s always better to ask.

Presently, I was called in to the office and the difficulty of my document was explained to me. After a few moments the Accountant asked me my background and, finding that I was both an Engineer and worked for an Accountancy firm, promptly relaxed and advised his Deputy that they could speak freely. I took this to mean that they could speak in Accounting jargon and assume that I was keeping up ;)

A compromise was reached swiftly. There was just one problem. Salaries. The Medical Superintendent told me these would be a problem because most staff are paid directly by the Government and not the hospital, so he believed their salaries would be unknown [We need them anyway because we have to do the total cost]. This was not the problem – there is a large yellow book with all the salaries in sat in Accounts. The problem was that they didn’t know how many staff of each grade were in each department… So I set off to find that out for them.

This was a little before Christmas and we have hit the dreaded Year End so progress has been slightly hampered. In the interim, I have been asking the Project Manager to work out how much it would cost to build the hospital again from scratch. He mentioned that it would help if we had the Strategic Plan.

There is a Strategic Plan?? This is gold dust to me. On every project the acquisition of the Strategic Plan is the key first step. It will solve all problems – everything will become clear, there will be no confusion. In reality it’s often a bit of a let down but, you know, hope springs eternal and all that.

The second it’s on my USB stick I feel invincible. It’s 102 pages long I discover, surely it contains everything I could possibly need and more?! I begin to read, OK, so it’s not quite what I was expecting but there are some snippets in here. Anyway, not to worry, the numbers in the back will explain everything, I just need to get a quick idea of the big changes and then open my Excel.

Copy pasting tables sat in the sunshine is not a chore – my colleagues should work outside more in summer, honest. I have data from 2009-2011. I have data from 2013-2015 and I have data for the current year, 2012. This is perfect. I am sorted.

Except that they don’t match. The same sinking feeling I get at home happens. Someone has changed the descriptions of some of the lines. All of a sudden £40k has disappeared from one place and cropped up in another, but I can’t see why. There are bizarre trends that I’m not sure about – is it real or did something else change? Drugs funding is split out in some places but not in others, my attempts to pro rata it don’t seem to make much sense. Capital projects includes RMI, RMI includes new equipment purchase, somewhere there’s a massive double count on new items.

Perhaps the Strategic Plan isn’t going to be the Holy Grail this time either. Maybe it never is. I’ve decided to wait for the Accountant – it might be taking a while but at least he’s telling me that the problem is he didn’t believe his first set of numbers! And at home, that’s almost invariably a good sign (in the end).