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With the release of the latest analysis from the King’s Fund (here), heightened attention is being paid to NHS performance. It may only be a coincidence that an election is looming in which the NHS may be an election puppet. The King’s Fund report includes in the title that it an assessment of the NHS under the coalition government. While to some extent this is true, the NHS performance is not really about the actions of the government, but how policy direction is implemented by NHS providers and the system for commissioning care and the role of Monitor. Gosh, so many moving parts. By the way, I have no real criticism of the methodology used in the report; it is always about what conclusions we draw that matters.

The Report takes performance since 2010 for a baseline. Any numerate person knows that choosing your starting point is important in supporting conclusions about performance. We have had a recent report on blood transfusion in the NHS in the 1970s and 1980s, which had folks then known how poorly the NHS performed would likely have led to mass emigration; at that time, many of the people now in advisory or senior roles were learning their jobs and establishing their preferences and politicians were unable to imagine alternatives.

All governments of any political persuasion have acted to protect the NHS from direct litigation; the effect of this is to indemnify managerial inaction and poor treatment of patients. For example, in the early 1990s it became known that the deaths from hospital acquired infections exceeded road traffic accidents. This produced better infection control methods but didn’t improve patient safety. Had the NHS providers been subject then to pretty standard accreditation methods used in Australia, Canada and the US, it would have likely shuttered half of the NHS hospitals as dangerous to the public.

So, one conclusion might be that the NHS isn’t doing that poorly when put against its historical legacy of significant underperformance, and inefficiencies. Despite the domestic mythology that the NHS is/was the envy of the world, it is/was the universality of it that folks admired, not its waiting lists and high clinical death rates. During the debates on the implementation of what is known loosely as Obamacare, referring to the NHS or the UK health system was avoided as a political red flag; the country that was viewed favourably was the Netherlands.

The Report usefully looks at resources available. What needs to be appreciated in understanding resource use, is whether the resources are where they need to be. NHS hospitals are monopoly suppliers of specialists, labs and imaging services and a lot of services that are run from hospitals really don’t even need to be there (think ophthalmology, diabetic care, much physiotherapy); NHS hospitals reluctantly give up clinical control of patients receiving homecare and so on.

GPs and their patients must be fitted into the hospital’s service capacity in order to receive much care. Anyone who has had to wait for a scan will wonder why. As resource utilisation dictates whether outcomes are achieved and directly impact quality of care, the bottlenecks created by monopolistic practices in the NHS will only lead to greater risk of declining performance. People who hit the 4 hour A&E target who need some imaging, will of necessity get admitted, otherwise they are on the out-patient list (which can extend into months). All this is avoidable.

So not having the right resources available at the right time isn’t a crisis of funding, it is a crisis of management and system design.

The proof is always in the pudding. The Macmillan folks released a report on cancer survival (here), with their conclusion that cancer survival in the UK is stuck in the 1990s. Despite years of extra money, what is going wrong? A paper in the International Journal of Cancer (Moller H, et al Breast cancer survival in England, Norway and Sweden: a population-based comparison, 127, 2630–2638 (2010)) concluded:

“[if cancer patients in England are presenting at more advanced stages of cancer], then the main public health implication is that any strategy for improvement should include as a primary focus symptom awareness among middle-aged and older women and their primary care professionals, with an aim to facilitate early diagnosis and treatment.”

The implication for the NHS and belatedly recognised by NHS England, is that poor cancer outcomes come from the inability of patients to access oncologists directly in a timely manner. This arises from the hospital’s monopoly control of specialists and the inability of oncologists to establish direct access to full-service oncology services for patients when compared to access in the countries highlighted in the Macmillan report. The same can be said of many other clinical areas which hospitals monopolise. The disruptive forces at work in other sectors of our society are muted when it comes to healthcare — in part because politicians fear the failure of publicly funded institutions.

One can only be optimistic that new types of provider (such as the Vanguard sites) and other organisational redesign of clinical workflow will be successful and that the current problems are not a collective, unconscious, conspiracy of inaction within the NHS to shift responsibility onto politicians rather than taking direction action themselves.

The policy space for the NHS under the coalition government has removed considerable barriers to innovation, which should point to underperformance as a matter of design, not money.

NHS England and other English health organisations have produced a five year ‘forward view’ [here]. The refreshingly short and precise document establishes a new approach to the

English: British National Insurance stamp.

“Skin in the Game” British National Insurance stamp. (Photo credit: Wikipedia)

English health service, something political reform has failed to achieve since perhaps the beginning in 1948, namely the realisation that top-down reform really doesn’t work. This is a bit surprising given how oftenNHS folk have travelled, particularly to the US, and other places, where the notion of a top-down approach is anathema. All these visits, reports and breathless commentary on lessons learned has really, it now seems, to have been for nought.

We also now have some explanation why the attempts to adapt lessons and approaches from other countries has failed — the heavy overarching deadweight of central control has stifled innovation. Given the additional volumes of studies of the NHS, think tank policy papers, round-table discussions and consultation, researchers, in the UK at least, seem to have been trapped within their own paradigm and failed to see the internal fault lines that pointed to this blind-spot.

Anyway, that said, we now see that Simon Stevens, head of NHS England, has not wasted his time in the US, as not only does the report quote Lincoln’s Gettysburg Address, but tacitly acknowledges that the US (and other countries, but not in the UK) favour decentralised experimentalisation with payer and service delivery flexibility.

Lawton Burns in his important book on healthcare innovation [The Business of Healthcare Innovation, 2005, @Amazon] notes that one reason the US dominates the health technology innovation space is precisely because of the flexibility to experiment, try new things in healthcare service development.

This report, together with the other surprising ‘discovery’ that the funding of healthcare and social care are also part of the problem, after decades of dysfunction, shows that there is now a window within which major changes can be achieved to remove perverse policy incentives, drop barriers to change and get rid of the zombie administriative rules that kill off good ideas.

So where might this all go? Yes there are some very good examples already in place and one hopes more to come. But putting the cat amongst the pigeons may have other rather interesting consequences.

If we see increased power shifting to cities, will we see Swedish-style county-council run healthcare? Such an approach has the merits of democratic accountability, and challengingly, puts funding options within local taxation strategies. Given years ago I advocated with the other big city in the UK a local-council run NHS which caused no end of criticism, I would be surprised if this doesn’t come back on the agenda.

The rising priority of prevention also highlights one weakness of the NHS.  Dating back to 1819, employers had legal duties imposed on them for the health and safety of their workers, a responsibility which the creation of the NHS in effect removed at least in respect of health.  The report notes that employers pay National Insurance as though that were sufficient motivation. What the report fails to add is that NI employer contributions are not experience-rated in terms of the health of the workers themselves. The NHS has flirted with workplace healthcare in the past, but the concept of “primary care in the workplace” has failed. Stevens will know (and others should) how many countries separate workplace health from general health. Some places call it “workers compensation” and it involves risk-based employer premiums, adjusted for actual workplace health, injuries and accidents. Countries with such systems include the USA, Canada, Australia, Japan, and others.  What taxation does is risk-pool, but that means it is hard to link individual behaviour to risk.

American Accountable Care Organisations and other similar approaches in other countries of long-standing, only work when organisations are free to associate in ways that make financial and healthcare sense. US ACOs are forming partly in response to the financial signals in healthcare legislation there, but these signals, coupled with systems of rigourous inspection (and a failure regime), focuses minds. Vertical or horizontal integration in the NHS is needed, and would serve to remove at a stroke the barriers that bedevil patients. I’ve seen how building primary care onto the ‘front’ of the hospital enabled speedy patient access to specialists (they simply came down from the wards) and avoided inappropriate admissions. Buying a nursing home added a step-down into the coummenity releasing pressure on in-patient beds. GP integration toward secondary care pulls diagnostic imaging and laboratory technologies toward the patient, and removes hospital monopoly control of what is the major cause of delayed diagnosis.

But, the end result is in the UK, consumers, patients, employers, have no real skin in the game, which in these days of behavioural economics means that it is additionally challenging in the NHS to activate the essential incentives to align patients around their care, or employers around healthy workplaces other than through moral suasion.

We may need to revisit how to use the NI contributions as co-payments to create the necessary financial incentives that serve to quantify risk to both patients and employers.

Of course, one should be grateful for small miracles, which is why this report is welcomed.

P.S. I suspect this can be done without new money.

 

 

 

 

It is no doubt reassuring for many in the English NHS that Simon Stevens, the new CEO of NHS England, comes with new ideas — they don’t have to think so hard. I guess people have forgotten their criticisms when he left the UK to work for a commercial provider: UnitedHealth, in the US.

 

ngc7380, the Wizard nebula

Do we need new ideas from Outer Space? [ngc7380, the Wizard nebula (Photo credit: write_adam)]

 

What apparently has happened while he was in this rather different environment is that he has returned to the UK with a box load of fresh thinking.

 

However, he must be wondering why all those people concerned with improving healthcare services had not thought of them already. Why he has to do this is really worrisome as it is just further evidence that the NHS is a permission-seeking culture that takes ages to innovate even the most mundane improvements. I have no difficulty with what Stevens is saying, and I hope he legitimates even more radical initiatives, if all it takes is for him, like in Star Trek, to wave his arms and say “engage!” for people to get on the with jobs we all thought they went to work everyday to do!

 

We’ll hear a lot about the small hospitals idea now that it has been reignited as a ‘big idea’ (little idea?). People will now say that it is a good idea, timely, insightful. Or as one person on the news said today, that this is recalibrating what the NHS does. Hmmmm. Methinks the lack of insight into the problems that Stevens highlights with his comments is not reveletory, but just more evidence that the NHS eats its young. Perhaps we should listen less to the economists who are trying justify expenditure models in the Department of Health, and more to people with imaginative ideas to improve healthcare with the money they already have.

 

What Stevens seems to have learned from his time outside the UK and in the US (and I expect he’ll pepper his comments with examples from other countries, but the US is the innovation engine of note) is the need for healthcare providers and payers to be able to use their respective roles to improve care. So-called Obamacare mandates payer-side reform with a pluralistic perspective yet the English NHS has limited payer-side instruments to really drive reforms (despite CCGs). The ability to repurpose money is really important.  Providers for their part are struggling with health reform in the US but it is driving innovation. What is stopping NHS Foundation Trusts??

 

Some examples from the US:

 

1. Virginia Mason Medical Center worked with Intel to develop a totally new approach to organising care with a focus on creating “the perfect patient experience”. The underlying logic builds on Toyota’s Production System and was used to rethink clincial work and patient care processes. (see Kenney’s Transforming Health Care, CRC Press. Forward by Don Berwick by the way.)

 

2. The Mayo clinic has been working on the focused factory/solution factory model to rethink the alignment of patient case complexity and clinical organisation. Given work I’d been involved in the late 1990s was the first structured patient segmentation model ever used in the UK, moving toward a segmentation model is hardly rocket science anymore. (check out the May 2014 issue of Health Affairs, article on cardiovascular surgery by David Cook and colleagues at Mayo).

 

3. Michael Porter, of Harvard competitive strategy fame, is applying his considerable analytical models to healthcare. He wrote a great book, Redefining Healthcare, about the US, and did a powerful critique using similar models on the German healthcare system. I just wonder why he hasn’t done the UK….

 

4. Patient activation is on the agenda in the UK, following a recent paper from the King’s Fund. But why did it take a decade for them to discover something that is old-hat as an operational strategy to patient adherence. The problem in the NHS is that there is insufficient priority to spending money to anticipate care needs. I had a project to assess a project on how weather impacts acute exacerbations of COPD; all it took was a telephone call to tell people with COPD risk to stay home on days when the weather was for them risky. This sort of good thinking wasn’t continued, despite evidence that it worked. Oh well.

 

5. Berwick’s work, first published in Health Affairs, on the “Triple Aim”, is coming up to 8 years old, and it seems Wales and Scotland are using it, and Darzi and colleagues did write about it in a recent issue of Health Affairs, but it wasn’t published in the UK (perhaps the UK is poorly served by academic researchers or are publishing in obscure journals with paywalls to ensure dissemination is limited to subscribers). Triple Aim is a powerful analytical model to probe wasteful, dangerous and unsatisfactory care. I’ve been using the Triple Aim in my own work constructing decision architectures of patient treatment pathways, but the ability to convert the results of the analysis into action remains the sticking point. Payers haven’t been commissioning the work, and they are really the problem owners as much providers.

 

6. The Evercare programme, which Steven’s ex-employer runs, has been around in the US for over 30 years and involves, in part, specialists visiting at risk people at home and works well. The NHS tried to translate it to UK practice, but the key benefit, of home-visiting specialists, was implemented. The results was sub-optimal and probably a complete waste of time and money. Gravelle and colleagues produced an evalution in 2007, published in the BMJ.

 

Don’t misunderstand, many people working in the NHS want to make things better. The problem I have is why good ideas need to be permitted. I guess it is all about the politics of healthcare, but I thought the new model NHS was supposed to bury the supertanker logic and create bureaucratic distance to allow that.

The NHS solution to challenges is to bureaucratise them (create entities and bodies with mandates) and issue guidance, which perpetuates the permission-seeking culture.

 

Having experienced healthcare in other parts of Europe, there are many important alternative approaches which do not require new bureaucratic organisations. A looser more flexible approach to pursuing innovation may be the trick. Oh sorry, the NHS tried that with the Innovation Institute for something or other full of people running around the country with powerpoint presentations.

Just think of Sweden — healthcare run by the local council, and with co-payments!

Group Shot

So we all agree? (Photo credit: Jayel Aheram)

“Linda Sanders, director of social care at Hillingdon, accepted that Steven and his father had been let down by collective errors of judgment.” [from the UK Telegraph]

There is a court in the UK that belies belief that such an authoritarian and secretive judicial entity could exist in a democracy. Away from public scrutiny, legal injustices occur in the name of protecting the interests of vulnerable people. Maybe.

But what this particular case indicates, and the quote is not the whole story, is that vulnerable people can be held essentially captive (the court ruled that his human rights had been violated and he had been ‘unlawfully detained’). It is further evidence that vulnerability and disability lead to a net diminution of an individual’s rights. I worked on the legal rights of disabled people at the beginning of my career, cataloguing one of the first directories of how officialdom removes rights from individuals through a systematic and bureaucratic process, sanctioned by law, and in this case enforced by all the power of the state.

What is worrying is the director’s comment that it was ‘collective errors of judgment’.  This is grovelling code for ‘group think‘.

Group Think is a deadly force that infects organisations, and allows bad things to happen because people fail to challenge injustices, go along with the crowd, or ignore their ethical and moral compass.

Collective errors of judgment are not accidents of nature either. They arise from systemic elements in organisational design and structure, reinforced by leaders that see dissent as evidence that someone is not a team-player, where deep ethical issues are viewed as interesting but not relevant to the task at hand. It emerges when no-one looks at a situation as a whole, and asks what is going on here, and why. The old adage, would you like to see your decisions on the front page of the newspaper, on Facebook or Twitter, apply.

It is hard not to blame the culture and management of social care organisations, as this is not the first case where there is evidence of systemic failure. It revolves around how organisations form opinions about the care needs of individuals, how individuals (not collectives) arrive at those decisions and in what way, how they discourage alternative perspectives, and fail to change their views when confronted with new evidence, evidence to the contrary, or as in this case, a clear challenge to their authority. A patronising organisational response no doubt prevailed.

Group think also infects decision-making in any organisation where actions are based on an hypothesis about what needs to be done, and from which various actions flow. Getting that initial starting point wrong, means actions flowing from it are wrong. This is not a collective error of judgment, it is evidence of deep failure of decision-making processes. Other social organisations work in this way.

The way forward includes directors of social work not blaming some vague collective, but examining how decisions are made, how challenges to decisions are received and their attitude to dissent. A clue is here: an organisations that describes itself as a ‘family’ is likely authoritarian. Family language means dissent is suppressed within an organisational type that is either matriarchal or patriarchal in form.  And you know what it means to disagree with your parents.

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Urinal

Industry accountability for public contracts. (Photo credit: Ron Knox 2001)

I was watching the Public Accounts Committee on 23 May 2011 take evidence from IT suppliers and NHS executives on the NHS IT contracts. This monstrous contract was doomed from the start, yet few seemed to be in a position of influence to alter the ‘group think’ that prevailed in government. Civil servants and ministers seemed to breath each other’s air as they pursued this pig in a poke. Worringly, the PAC exchanges shed a bit of light but more revealing was the lack of common language amongst those concerned. Frequently, answers were not relevant to the question, used jargon or introduced further obfuscation.

In the end, whether supplier or NHS exec, the PAC was faced with a sea of denial, avoidance, or sheer hubris. I say hubris as NHS executives in particular were at pains to avoid rocking their own boat by being completely candid about things, preferring warm phrases that all was well, despite the CEO of the NHS being unable to answer many questions clearly, and seemed painfully ill-informed of his brief.

Evidence of obfuscation abounded as the MPs had to ask suppliers many times to answer with yes/no to what were straightforward questions. I was impressed with the efforts of some MPs (Bacon in particular) to get clear answers to important questions.  As a rule, complex answers betray a lack of understanding of the underlying logic — there are simple answers to these questions, not ‘it depends’ or ‘you’re comparing apples and oranges, pears’; indeed, at one point, the sessions seemed more about the comparative merits of different fruits than IT procurement. As well, the lack of clarity of underlying logic also evidences people were unable to agree on what the core problems were.  Now, granted for some this is likely to be a complex problem (in the technical sense of the word, a wicked problem), but I doubt that — the NHS’s needs and responsibilities are complex, but an electronic health record is a thing, with a defined functionality.

I remember sitting in a room just as this NHS IT for heatlhwas being firmed up (2002), and hearing the Director (Granger) at the time speak glowingly of the benefits. Upon hearing this, others in the international teleconference asked, “surely you’re not serious about doing this”, to be told, “absolutely”. As is said, act in haste, repent at leisure.

An important question was, knowing what we know today, was the original decision to proceed with this central and top-down approach sensible? The answers were evasive and broadly technically wrong. In 2002, it was perfectly possible to develop distributed systems, with broadly distributed functionality using various systems integration options to enable diverse technical architectures to co-exist to deliver uniform service. No one wanted to think that way for a couple of reasons. The first is ego: grand plans appeal to people’s ego needs, to be in charge of something big. The Director at the time exhibited serious Machiavellian behaviours, and failed miserably to engage users.  The second is conceptual: at the time, Department of Health and NHS executives were still thinking the NHS was a single lumpen thing that needed single solutions to its complex problems. In the early 2000s and late 1990s, that the NHS should be seen as a complex adaptive system was understood, but not acknowledged as it flew in the face of prevailing ideology about central control, driven by the mistaken (technical) belief that a distributed system, while diverse and pluralistic, would be unable to deliver a common standard of performance.

In the end, you end up with a system that is rigid, technically obsolete as soon as it starts operating and because it fails to evolve with changing clinical needs, which will change as clinicians become familiar with the technology and comfortable with its use, and start to specify more sophisticated applications. That some PAC evidence said that clinician need had evolved is nonsense — we know then that these were the core needs. Anyway, we’re moving on to smartphone apps, and there is little evidence that the system can accommodate the wireless world of healthcare. The best selling clinical app is ePocrates, for drug information. How many clinicians have that app? How many clinicians are using smartphones? Distributed and simple systems can deliver often quite complex solutions; for instance, the Danish electronic prescribing system was built on simple secure emails.

The approach that was ignored at the time was this:

  1. specify common standards of interconnectivity and functionality, that is results;
  2. allow providers to use whatever system they wished as long as it met these requirements;
  3. allow the system to evolve over time as needs become better understood;
  4. start with the patients who are heavy users (high risk/high utilisation) and roll out from there.

That’s it.

Where the English NHS and Department also lost the plot was failing to exploit the NHS IT project to drive innovation into the IT sector to encourage the formation of a potentially world-class health IT industry in the UK. Is it any coincidence that the main solutions are from outside the UK and the critical supplier expertise betrayed North American origins?

This is a real shame, as once again the Department has shown antipathy toward enabling a commercially successful and innovative health supplier industry, in favour of mean-spirited control. This was perhaps the greatest missed opportunity, as instead, the Department came up with false logic of needing suppliers of scale (who are now quasi-monopolists).  Indeed, one member of the PAC did question whether CSC’s corporate logic was to make itself a monopoly supplier to the NHS.

The tragedy, too, is that virtually all the functionality that the NHS needs can be downloaded for free in the form of open source software.

Finally, the best thing the NHS and the Department could do is make sure all that intellectual property that has accumulated is given away, to try again to jump-start a health IT industry. If there is a value-for-money lesson the PAC could draw it is to determine whether there is sufficient residual value in the NHS IT procurement to be translated into investment in the economy, to build new suppliers to the NHS and perhaps the world. An opportunity awaits.

UPDATE

I thought I’d add reference to this diagram on distributed clinical systems. The copyright dates from 2002, a time when the PAC was told such capability didn’t exist. The diagram is taken from the OpenEHR website, which adds “Much of the current openEHR thinking on distributed computing environments in health is based on the excellent previous works of the (then) OMG Corbamed taskforce, and the Distributed Healthcare Environment (DHE) work done in Europe in EU-funded projects such as RICHE and EDITH, and the HANSA and PICNIC implementation projects.”  In those days, the UK’s NHS was still charting a proprietary, and non-standard, approach to EHRs and clinical systems; an example of one failed programme is the ‘common basic specification’ — there is an interesting commentary here on some reasons why it failed.

 

Diagram of a distributed clinical system, ca 2002

 

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300 The Movie

Health Politics (Photo credit: Quang Minh (YILKA))

The NHS Confederation wants it all to stop, according to journalist reporting in the press (for example, here).

Over the years, there has always been this fear of the words NHS and political football being in the same sentence. Perhaps the better approach for both the government and the NHS would be for the NHS to more explicitly engage in the political debate.

Mike Farrar, the new head of the NHS Confederation (which seems to have its own problems), says that the system is a democracy. Yes, but what does that mean? It should mean empowered to participate in the machinery of democracy and political debate, and not just take orders.

By explictly engaging in the political debate, NHS actors would widen the marketplace in ideas that the political space needs to chart the future direction for the NHS. This would create greater political space between the NHS (whatever that actually means these days), the civil servants in the Department of Health, and the political machinery of government. At least at a public level, NHS actors have avoided the political dimension, thinking it a better strategy not to become ensnared in the politics. But of course, their political debates are more likely to be argued through responses to government consultation documents, presentations to the Health Commmittee, exchanges at professional conferences (but this is frequently a one-way dialogue), and closed door meetings. They are all generally well-behaved, articulate and ineffective, but importantly not engaging citizen preferences.

This stance may be past it usefulness, especially if the providers of care are supposed to really engage with their local communities.

The purchasing side of the equation is equally fraught with avoidance of too much public engagement and as a consequence, purchasers (I do like that word), seem destined for provider capture, and the protection of legacy provision (mainly to avoid any hint of private sector participation). Hardly a reform agenda. The new Agences Regionales de Sante in France may actually show how this should be done, but again that is another story. Major reform is not just a UK thing.

Providers have weak public affairs capabilities, little political nous, and less ability to galvanise public understanding of the options facing providers. They, too, may be subject to capture by their own professional staff, so disruptive changes are avoided to keep the peace.  Foundation Trusts may not exercise their autonomy well, perhaps discomfited with the notion of too much autonomy generating an unfavourable press.

Anyway, one benefit of greater engagement in the political arena would be to shift the logic internally from the NHS being a policy-taker, waiting for the politicians to decide what to do, to becoming a more active participant in the marketplace of ideas for the healthcare, in effect a policy-giver. As such, the NHS, taken together, has virtually no political capacity, no capacity to develop structural options, no formal relationship with the public to seek their views on this or that.

All this has been handled by the Department of Health which sets the tone for the political debate and defines what is and isn’t in the frame from a reform perspective. This serves the Department just fine, as it furthers the role of the Department of Health as being responsible for the publicly funded health system, which is not a bad thing given how much public money it consumes. But it also means that the Department is the only one framing the political debate, and that is not particularly good for democracy. And not all political positions need to be played out in the Commons, but can be debated vigourously in the real world as NHS organisations drive forward changes. Keeping NHS organisations on a short lead only means more work for the Department of Health, but less value being derived from all the people running hospitals and clinics.  It is time to replace notions of the NHS as a single ‘thing’, like supertanker which takes forever to change, with the concept of a school of fish, which can change direction really easily and quickly.  See my blog post on distributed systems in health care here.

But arguments are what they get because the object of their affections has weak autonomous and collective decision-making structures, and a cognitive capacity to engage in the arena of ideas except through special interest groups such as the health professions or Royal Colleges, or the Confed. These do not represent the interests of the provider side of the NHS, but only their interpretation of these interests through their own lens on the NHS.

The Confed is not sufficiently robust to act in a political capacity in this arena despite publishing various position papers and having a lobby office in Brussels (funded I believe in part by the soon to depart Strategic Health Authorities), and attracting high-profile people, all of which are worthy.  But the Confed is shot through with conflict of interest problems and may not be certain what its role is — time will tell.

Mr Farrar speaks in this article of a ‘public interest test’, for example. Well, the challenge for NHS structures is simply to introduce it as a matter of managerial autonomy and good practice. If it is such a good idea, why wait for the government to make up its mind. With all the smart people supposedly thinking grand thoughts about the future of the NHS, would it be too much to expect someone to be courageous enough simply to get on with putting these ideas into practice, to test them out.

It would also nicely balance the political realm, as the NHS actors would be demonstrating their ability to get on their job of managing the healthcare system with innovative approaches, without legislative intervention.

The problem as always is courage.

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Sumerian contract: selling of a field and a ho...

A Department of Health contract with a private provider of healthcare

The Bureau for Investigative Journalism reports that £500 million was spent on private health clinics in the NHS that in their view represents poor value for money. No doubt commentators will point to the private aspects of these contracts as evidence that they failed. A few comments on their Report:

  1. The contracts were pre-paid block contracts, and in most cases the complement of procedures paid for were not used. Now whose fault is that? In the same way as hospitals do not go around soliciting business from GPs, these clinics need referrals. The question in my mind is was there so much capacity that the pre-paid procedures weren’t needed? How many patients did not get treated because of a failure to use these contracts? Of course the same thing can happen in the NHS, just people don’t see it as quite the same waste of money as when private contractors are involved. But they are the same.
  2. That the Department of Health is buying them back is the Department’s problem, which the taxpayer has to deal with. I’m not sure what the point of buying them is, especially since they will close and their treatment capacity lost to the doctors. Is there that much excess capacity in the NHS that they can take out that much capacity? The Report doesn’t clarify what is actually going to happen next. I don’t disagree with them about this being a poor use of money, but the decision to remove these facilities from available capacity is a bad decision, regardless of who runs them. The firms running them have excellent clinical performance track records in the main.
  3. The original contracts were commercially naive. But the UK’s NHS has a very poor track record with commercial suppliers, and so to get anyone interested at a time when there were serious shortages of capacity (and still are of course), they had to underwrite some of the risk. Of course, what might be thought of NHS facilities such as Foundation Trusts are increasingly not publicly owned as such but owned by the organisations that run them, and there are similar contracts with them. (GP premises are also private) Keep in mind, too, that pre-paid block contracts are an acknowledged (but poor) way for buying hospital services, so NHS facilities have also benefited from this — but just to be clear, many NHS facilities over-provide on these contracts, run out of money, usually 9 months into the contracts, then have to pull back in the last quarter. With payments based actual activity, you pay for what you buy, which explains in part why NHS facilities are running out of money — they cost more to run than the activity they are providing based on the income they derive from that activity. Nothing to do with being a public or private organisation, but a lot to do with how contracts are structured and of course how the hospital is managed. One hopes that more sophisticated contracting will emerge.
  4. NHS contracts are generally risk-free, that’s why there is the current fuss over competition in the NHS, as it would introduce risk. If risk were introduced, it would naturally level the playing field for private providers. But with risk-free public contracts, all the private providers wanted was the same contract conditions as NHS providers. The sensitivies around this, though, tend to favour a default assumption that the publicly owned, if that is strictly true anymore, institutions are better value-for-money than the private ones, when it comes to clinical activity.

This Report focuses on the expenditure of money without asking the next level of questions which go the heart of how and why money gets wasted in healthcare and why the NHS has so much difficulty with its contracts (let’s not get started on NPfIT).

But the Report is useful by illuminating the financial consequences of poor commercial decisions within the Department and the NHS. I just wonder whether there has been any learning as a result.

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