Management, Mutuality and Risk


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Management, Mutuality and Risk

  1. 1. Management, Mutuality and Risk: Better Ways to Run the National Health Service IoD Research Paper_________________________________________________________________ Geraint Day
  2. 2. This policy paper was written by Geraint Day, Health & Environment PolicyAdviser. It was originally produced by Lucy Chard and was reproduced by LisaTilsed, Policy Unit Manager in 2003.First Published October 2000Reprinted July 2003ISBN 1 901580 47 4Copyright © Institute of Directors 2000.Published by the Institute of Directors116 Pall Mall, London SW1Y 5ED.COPIES AVAILABLE FROM:Book SalesMembership Department116 Pall MallLondonSW1Y 5EDTel: 020 7766 8866Fax: 020 7766 8787Price £5.00
  3. 3. Contents_____________________________________________________________________1 Introduction and summary 51.1 Introduction 51.2 Summary 62 Accountability, governance and management 82.1 Governing principles 82.2 Governance in health 92.3 NHS bodies 102.4 Accountability in the NHS 112.5 Councils of advice? 122.6 A forum for debate? 133 Management and risk 153.1 First do no harm! 153.2 Healthcare and risks 163.3 Healthcare, and health and safety 173.4 Hippocratic or hypocritical? 204 Management and medicine 224.1 Trust in management 224.2 Dichotomies: cutting through extremes of care 23
  4. 4. 4.3 Managing medics 244.4 2001: managing the monolith? 265 Is there no alternative to the NHS way of providing 28 healthcare?5.1 Alternative forms of healthcare provision 285.2 Mutuality and medicine 295.3 Overseas examples of mutual healthcare provision 315.3.1 User-owned health co-operatives 315.3.2 The West: The user experience in the USA 325.3.3 Going East: Japan 335.3.3.1 Consumers and health 335.3.3.2 Agriculture and health 345.3.4 European examples 355.3.5 Elsewhere 355.3.6 Summary of worldwide scene 355.4 Options for the future 365.4.1 Raising support 38Acknowledgements 40Biographical note 40References 41Your comments 45
  5. 5. 1 Introduction and summary1. 1 IntroductionThe National Health Service (NHS of the United Kingdom seems to be in the NHS) NHSnews in a way that it perhaps has not been before. The pioneering service that wasformed in 1948 with the aim of providing comprehensive healthcare free of charge atthe point of delivery may never before have seen so much sustained attention andcriticism as it did in the first half of the year 2000.In its role as a membership body that aims to bring to bear its expertise on majorissues in public life, the Institute of Directors (IoD) had set out some views in aResearch Paper before the more recent close scrutiny by the Prime Minister and the 1Government really got off the ground . A revised version was produced in June 2000(reference 2). Ruth Lea, Head of the Policy Unit at the IoD, set out in the Paper acommitment to a set of health services free at the point of use, but focused on a usenumber of areas where great improvements could and should be made. Theseincluded more funding from private sources a better and more open level of debate sources,about the resources that are allocated to particular types of health services andprogrammes, and ways of making the NHS more manageable by turning it into much manageable,smaller units. It also covered some issues of better patient (consumer) influence overthe NHS. The present Research Paper further examines the next to last of theseissues, together with some matters of governance, and honesty about risk.The Government has launched a national plan (The NHS Plan) for renewal of the The Plan 3NHS . In its Plan it recognised that there is a need for more work with the privatesector to help improve health services. It is also intended to improve the quality ofleadership in the NHS. As the UK’s foremost individual membership organisationwhose aim is to help directors to fulfil their leadership responsibilities in businessesand other important organisations, the IoD has a clear interest in both these areas.One of Ruth Lea’s other suggestions was to change the provision side of the NHSinto self-governing mutuals rather than preserve the current fairly top-down, highly mutuals, 4bureaucratic system .Some of the IoD’s suggestions for the NHS may be subsumed into the followingareas:1. Governance including clinical governance (see chapter 2) and the power of Governance, clinicians (see chapters 3 and 4).2. Alternative models of healthcare provision focusing on mutuality as one option provision, (see chapter 5). 5
  6. 6. 3. Patient participation in the provision and operation of health services (see chapter 2, sections 2.4 and 2.5 and chapter 5, section 5.4.1).The Government’s NHS Plan3 does in fact contain a number of points that arerelevant to all three of the above. Like the IoD, the Government has stated thatmany aspects of the NHS need to be changed. The NHS Plan specifically refers,among other things, to5:A. Lack of incentives to improve performance.B. Over-centralisation.C. Patient disempowerment disempowerment.The IoD’s general concerns 1, 2 and 3 set out above are in fact similar to theGovernment’s broad areas A, B and C.The IoD has also set up a Healthcare Provision Policy Study Group, which began its Groupwork, starting a time-limited series of meetings, in September 2000. IoD members’ views 6were also being solicited to feed into the Study Group’s deliberations .Like the Government, the IoD knows that there is and has been much to be proud ofabout the NHS. Also like the Government, the IoD view is that there should be 7“fundamental and far reaching reforms” to the National Health Service. Theintention is not to be prescriptive. The intention is to make a further contribution tothe debate.1.2 SummaryThis Research Paper examines all of these areas, as follows:• Governance and accountability (chapter 2): Some principles of governance are discussed in section 2.1, with reference to the NHS in section 2.2. Information about some of the many organisations that make up the NHS is presented in section 2.3. Following that there is some discussion about the appointment process to NHS public bodies and the debate about the “democratic deficit” in NHS public bodies (see sections 2.3 to 2.5). One of the particular proposals made in the Government’s NHS Plan (that relating to Patients’ Forums) is examined in section 2.6, and found wanting on corporate Forums governance grounds.• Management – and risk (chapter 3): The NHS needs good management. It needs good management to make intelligent decisions that take account of the vast amount of patient-specific data that are gathered (see section 3.1). Those running health services should also have a much sharper focus on the risks involved. These include risks around the intrinsic uncertainties of many medical interventions where a much higher level of interventions, public debate and honesty is needed (see section 3.2). Risks also include the more mundane matters of health and safety, with which all employers must comply, including the need to safeguard users of the Service. This has not always been given the appropriate priority by NHS bodies (see section 3.3). Other aspects of ensuring patient safety, including validation and appraisal of doctors, are touched on in doctors section 3.4. Good systems are needed but at the same time, public vilification of 6
  7. 7. any particular groups of clinicians must be avoided; those charged with stewardship of the NHS should take much more responsibility for bringing about improvements. This will include NHS boards and management.• Management and medicine (chapter 4): The general absence of coherent management of too many parts of the NHS is commented upon in section 4.1. Some of the severe criticism that has been directed at the quality of NHS management is dealt with in section 4.2. Also, the “corrosive cynicism” experienced by many groups of staff is considered. The difficulties of managing clinicians is covered in section 4.3, along with some of the problems caused by trying to manage an NHS of a million employees amid an ocean of central directives. Section 4.4 comments on the Government’s NHS Plan directives for improving the quality of leadership in the NHS.• Options for ending patient disempowerment and a centrally directed NHS (chapter 5): The NHS Plan too readily dismisses overseas methods of providing health services and of involving the public more directly in decisions about healthcare. The current NHS is not the only viable model of healthcare. We comment on this in section 5.1. Following Ruth Lea’s suggestion for having self-governing mutuals provide health services some services, arguments for exploring this option are presented in section 5.2. Examples of such means of organising and providing health services in other countries are given in section 5.3. These include cases of significant user influence or actual ownership of the bodies providing healthcare; bringing together informed citizens and healthcare patients with health professionals and others to tackle health problems and provide good-quality services. Finally, some initial ideas on how to introduce such models into the UK NHS are explored in section 5.4, including the possibility of piloting such schemes. They could greatly improve both consumer influence and management accountability of organisations providing healthcare.We are not trying to be prescriptive, but do want to make a contribution the much-needed task of mending the “chronic system failures” and radically reforming thedelivery of health services in the United Kingdom, a challenge that has been set by 8the Prime Minister . 7
  8. 8. 2 Accountability, governance and management2.1 Governing principlesThe IoD takes a keen interest in good governance. In its role as a professionalmembership organisation for directors from all sectors of the economy, and theleading body for directors in the United Kingdom, it seeks to promulgate theprinciples of good corporate governance and high standards of business ethics.Those principles are fundamentally the same across all types of organisation – orshould be. Thus alongside commercial public and private limited companies are to befound directors from the state sector, from mutual and community organisations,charities and the panoply of voluntary bodies and “non-governmental organisations”.Corporate governance is also an international issue. The UK Government has signedup to 12 generic principles of corporate governance produced by the Organisation ofEconomic Co-operation and Development, and 15 principles set out by the 9Commonwealth Association of Corporate Governance .Good governance should apply in the National Health Service too. The NHSExecutive (NHSE) has produced governance guidelines for board members in the 10NHS. So has the IoD . “Accountability” could usefully be considered as having twomain aspects. The first relates to the processes of appointment and removal of office-holders; here, board members. The second is about stewardship of the organisation.This encompasses the procedures and actions of the board in its duty of trying toensure the success of the organisation. It would include such matters as what factorsare considered by the board in its oversight of the organisation, how (and which)measures of performance are used, and how reports are made to key interest groups(or stakeholders). In the case of the NHS it would include modes of reporting togovernment and the public, and whether and how their respective views were takeninto account (ranging from legislation to instructions from the NHSE andDepartment of Health (DoH), to public consultation exercises).The IoD has also commented on ways that businesses consult with their key 11stakeholders . Businesses decide how and when to keep in touch with, to consult,their key stakeholders. Businesses would not remain in business if they did not takeaccount of the views of key stakeholders, such as customers. In the case of the NHSthe key stakeholder group is – or should be – the public, the users of the Service.This should not just be a social responsibility and about enhancement of reputation.A focus on patients as users should be the raison d’être of the NHS. Many are nowsaying that it is not. 8
  9. 9. 2.2 Governance in healthNHS health authorities and trusts have to abide by codes of conduct laid down by theGovernment. For example, they must publish certain information in their annualreports, and must hold meetings in public (except for parts which may be confidentialby reason of patient or commercial confidentiality). In common with most parts of thepublic sector, senior people in NHS organisations are subject to public scrutiny – upto and including being put under the spotlight by such influential bodies as theNational Audit Office (NAO) and the House of Commons (by the Health SelectCommittee and ultimately the Public Accounts Committee).Q is for quangoQuangos are organisations whose board members are appointed by the government to performpublic functions.Quangos include several types of publicly funded bodies. According to the House of 12Commons , in the United Kingdom in 1998 there were:304 executive non-departmental public bodies (NDPBs) – such as nationalised industries,public corporations, and the Environment Agency (with 2742 members)563 advisory NDPBs – these include some royal commissions (6780 members)69 tribunal NDPBs – these operate within a field of law (19882 members)137 boards of visitors to penal establishments (1823 members)4534 local public spending bodies – including 623 National Health Service (NHS) bodies suchas NHS trusts and health authorities (between 65000 and 73000 members).Quango numbers fluctuate from year to year. Nevertheless there is a large number of themand they are collectively – and individually in many instances – responsible for large amountsof public funds. For example, the NDPBs spent in total more than £24 billion in 1998.The boards of NHS bodies are made up of executive and non-executive directors(NEDs). In this regard they resemble structures common to many companies andother commercially run bodies. In public limited companies the shareholders – actingcollectively – can confirm in post or vote out of office a director. In the NHS thesituation is rather different. Technically speaking the Secretary of State for Healthhas the ultimate say over who is appointed or removed from NED service on NHSbodies. In this the situation resembles that of more than 5500 quangos and similarnational and local public bodies. Members of NHS boards are also meant to operatewithin a national NHS policy framework. In this sense they have similar roles to localgovernment councillors, who must also operate within national or devolvedgovernment guidelines and rules, while also having responsibilities to local residents. 9
  10. 10. 2.3 NHS bodiesThe Department of Health is responsible for more than 4000 public appointments inEngland to bodies that include NHS Trusts, Health Authorities, Special Health 13Authorities (SHAs) and NDPBs . From April 2000 a new type of NHS body – thePrimary Care Trust (PCT) began to enter the field. Most of the appointments aremade by the Secretary of State for Health to local NHS boards. Appointments aremade to 364 NHS Trusts, 99 Health Authorities and 17 PCTs. The norm is for eachboard to have five NEDs (with an NED chair), and five full time executives. SHAsand DoH NDPBs are mainly national bodies, with a wide range of specialistresponsibilities. They range from executive bodies such as the National BloodAuthority and the Public Health Laboratory Service to entities such as theCommittee on the Safety of Medicines and the Scientific Committee on Tobacco andHealth. The DoH is currently responsible for 15 Special Health Authorities, 7Executive NDPBs and 37 Advisory NDPBs. In Scotland there are 15 Area HealthBoards, 28 NHS trusts and two specialist quangos. Wales has 5 Health Authorities, 15NHS trusts and one specialist body. In Northern Ireland the situation is slightlydifferent, with organisations having responsibilities for both health and socialservices. There are 4 Health and Social Services Boards along with 20 Health andSocial Services Trusts and 7 specialist public bodies.Directors’ views on quangosThe IoD encouraged its branches to discuss issues connected with quangos, in the first 14quarter of the year 2000. The following is taken from the summary report of the outcome :‘In response to the question on the case for continuation of quangos the answer seemed to bea qualified yes. One comment was that they were a good way of getting innovative andpractical solutions by drawing on skills from outside a “conservative and uncommercial civilservice culture”. They could also be useful in carrying out activities such as certain regulatoryfunctions. Others wanted a review of quango numbers, as there seemed to be far too many. Itwas proposed that advisory NDPBs be drastically cut, beginning with areas in whichspecialists could readily be sought to give advice to government on individual issues. …‘There were thought to be some examples of bodies that performed well in health, highereducation, industrial tribunals and prison visiting. On the other hand, there was a perceptionthat there were quite a few poorly performing bodies that had outlived their useful lives. Onebranch remarked that “Directors would not be the men and women they are if there were nosuggestions for improving the situation …” …‘Generally, the opinion was that there should be greater openness. One IoD branch discussionled to the comment that, “Just because a Quango has members of the public serving on itscommittees … or main board, does not mean that it is accessible and accountable”. Inpractice, directors have valuable experience to offer “given their expertise at setting strategicobjectives and delivering results – that’s real accountability!”. Furthermore, board membersshould have the same level of accountability to the public as company directors have to theirshareholders. Some contributors to the debate wanted there to be elections to quango boards,especially for the more powerful and high profile bodies, although the practicalities of doingthis would need to be considered. …‘One view was that there was an “in group” who were frequently chosen to serve on boards ofpublic bodies. … Although it was recognised that there could be problems of timecommitment, it was felt important to try to achieve a mix of experts and lay people.Independence of mind was seen as very important in board members.’ 10
  11. 11. According to supporters of the quango model, accountability is ensured by virtue ofthe relevant secretary of state’s and Parliament’s powers to scrutinise the actions ofthe various public bodies. With the best will in the world it would be an impossibletask to adequately supervise so many individuals in so many organisations in this way.There are still perceptions along the lines of those expressed by Dr Peter Brand MP,that appointment to an NHS body “has become a second or even first career for somepeople, leading to well-paid appointments in quango-land”15. These remarks are intune with some of those made in the consultation exercise of IoD membersconcerning quangos (see the box on the previous page).2.4 Accountability in the NHSWill Hutton of the Industrial Society has been trying to rekindle a debate about theaccountability of those who have been given stewardship over the various parts of theNHS. In a report commissioned by the Association of Community Health Councilsfor England and Wales (ACHCEW)16 he and others tackled the issue of an“accountability deficit” in the NHS. The report did not recommend direct election ofNHS boards. Health minister, Lord Hunt of Kings Heath, subsequently promisedthat the ACHCEW report would be considered seriously by the Government17. Itmay be ironic, but the Government has since decided to abolish CHCs, as part of theNational Plan for the NHS. In place of the unpaid volunteers on CHCs, who aremeant to take a patients’ perspective on local NHS service delivery and public healthissues, are to come “citizen and lay membership” of a succession of new quangos andcommittees. They all fall well short of dealing with the question of the “democratic 18deficit” in the NHS. This “citizen and lay” membership will form :• One third of the new NHS Modernisation Board [sic];• One third of the new Independent Reconfiguration Panel [sic];• A new Citizens Council to give advice to the National Institute for Clinical Excellence (NICE);• Additional appointments to the General Medical Council (GMC) and other professional regulatory bodies;• Citizen and “lay” inspectors on all Commission for Health Improvement (CHI) review teams;• Older people represented on the CHI’s inspection teams;• Local advisory forums in each health authority area;• Patients’ forums in each NHS trust with representatives drawn from local residents as well as patient groups and other voluntary organisations (see also section 2.6 below).Labour peer Lord Harris of Haringey – formerly chief officer of ACHCEW –suggested that the Local Government Bill currently under discussion contained aprovision for a variety of forms of local government. He suggested having a locally 19elected commissioner for health services . During the debate points were made as towhether many people would vote in elections to NHS bodies, given the usually lowturnouts in local council elections.The Labour Member of Parliament Frank Field is also among those who have called 20for NHS trust boards to be elected . Apart from the idea of there being local control,he also suggests that this would protect government ministers, who would not then 11
  12. 12. be held accountable for everything that went wrong in the NHS. The very firstminister for the NHS, Aneurin Bevan, predicted that health ministers wouldeventually become answerable for every dropped bedpan!Liberal Democrats have supported Primary Care Groups (PCGs) and PCTs, providedthat there is democratic accountability at trust level21.2.5 Councils of advice?There have been continuing calls for local government councillors to be appointed to 22NHS boards . This is what happened in the case of health authority boards prior tothe previous government’s separation of health service providers (NHS trusts) fromhealth service “purchasers” (health authorities). It may be argued that the role oflocal councillor is onerous in itself, and that creating extra duties for some byautomatic appointment to NHS bodies does not in fact do justice to the requirementsof the two types of organisation. There are now closer working arrangements betweenthe NHS and local government. To this extent it does seem sensible to have somedegree of cross membership of boards. However, a general call for automaticrepresentation could seem to be special pleading. If NHS trusts were to become free-standing bodies (see section 5.4.1) then the case for appointing councillors to boardswould weaken. In any case it would restrict the pool of talent from which directorscould be drawn. Just because an individual is involved in public life does not meanthat all aspects of public duty should be personified in one and the same individual.In other spheres the Government has been keen to follow overseas examples ofpractice in governance, for example in local government, with the introduction of the 23notion of directly elected mayors, and cabinets for local councils . So why not inhealth services and the NHS? See chapter 5 for some possibilities. It may be salutaryto recall that Aneurin Bevan (at a time when the members of the various pre-NHSlocal health committees and boards were unpaid volunteers) believed that “electionis better than selection”. He also thought that the introduction of democracy into therunning of the parts of the NHS should await reform of local government into all- 24purpose bodies that could encompass the NHS .The Government has now decided to go for a middle way. Local government is to begiven the power to scrutinise the NHS locally, by means of calling the chiefexecutives of NHS organisations to attend the main local authority all-party scrutiny 25committee, if the authority wishes to do so . This process is also to be available forconsideration of major changes in service provision. Although it would be a moveaway from the present situation whereby largely unelected CHCs have a right ofreferral to the Secretary of State for Health, it would still be a case of one public bodyscrutinising another public body. According to a straw poll by the Local GovernmentChronicle, 69% of 109 local authority managers did not believe that they would have 26the powers they would need to hold the NHS to account . (Although it mightprovide some interesting exchanges of view and ideas, would anybody seriouslysuggest that, say, the chairman of J Sainsbury be required to appear before the boardof W H Smith to account for how he had been serving the public in the samegeographic location as some of the latter’s shops? In both this hypothetical exampleand the intended NHS process neither “scrutineer” would actually have any powerover the examinee, as it were.) 12
  13. 13. Many, including the renowned health policy advisory body the King’s Fund, havecommented about the NHS in general, that it has never been good at taking theneeds of local people into account27. An extreme example of this – if not rivalrybetween two public bodies – is the battle between a local authority and the NHS inLincolnshire. South Kesteven District Council organised a ballot in May 2000, callingfor the resignation of all five of Lincolnshire Health Authority’s NEDs28. In a 25%turnout, over 7500 (98%) people voted in favour of the proposal. The Council was toconsider in Autumn 2000 the idea of seeking to replace the incumbents by electedrepresentatives. The outcome of this local difficulty will be interesting.“The real alternative to secretive, centralised, bureaucratic government is a bonfire of thequangos and greater democracy and decentralisation”,Gordon Brown MP (now Chancellor of the Exchequer), 1995 (reference 29).2.6 A forum for debate?As mentioned in section 2.4, it is intended that CHCs be abolished. Indeed, referralsin future, rather than to the DoH, would be to a new body, the IndependentReconfiguration Panel30, although the final decision would still rest with the Secretaryof State for Health. There are plans to have randomly selected patients chosen forhalf of the places on new patients’ forums, which are to be set up in every NHS trustand PCT31. The other half is to be made up of representatives of local patientorganisations and voluntary bodies. Although it would be a move toward greater localaccountability (as compared with the status quo) it might also be seen by some as amove from the so-called NHS “postcode lottery” of geographic variation inavailability of certain drugs, to a local NHS lottery for places on a local quango.Set against all this is the proposal by the House of Commons Select Committee onPublic Administration, that an independent commission be established to appoint the 32NED members of NHS boards . The Government subsequently announced that itintended to remove the power of appointment of the trust and authority 3000 NEDsin the NHS from the Secretary of State for Health to a new NHS AppointmentsCommission33. This would be a quango which appoints people to other quangos.“If the great and the good are not great and good enough to be elected they should not get asecond bite at the cherry through the appointment system”,Dr Peter Terry, speaking at the British Medical Association (BMA) annual meeting 2000(reference 34).The Patients’ Forums are to have the right to direct representation on each NHStrust board – elected by the Forum31. First there is the fact that half of the Forum is tobe randomly selected from participants in respondents to an annual patient survey bythe trust. (Presumably these people would have been users of the local healthservices fairly recently.) Second, any person then chosen by the Patients’ Forum tobecome a trust board member could be placed in an invidious position. This isbecause the duties of a board of directors should be (collectively) to the organisationbeing directed. The NED drawn from the Forum would need to have a fiduciaryduty to the trust, not in some way to the Forum. It is entirely possible that thehapless individual would have a hard time of it, by trying to square the circle ofrepresenting the Forum’s views and at the same time of sharing the collectiveresponsibility of the board. If the Forum were not pleased with the person’s 13
  14. 14. performance then he or she could presumably be removed and replaced (while theother board members would not be subject to this mechanism). Yet no individualdirector could be expected to be the leader in changing policy and practice when in apotential minority on a board. From the trust board’s perspective the situation couldbe viewed as having a director who might become the permanent “opposition”.These are hardly good omens for constructive and harmonious workings of the board.An entirely plausible alternative scenario is that the Forum-drawn NED would “gonative” for the sake of a quiet life. By treating the board as having differentconstituencies to which NEDs might be thought of as accountable, rather thanseeking to reform the way that NHS boards as a whole are constituted, the resultwould be a mishmash. Notwithstanding any intention to try to bring about widerinfluence on the trust boards’ operations, this scheme as set out in the NHS Planwould lead to appalling corporate governance and should be dropped.In a further move toward centralised government by quango, the Secretary of Statefor Health has now set up a wholly appointed Modernisation Board to oversee thework of the Modernisation Agency [sic]. It consists of senior managers, clinicians andpatient representatives. Clearly there is a need for modernisation and improvement.The chief executive of the NHS Confederation has called for it to have an evenwider remit; advising the Secretary of State for Health on all the work of the DoHand the NHS35. This national body does nothing to address the chronic deficit of localleadership, however. Also, given that it is made up of some 31 people, it is hardly anoptimum size to make any decisions.It may be difficult to avoid seeing a general principle somewhere: if there’s a difficultdecision to be made, set up a quango. More seriously, the question should be askedas to whether the new crop of quangos and other administrative arrangementsdescribed in section 2.4 are likely to really produce a consumer-based perspectivewithin and without the NHS. We think not. Other possibilities for involving patientsas consumers are considered in chapter 5, section 5.4.1. 14
  15. 15. 3 Management and risk3.1 First do no harm!“I will use my power to help the sick to the best of my ability and judgement; I will abstain 36from harming and wronging any man by it” ,from the original Hippocratic Oath.The modern form of the Hippocratic Oath that is adhered to by doctors exhorts aphysician to first do no harm. That is, before examining a patient in any way, let aloneattending to any ailment, the doctor should do no harm. Now, the nature of aparticular illness or discomfort may mean that in fact a clinical intervention will carrya risk of harm. For instance, colonoscopy – visual examination of the lowest part ofthe intestines with an optical device – carries the risk that the instrument used willperforate the bowel and thereby induce damage. The doctor will, as a matter ofroutine professional practice, have to weigh up the likely benefits and disbenefits ofthe intervention – or non-intervention. In this case it might conceivably includeconsiderations as to the general wellbeing of the patient (assessing frailty and otherfactors), knowledge of the presence or absence of cancerous tumours or other lesions,other existing illnesses, and so on. In general, all health interventions carry somedegree of risk to a patient; something that we feel is not always appreciated by mostpeople, including some politicians.For many years the NHS has gathered a huge amount of personal patient-specific 37data. Large amounts of this data have remained unused . This is true even at boardlevel. For example, vast resources have been utilised over the years in gatheringhospital activity data, much of which is inaccurate and most of which has beenunused by management. There are still huge concerns about data variability, 38especially between the NHS and local authority social services. Although the NHSis not necessarily unique in its lack of intelligent investigation and utilisation of data(compare the large amounts of point of sale data gathered by many retailers), it is anissue of serious concern. This is because the “product” of the NHS is (or ought to be)better health outcomes. By not having concentrated on meaningful measures for solong, there is a huge gap in the NHS as to the sort of information that the best runbusinesses use to measure their progress. If a bank found that it had similar levels oferror concerning its transactions then the exigencies of day to day business would actas a powerful stimulant to correction. The NHS equivalent of misposting a chequedeposit could be performing the wrong clinical procedure. People’s lives shouldpresumably be regarded as more important than their financial transactions. Devisersof yet further NHS “information strategies” please take note. 15
  16. 16. 3.2 Healthcare and risks 39The NHS Code of Practice on Openness covers many things . It covers informationabout services provided, standards set and results achieved. It covers information onhealth policy proposals and changes to service delivery. It also covers the way thatpeople can go about gaining access to their medical records. The Code of Practiceomits one major area. That is the general topic of the intrinsic risk of medicaltreatments.With the best will in the world, medical interventions can be risky affairs. Thisshould not come as so much of a surprise if one considers:(a) the complexity of the human body and of its functions (with its millions of interdependent chemical reactions going on each second);(b) the incomplete nature of medical knowledge and how best to apply it (despite modern science and new developments, not all diseases can be cured and not all symptoms alleviated);(c) the fact that health services – all health services – are themselves complex systems containing many thousands of different people with different professions and different skills – and different faults and foibles (nobody is perfect). And the system itself is unlikely to be in a state of perfection at any given time;(d) the subject of public health, which deals with the various influences on health, including housing, education, availability of social services, and not merely the particular biological and clinical factors with which health 40 professionals are typically trained to deal with .Point (b) above is very important, but heavily influenced by points (c) and (d). Healthservices are managed systems. Managed systems have to exist in similar regimes,whereby the attributes of individual employees and the various functions anddepartments have to be taken into account. When considering the business andfinancial performance of a firm, the directors and managers often have to think aboutthe risks involved. These may include the perhaps more obvious risks to people’shealth and safety, but also nowadays may in principle include a much wider range offactors (see section 3.3 below).Medical procedures are not always entirely successful. Incomplete knowledge,combined with human error, can lead to a figure of success that is much less than100%. The job of management is to try to optimise resource use so that “avoidablerisk” is minimised as much as possible (given that resources are finite). Clinicianswork to minimise the risk attributable to their interventions (doctors do so accordingto the Hippocratic Oath). Management should work to minimise the risk attributableto extrinsic factors – such as having unclean or unsecured premises, but at the sametime ensure that information on outcomes is focused on, rather than simply processes(e.g. numbers of operations performed). The total risk – as far as patients areconcerned – results from a combination of these two sorts of risk (together with thepersonal risk brought by the patient, as a result of many possible influences,including age, sex, environmental exposure, genetic makeup, past medical history, 16
  17. 17. and lifestyle or behavioural factors). A risky business? Not all of these risks can becompletely specified, let alone quantified. However, what is lacking in the arena ofpublic debate is something about the actual intrinsic risks of medical treatments.It is said that perhaps 15-20%, or maybe as few as 10%, of doctors’ interventions arebacked up by evidence to show that the interventions did more harm than good41.Less extreme-sounding, perhaps, is the suggestion that only perhaps 15% to 20% ofmedical interventions have been rigorously validated. This does not necessarily implythat the remainder are not efficacious. But it does – or should – imply that thereshould be much more honesty about what can be achieved by clinicians and healthservices. This should also be set against the trend of people – at least in the moreaffluent parts of the world – to be seemingly obsessed by all manner of risks (real orimagined) to health, at a time when their populations are actually enjoying a generalstate of health that is probably the best in all human history42.3.3 Healthcare, and health and safetyHowever, rather than the health sphere per se, it is in the area generally thought of ashealth and safety about which some of the most fundamental problems within the NHShave manifested themselves.“The board is required to be sufficiently knowledgeable about the workings of the health 43authority or trust to be answerable for its actions …” .The case of general medical practitioner (GP) Dr Harold Shipman encapsulates manyof the management problems. The mortality data that might have been used to givemuch earlier detection of the murders being committed by Dr Shipman wererecorded and registered over six years but neither looked at systematically noranalysed44. This is a very stark example of how certain basic duties of care werelacking to say the least. Other examples have included discarded blood samples,human tissue and other clinical waste being found during demolition work at a 45disused hospital .Methicillin-resistant staphylococcus aureus (MRSA) is a bacterium which causesmany problems in hospitals. Bacteria are constantly evolving as different antibioticshave been introduced over the years. The type of bacterium known as MRSA isparticularly resistant to such substances (of which methicillin is one). High bedoccupancy, high workloads and insufficient nursing staff have encouraged practicesthat have led to increased risk of falling victim to MRSA attack. Skin-wound andblood infections can result. The NAO has commented about occurrences of poorhygiene. Some of this results from individual staff not following basic standards.Some will no doubt have resulted from overworked staff having insufficient time – orfeeling they may have. The net result can be increased incidence of nosocomial(hospital-acquired) diseases. Hospitals are meant to be there to help people becomewell, not make them ill. To be sure, they are not risk-free establishments. However,there are safeguards that can be set in place to minimise unnecessary risk.These are comments about practices. Practices are amenable to management. It hasbeen said that only 10% of NHS hospitals have proper infection control plans andonly 15% infection control budgets, although apparently all now have infection 46control teams in place . Would a delicatessen remain in business very long – let alone 17
  18. 18. stay out of trouble with environmental health officers doing their job – if it failed totake seriously matters of food hygiene and allocate appropriate resources to do so, aspart of the normal running of the business? We think not. Yet this is another area wherebasic health and safety considerations seem to have been bypassed in thedeliberations of too many NHS boards until fairly recently.“Is there a clear understanding by management and others within the company of what risksare acceptable to the board?”Internal Control Guidance for Directors on the Combined Code, Institute of Chartered Accountants 47in England & Wales (ICAEW) .Many different aspects of corporate governance are converging on general health andsafety issues. For example, there are the Department of the Environment, Transportand the Regions (DETR) and Health and Safety Commission (HSC) plans to updatethe Health and Safety at Work Act 1974 (reference 48). In particular, the topic ofinternal control has been on many board agendas in recent months. The CombinedCode of the Committee on Corporate Governance, issued by the Stock Exchange,contains provisions requiring directors to review and report at least annually on theeffectiveness of the group’s system of internal controls. The ICAEW set up aninternal control working party chaired by Nigel Turnbull, an executive director ofRank Group plc. Among other things, its guidance includes specific reference to risksand risk management. For example, boards of directors are recommended to discussthe nature and extent of risks facing the company, and the extent and categories ofrisk that are regarded as acceptable for the company to bear. This Turnbull guidancefor London Stock Exchange listed companies is being discussed and implementednot just by large public companies. The ICAEW is keen to promulgate the principlesof risk management – including ensuring the existence of management processes thatare adequate to identify and monitor risks – in all sectors; private, public and non- 49governmental .Referring to health and safety in general (not specifically about health services), theRoyal Society for the Prevention of Accidents (RoSPA) has suggested that moreshould be done to improve protection of the public by focusing on Section 3 of theHealth and Safety at Work Act 1974 (reference 50). RoSPA considered that thisaspect of health and safety law was underdeveloped in spite of good guidance havingbeen issued on control of risk to the public at sports and leisure events, for example.“It will be important to establish a bridge between risk management in the non-clinical areas 51of health care (controls assurance) … and clinical governance” ,Professor Liam Donaldson, Chief Medical Officer, DoH.A recent Home Office consultation document on “corporate killing”52 floated the ideaof a new law that would apply to a wide range of organisations, not only largeincorporated businesses. This was against a background of notorious disastersinvolving large companies. These included the Paddington rail crash of 1999, one atSouthall in 1997, and the Herald of Free Enterprise capsizing of 1987. TheGovernment’s intention is to define a new offence of corporate killing in situationswhere general failure by management could be held responsible for breaches ofhealth and safety rules that led to death. The IoD has welcomed the intention toallow prosecution of the body corporate (but not individual named directors).Opposition was expressed to any extension to cover undertakings in general – whichcould lead to many voluntary organisations being included within the scope of newlegislation. This could be a sledgehammer to crack a nut, as it were. It is conceded 18
  19. 19. that an anomaly could be thrown up. This could come about in the healthcare sectorif private incorporated providers of care could be prosecuted for corporate killingwhereas NHS providers could not.Nevertheless, in the context of health services, whether public or private, there are –or we think ought to be – very clear implications as to health and safety per se. Boardsof directors are the leaders of corporate bodies. They set an example in strategy anddirection. NHS boards are now showing signs of more explicitly considering riskswithin the ambit of health and safety. Bearing in mind that health and safetylegislation applies not just to employees but also to customers and visitors, boardsshould focus far more on what this means for a typical NHS establishment. Theyshould spend more time understanding the nature of risks, both clinical and everyday“normal” risks. Crown immunity has already been removed from NHS trusts for anumber of years, although subsequent practices seem not always to havedemonstrated the seriousness of dealing with issues of health and safety. There arestill examples such as that of an NHS trust being fined the maximum possible underhealth and safety law after an 88 year-old patient on a supposedly secure ward fellfrom a window after wandering through an unlocked door, which illustrate the needfor action. As the Health Service Journal put it, “It would be easier to defend the NHSas the guardian of high standards if stories about avoidably poor care cropped up lessoften”53. It should now continue to focus the collective NHS mind, as it were.In response to a request for the views of IoD members about various aspects of healthand safety, one director was interested in the liability of NHS board members under 54health and safety law . Another commented that it was ‘iniquitous that seniormanagers in the public sector are able to “play at health and safety”’. In themeantime, there could be an iceberg approaching. Hundreds of millions of pounds’worth of court cases relating to claims against the NHS could be looming over thenext few years. If even some of these were to be successful, then large sums ofmoney could be removed from health services via payment of legal fees and fines,and this is apart from the diversion of management resource tied up in dealing withlitigation. This is a stark reminder of the eventual costs of prolonged failure toaddress many of the fundamentals. (It has been said that most complaints about theNHS that do end in formal legal proceedings could have been settled if the NHS haddemonstrated that somebody actually cared about the person’s situation. Thus evenbefore matters of health and safety there is a vast gulf to cross with regard to“customer care”. For example, a study of five anonymised cases by Professor ChrisHam and Shirley McIver of Birmingham University’s Centre for Health ServicesManagement, contains the suggestion that even if decisions about treatments or thewithholding thereof are explained to patients face to face, the patients may still beprepared to go to the media or the courts if they feel that the NHS does not allow 55scope for decisions to be changed .)The Home Office proposals on creating an offence of “corporate killing” could lead(by good example rather than legislation, perhaps) to NHS trusts, local authoritiesand public utilities having to ensure that there are adequate management systems in 56place to better protect employees and users of services .The Government’s new systems of clinical governance, which are now being rolledout into all parts of the NHS, are welcome signs of remedying some of the lapses thathave gone on over the years. Clinical governance is an important element ofimproved quality, but not the whole picture as we outlined above. In this respect it ispleasing to note the recent comment of the Government’s Chief Medical Officer 19
  20. 20. that, “It will be important to establish a bridge between risk management in the non-clinical areas of health care (controls assurance) … and clinical governance”51.“Labour will not accept any excuse for poor performance”, 57Rt Hon Alan Milburn MP, Secretary of State for Health .3.4 Hippocratic or hypocritical?The GMC, which was established by the Medical Act 1858 is the main overseer ofmedical practice in the UK. A system of self-regulation exists. The law has permitteddoctors to define medical knowledge and which practices are acceptable58. It has beensuggested that – instead of being reformed – the GMC be abolished because one ofits practical effects has been to protect bad doctors rather than removing them from 59the system . As Dr David Green put it in support of that suggestion, concentratedmonopoly power is the problem. He postulated that, although the various medicalroyal colleges would have some influence in licensing doctors, consumerorganisations might get involved.Society effectively countenanced the establishment of a “medical elite” which washighly trained and rewarded, but who also had duties including (literally) powers oflife and death decisions. Because of the complexities of function of the humanorganism – or rather its dysfunction in the case of medicine - there is an enormousinformation imbalance between trained doctors and most patients, and as to how totreat many illnesses. This is so despite the large proportion of medical interventionsfor which evidence of effectiveness is at least lacking (see section 3.2). It can beargued that the relative financial rewards for most doctors are now somewhat lessthan they used to be, yet much of the power (and burden) of decision-making lieswith people who have undergone long and intensive periods of training at highereducational establishments and elsewhere. (Some observers think that training indealing with patients as human beings has not necessarily kept pace with that inmedical science and technology, however.)The GMC has produced proposals for regular monitoring of doctors with 60“revalidation” checks every five years . The revalidation proposals have met withopposition from hospital doctors, who called them bureaucratic and unworkable.Parliament has passed legislation to permit the GMC to suspend doctors who arebeing investigated and also to inform NHS trusts if a doctor’s practices are being 61looked into . This was by way of the Medical Act 1983 (Amendment) Order 2000.The NHS Plan refers to the in-principle Government agreement with the BMA for anew contract with consultants that will make annual appraisal and job plans 62mandatory . Additionally, for GPs, there are proposals to introduce a greater 63emphasis on quality of services provided .There must be few examples of an employer apparently allowing such publiccriticism of particular groups of employees – as has been going on in Britain withregard to recent “blame” stories about doctors and nurses. One actual example – thereference to the “dullards” who run London Transport, by one of the candidates forthe office of London Mayor – serves to illustrate an important principle. Both theNHS and London Underground are examples of bodies that are – or should be –providing high-class public services. There is widespread concern that both are notdoing so. Therefore criticism, when it is due, should be directed at those responsible 20
  21. 21. for the oversight of the organisation. That means the board of directors and notparticular groups of employees. Thus Ken Livingstone’s comments were hardlylikely to be aimed at train drivers, say, or ticket sales staff specifically. They weredirected at senior management. The situation should be the same in health. RuthLea used the phrase “corrosive cynicism” to refer to the management culture withinthe NHS which has progressively demoralised key groups of professional staff64.The UK Central Council for Nursing, Midwifery and Health Visiting announced thatmore nurses were struck off for misconduct in the financial year ending 31 March2000 than ever before – although the actual total was 96 nurses, midwives or healthvisitors. Yet the Health Service Journal reported that that figure was in fact equal to thecorresponding total for the year 1996-1997 (reference 65). NHS staff do difficult workoften in far from adequate conditions. The Government should act sooner rather thanlater to try to stamp out the current emphasis on the casting of aspersions and blameon individual clinicians who have erred. Doctors, for example, have felt unjustly 66criticised . The IoD in no way condones negligent behaviour or malpractice, but thenaming and shaming of key groups within the NHS will do nothing to rectify matters.The “blame” – to use the word again – should quite properly be directed at the verytop of the organisation. Depending on the circumstances this may mean ministers,senior DoH managers – and the boards of directors of NHS trusts and healthauthorities. Certainly at NHS trust and health authority level boards have a collectiveresponsibility, not one that allows abrogation of responsibility or allocation of blame.This should be remembered.“If the hon. Gentleman, as the local representative, is so worried about the matter, he shouldtake up the trust’s performance with the people who are responsible for it”, 67Alan Milburn .Health minister Lord Hunt of Kings Heath has referred to a new statutory duty ofquality on NHS trust chief executives to ensure that they and the trust boards have 68responsibility for overall quality of service . This will include taking forwardinitiatives on clinical governance.If recent remarks by the Secretary of State for Health are indicative of how it is thatthe local parts of the UK’s health services should be held to account (see the boxabove), then this is a move in the right direction. In the next chapter we shallexamine ways of doing even better in this regard. 21
  22. 22. 4 Management and medicine4.1 Trust in managementAccording to the NAO, Members of Parliament are frustrated by the difficulty inmaking beneficial changes to the NHS69. It has been said by some that managementwithin the NHS may be pictured as a matrix, in which the various professional groupsmake up one dimension and the actual patients and other stakeholders make up theother. Unfortunately, in the matrix there are very few intersections that would beexpected to occur if there were genuine lines of management accountability andresponsibility. Thus nurses, health visitors and physicians may have had their ownchannels of communication and professional demarcations, which may or may nothave coincided with those who were supposed to have management responsibility forthe organisation. One experienced Health Service manager who had worked in othersectors than the NHS told the author of instances of isolated projects underway inparts of individual NHS organisations, about which nobody seemed to care whetherthey were ever completed. A tale of a newly formed NHS trust having had its firstsenior management meeting eight months after the trust’s formation seemed,although anecdotal, to be not untypical of a certain lack of meaningful leadership intoo many parts of the NHS. At least any leadership did not seem to connect in anintegrated way with the diverse managerial, clinical and other groups within theTrust. Other initiatives have been known to get underway from time to time that thelocal boards appear to have little interest in. Many people have felt that the NHSdoes in fact perform quite well in areas such as emergency care and many aspects ofprimary care. Management is in need of improvement to underpin such areas, butalso to take forward other much needed changes.“Government promises it will pay attention to ‘the customer’s experience’ of the healthservice. Patients would rather they paid attention to how well the service treats and preventsdisease. Patients and staff need neither charters, visions, values nor any of the rest of ‘modern’ 70management.”In its annual report 2000 the NAO recommended that managers in the NHS neededto use developments in both financial and clinical governance to demonstrate and beaccountable for improving NHS performance. Clinical governance has beenpromoted within the NHS since 1997, against a background in which the pursuit ofquality was somewhat fragmented within the Service, with management initiativesand professional clinical specialist initiatives having very little connection with eachother51. Indeed, there has been at least a duality of lines of accountability as betweenthe doctors and the management – to put it crudely. Sorting out this out must be atthe heart of making real progress. A statutory duty concerning quality has since then 22
  23. 23. been placed on every local NHS body. This could have important positiveimplications if it is translated into action.The Government wants to ensure that each NHS acute trust has a board memberwith responsibility to monitor hospital cleanliness71. One journalist has written, “If ahospital has to be told, at top level, to keep its wards clean … what hope is there … ofreducing the maximum waiting time for an operation …?”72. This is a fairlyfundamental question.4.2 Dichotomies: cutting through extremes of careMuch of the discussion about changes to the NHS have focused on two extremes; onthe one hand, a totally publicly funded and run centrally-directed health service, anda patchquilt of pay as you go private provision on the other. In reality theoverwhelming majority of health services in the world are neither totally state run nortotally privately run. Oft times the United States of America (USA) is held out bypeople in the UK as a negative example of “look what can happen when you have aprivate health system!”. In reality perhaps 67% of non-state hospital care in the USA, 7350% of daycare and 20% of primary care is accounted for by mutual organisations .Even in the UK prior to the formation of the NHS, hospitals were voluntaryinstitutions that were run by local committees who shared an ideal of wanting to serve 74the public .“No other organisation worth more than £45 billion would allow £100 million units (theaverage cost of running a hospital trust) to be managed by people who have little or nomanagement background except a diploma in health management”, 75Dr Kailash Chard, GP .There must be improved management techniques (which should include bothclinical governance and patient participation) to rid the NHS of the ridiculous – andcostly – bureaucracy which can lead to multiple appointments for the investigation ofthe same condition: “… people …were going for … operations … they saw eight sets 76of health professionals and every time they had to wait” . A car repairer faced withmultiple faults on a vehicle is hardly likely to want to tell the customer that thebrakes will be fixed on Monday, but that if the owner would like to bring it back twoweeks Thursday then somebody might be able to look at the engine – or if it did givethat sort of response very often would not expect to remain in business for long.‘In the face of modern consumer expectations the NHS can no longer continue in a culture of“producer knows best”’. 77Alan Milburn .On the administration front, a consultants’ report by the Virgin Group that wascommissioned by Alan Milburn, referred to the “dead hand of bureaucracy stifling 78staff who had lost pride in their jobs” . This corroborated Ruth Lea’s comments 64about “corrosive cynicism” . Another commentator has pointed out a commonexperience of many people working in the public sector, including the NHS. This isone of employees being prevented from focusing on purpose by the requirementinstead to focus on those things that the hierarchy has decided are important. He putit as bluntly as, “people are dying while the health service is being distorted by 23
  24. 24. targets”70. This was not merely about the nonsensical and entirely process-orientedwaiting list target*, but a remark meant to focus the mind on the notion that askingpeople working in huge bureaucratic organisations to fixate on targets is likely toproduce an effect of managing the numbers rather than improving working methodsand healthcare outcomes. The comment seems highly apposite to much top-downmanagement in the NHS over the last several years. Unfortunately there has been aculture of delusion of infallibility. This has been allowed to continue over the yearsby politicians, health professionals and the public. It has to change – the Governmenthaving at least recognised the problem, in the NHS Plan.“… if the government insists on learning from the private sector why does it learn all thewrong lessons and apply solutions which the private sector long ago rejected or found 79wanting?”4.3 Managing medicsProfessor Karol Sikora, formerly in the NHS as clinical director at the HammersmithHospital and now working in the private pharmaceutical sector tells the tale of having 80had eight consultants under his management when he was in the NHS . Hedescribed them as unmanageable. “The chief executive can’t tell them what to do,no one can … In my company … if I’m told to get on a plane … tomorrow, I go – thatwouldn’t have happened in the NHS”.NHS Plan initiatives such as the “traffic lights” system81 have been described as a way 82of encouraging “managerial infantilism” . This traffic lights system is intended to bea way of summarising the performance of NHS organisations according to a crudethree-step scale that is analogous to the three colours of British traffic lights. Colourswould be assigned after an assessment of a number of different factors+. If the fears ofsome turn out to be justified, perhaps boards and managers in other sectors of the stadvanced world economy of the 21 century may look forward to receiving similarreports in the regular management accounts which they use to monitor the progressof the business. Some people of a mischievous nature might even spot a marketopportunity for NHSE brand coloured pencils for the purpose.Rather than a comparison with road transport, an analogy with an airline is particularlyappropriate. Airlines have to operate systems that ensure aircraft literally deliverpassengers and goods safely. The companies have to ensure compliance with national* The (now slightly reduced) emphasis on waiting lists (it was formerly not even waiting times, which atleast has more relevance to individual patients), without any consideration as to severity of condition orlikely response to treatment, is a wonderful example of a target that is pretty far removed fromconsiderations of how to optimise health gain. It was acquiesced to by politicians, boards and manyothers in the NHS, despite warnings from experts, including health economists and public healthpractitioners prior to its introduction as one of the objectives of the Service after May 1997. “Doingmore” of something without considering other factors is not necessarily the best way to utilise resources.+ Linked to this, the Government intends to introduce incentives by establishing a National HealthPerformance Fund in 2001, building up to £500 million a year by the year 2003-2004; about £5 million for eachhealth authority’s geographic area. Funds are to be allocated according to performance against annually agreedobjectives. “Green” health authorities, NHS trusts, PCGs and PCTs would get their share of the Fund as ofright. “Yellow” NHS organisations would have to use their share for improvements agreed by the NHSregional office. Red would signify bad performance. For these the allotted fate would be monitoring by theModernisation Agency. 24
  25. 25. and international safety rules. They have management systems that allow managersto work with highly trained pilots and other technical staff. In this way they find itpossible to allow the pilots and engineers to have the freedom of using their skillswhile at the same time complying with the business requirements. Thus they mayask a crew to fly from Sydney to New York according to a certain schedule, butmanagers will not sit in the cockpit and tell them how to fly the aircraft. It would bewasteful of resources and almost certainly downright dangerous. Doctors tend to workin isolation whereas pilots are subject to random breath tests and are constantlymonitored by colleagues and also electronically.83 Interestingly, the Government hasborrowed some aviation terminology, with the introduction of adverse incident 84reporting, as part of the NHSE’s “controls assurance project” . Launched in 1999,the project is meant to include risk management. A key criterion is that NHShospitals should systematically identify, record and report incidents (“including illhealth”) to management in a positive, non-punitive, way. To this has been addedreporting, recording and analysis of “near misses”85. 86There have been instances of dismissals of incompetent doctors . However, some ofthese have taken years (two years not being untypical, perhaps) and then aftercampaigns by aggrieved patients and their relatives. The Government has been 87negotiating with the BMA to introduce employer-based appraisals of all consultants .It was intended that, alongside tighter job planning procedures, consultants’performance and time could be managed by NHS managers.Detailed management of such a huge body by politicians should be undesirable ( the aircraft flightdeck analogy above). The new national plan for the NHS states 88that the principle of subsidiarity should apply within the NHS . The stated aim isthat there is to be progressively less central control and more devolution as standardsget better. The Government had already taken steps to reduce the number of explicitinstructions sent out by the NHSE to the NHS. However, it is still sending out up to 89100 health service circulars a year (down from 305 in 1996) . The Government now 90wants that cut to one a week . The idea of centralisation in private sectororganisations, with concomitant restrictions on autonomy and so on, went out of 91fashion around a decade ago . The Virgin report for the DoH specifically blamedover-centralised bureaucracy for the poor state of too many dirty hospital wards, 92chaotic arrangements for booking treatments and a lack of consideration for patients .Before the 1997 General Election the Labour Party promised that its approach was tomove away from unresponsive and heavily centralised monolithic government 93structures . Professor David Hunter of the University of Durham has proposed three 94ways of controlling the NHS . These are:• loose-tight (tightness as to purpose, looseness as to means)• tight-loose (tightness as to means but looseness as to purpose)• tight-tight (tightness as to both means and ends).His preference is for the loose-tight approach, but thinks that governments usuallytend to go for the tight-loose way of doing things. He has expressed the opinion thatthe present Government in fact prefers the last of these styles, which he thinks is apoor way to proceed. Professor Hunter has also set out the view that managers beallowed to manage the overall workflow rather than the individual functions within 79it .The corollary to any desire for removal of centralised direction so as to permit localmanagement to make decisions is that the local management should be up to the job and 25
  26. 26. be wholly prepared to take responsibility for those decisions, good, bad or indifferent. Therewould then be no more buckpassing (“it’s not our fault, it’s the Government/NHSEregional office/local council/incompetent doctors/difficult patients [insert any one ormore of the preceding]”) nor would there be some of the crasser failures ofmanagement, either by commission or omission. But how could such an aim beachieved?The Prime Minister, launching the National Plan for the NHS, did say that ifnecessary, the worst performing trusts would have new management put in. TheCommission for Health Improvement may yet have a big job to do.‘The more NHS management-speak talks about “the people we serve”, the less it feelsobliged to actually do anything about it. It is much easier to put up a lot of meaninglessmission statements on the walls than take the time to find out what patients would like, howthey consider money well spent and thereby save money.” 95Vanessa Bourne, chair of the Patients’ Association .Others have commented on the quality problem in NHS management. The chiefexecutive of the National Association of Primary Care has been quoted in this contextas saying that “’Many problems confronting the NHS now are managerial in 96nature” . 80“Who makes the decisions, at what level and on what criteria?” .4.4 2001: managing the monolith?The chief executive of the NHS Confederation has said that “… we cannot findanswers by tinkering around the edge. We need really radical change in the way 97doctors are trained, managed, judged, hired and fired” . Perhaps, but the same pleashould be made about NHS managers. Another of the NHS Confederation’s ideas –that of a “leadership academy” for the NHS – might be worth serious examination,provided the concept did not degenerate into some of the ultimately meaninglessmanagement gobbledegook that has been so endemic in various NHS initiatives inrecent years. When hospital matrons’ roles were revamped as those of “quality 98assurance managers” in the mid 1980s, such jargon reached new heights ofobscurantism. The Government’s intention to establish a national NHS LeadershipCentre for Health by 2001, under the auspices of the planned Modernisation Agency, 99to develop skills needed in all parts of the Service, could be worth watching . It isintended that it target chairs and NEDs and also heads of departments. 100An alternative view is that what is needed is implementers rather than leaders . DrJonathan Shapiro, of the Health Services Management Centre at BirminghamUniversity, has suggested that the NHS Plan is too centralised. He commented thattop-down prescriptions, the work of NICE and such matters as the traffic lightsscheme (see section 4.3) is likely to diminish any merits that any improved“leadership” could bring about. This view is certainly in accord with the notion thatthe NHS as it exists today is far too big a body to manage efficiently and effectively.Judging by a recent tale, reported in The Observer, that the NHS was hiring outsideconsultants to produce a picture of how many managers there actually were in the 101Service and what it was they were doing, there is a very long way to go . One non- 26
  27. 27. manager in the NHS was reported to have remarked acidly to the newspaper, “’canyou imagine a firm like ICI or the Royal Bank of Scotland – or even your localMacDonald’s – not knowing how many managers it has? It’s a joke.’” Whatever thefuture of the Leadership Centre, it ought to seriously consider best (and appropriate)practice from sectors other than the NHS. In the meantime, a NICE conferenceprogramme for November 2000 contains a session on how to feng shui one’s office. Isthere any hope? 27
  28. 28. 5 Is there really no alternative to the NHS way of providing healthcare?5.1 Alternative forms of healthcare provisionThis Research Paper is mainly concerned with the organisation and running of healthservice provision, rather than the funding thereof. The IoD has already set outsupport for healthcare delivery to be free at the point of use for defined core 102services . As well as that, Ruth Lea suggested that the NHS be broken up into muchsmaller units. In this Research Paper we take a brief look at other possible modelsthan that run by the NHS. Despite the very many and great successes of the NHS,we consider that it is a somewhat arrogant view to assert, as some do, 52 years after itsfounding, that all is still sweetness and light. It is interesting to note that theGovernment’s NHS Plan, whereas it is very firm indeed about having examined (andrejected) some overseas models of funding of healthcare does not contain similaranalysis of extant examples of providing healthcare.The IoD sees no case for supporting wholesale privatisation of the NHS. Even if onebelieved in it, it could not be brought about and there is no point in having aphilosophical debate for the sake of it. Private health insurance, also, is not the totalanswer to the problems of the NHS. Private insurers are not generally very interestedin people who are long-term sick, for example.Ruth Lea proposed that provision of health services be delivered by way of self- 103governing mutuals . The Government’s NHS Plan throws out a challenge to thosewho think that the present NHS is not sustainable: “Often the alternativeprescriptions for healthcare in our country are presented as simple panaceas, rather 104than subjected to adequate discussion and analysis” . We concur with this approach,but also strongly believe that turning a blind eye to some models of healthcareprovision in other countries runs the risk of perpetuating some of the apparentmanagement complacency that the Government itself is trying to tackle in itsambitious NHS Plan. The following chapter attempts a short overview of some ofthose possibilities.“I have headed up and been part of some large organisations and I tell you, I would not knowhow to run efficiently an organisation of a million people and I do not know anybody whowould”. 105George Cox, IoD Director General . 28
  29. 29. 5.2 Mutuality and medicineRuth Lea has advocated that NHS trusts for both hospital and community careshould be taken out of the public sector and become independent non-profit-making 103mutuals . Subsequently others have made similar suggestions (for example, 106Professor John Kay, a director of London Economics ). John Kay set out severalreasons for bodies such as hospitals becoming mutuals. He made the general pointthat there are specific needs that a competitive market may not meet very well.These include situations where:i. customers alone have knowledge that is specific to the business;ii. there are not only individual, but community, benefits from the activity;iii. the service is a local monopoly;iv. the market has missed an opportunity.For health services the last three of these criteria apply. For the first there is a large 107asymmetry of knowledge as between trained clinicians and many people . Despitethe still largely paternalistic nature of the doctor-patient relationship, it is the casethat medicine and its underlying science and technology is not a simple matter, andthere has to be some reliance placed on the body of medical knowledge. This isanalogous to passengers having to have faith in the abilities of the aircrew to handlethe passenger plane in a variety of conditions. There is a change underway – forexample with increasing numbers of patients accessing a wealth of material via theInternet. To be sure, there is no guarantee that the information gleaned in this way isnecessarily accurate, and there is always the issue of needing to interpret it and set itin context. Nevertheless, patients and indeed doctors are coming to recognise achange in the nature of their relationship to become more consumer-oriented – atleast for articulate patients with Internet access (by no means all patients).As far as the IoD is concerned other reasons for considering such possibilities asmutual organisations crop up in addition. These include:1. Recognition that trying to manage a workforce of a million is unrealistic despite the intentions of trying to improve matters by a variety of quangos, national leadership initiatives and potential “naming and shaming” exercises as outlined in the Government’s NHS Plan. A proliferation of quangos may lead to some improvements in certain specialist areas. As a means of managing the NHS it seems unlikely to succeed. For one thing cross-organisation management authority is lacking. For another, the very number of potential interlinks between the new and existing bodies seems highly likely to lead to wasted bureaucratic effort. In the case of the Government’s plans for transport, we have criticised the setting up of a talking shop quango (the Commission for Integrated Transport). On the other hand the IoD gave a cautious welcome to the actual spending plans 108 and DETR’s intended practical actions .2. The fact that the IoD supports giving meaningful freedoms to organisations to most efficiently manage their resources and pursue their objectives. Better objectives decisions could be made, with better corporate governance, and the freedom to take some of the difficult decisions that we fear the NHS Plan will still leave unmade in too many cases, thus not achieving the most efficient and effective use of the nation’s resources to improve the healthcare of the nation. Health policy expert Professor David Hunter has expressed doubts as to whether NHS 29
  30. 30. managers “have the capacity or support to deliver what is increasingly expected of them”109.3. Although the Government, in its NHS Plan has set out many commendable and ambitious aspirations to create a “patient-focused” set of health services, the public sector is not the most appropriate sector to do so. Some element of market power – albeit restricted – would naturally arise from organisations whose directors could be made far more subject to scrutiny and judgement of their performance than are those currently charged with stewardship of local parts of the NHS. It is not possible to replicate a true consumer culture in a large public monopoly (the present NHS) – and certainly trying to do so via a public monopoly is a fairly inefficient way to do so. As one questioner put it at the IoD policy seminar on health held in May 2000, has anybody heard of a nationalised monopoly industry becoming consumer-led? Many commentators have made similar points about the state’s inability effectively to target and respond to individual needs For example, see reference 110. Apart from any desire to make the NHS more patient-centred, the coming into effect in the UK of the European Convention on Human Rights will no doubt exert some fairly strong influences, one way or another, on the NHS.4. Despite some of the ills of the NHS, there is still much goodwill towards the nation’s health services, and neither outright privatisation nor an emphasis on health insurance is being advocated as a solution. Research by bodies such as the Institute for Public Policy Research have shown that there is still a high level of 111 support for the principles of a health service that is free at the point of delivery .To contemporary British readers, mutuality and healthcare are actually probably mostfamiliar in a funding context. Mutual insurance is one way of covering healthcarecosts. In France compulsory health insurance covers 99% of the population, althoughthe insurance only meets 74% of all health treatment expenditure, which is paid at 112the point of service . The remainder is met 13% by the patients, 5% by privateinsurers and 7% by voluntary mutual funds. Germany is but one other country where 113there are mutual non-profit sickness funds . The British Government does notfavour social insurance schemes for funding healthcare, and indeed has criticised the 114French system of mutuelles for being wasteful of resources . Nevertheless othercountries do indeed run viable health services that operate according to different 115principles and practices to those of the NHS . Thus it is disingenuous to suggest, asis done in the NHS Plan, that “The systems used by other countries do not provide a 116route to better healthcare” . Does the Government mean nowhere on Earth? AsDavid Green put it, when paying money to a mutual organisation, it means payingmoney to an organisation which is on the patient’s “side” in the system, as comparedwith paying taxes to the Treasury, which has different priorities to those of the 113patient . This point should be borne in mind when considering what follows below.“Bureaucratised committees, politicised inquiries and endless review bodies tend to beinherently conservative and unresponsive to change. Using taxpayers’ money and monopolysuppliers, modern governments and their agencies inevitably lack the information andincentives needed to respond to the subjective desires of the millions of individuals they are 110attempting to serve.” 30
  31. 31. 5.3 Overseas examples of mutual healthcare provisionThere are examples of mutually run systems elsewhere. The United Nations (UN)published a survey in 1997 on the global extent of the mutual health (and social care)sector117. Much of what follows up to and including section 5.3.6 is derived from thisUN survey.The UN Survey provided a detailed classification of mutual (or co-operative) healthand social care. The terminology used varies around the world. Thus there are“health co-operatives”, “medical co-operatives” and “joint health/medical co-operatives”, “group health associations”, “community health centres”, “group healthplans” and “health maintenance organisations (HMOs)”, for example. Note that not health (HMOs) HMOs)all HMOs (which occur in the USA) are co-operatively organised. In terms of type ofownership,ownership three broad categories of health co-operative or mutual are:(a) Those owned by users: these include fully independent self-governing users enterprises owned and directly controlled by their members. In respect of ownership they resemble the British retail consumer co-operative societies, which as far as their structure and style of operation is concerned are the descendants of a co-operative society set up in Rochdale in 1844. In the case of the health and social care entities, members are the actual or potential users of the services. Members may in some instances not only represent themselves but also relatives, households or other dependents. (This type of enterprise includes some that combine both health insurance and service provision, of which they directly deliver at least part of all healthcare services required by the members. In the USA this type of enterprise is thought of as a subcategory of HMOs – some of which are for-profit and others are not-for-profit.)(b) Those owned by individual providers: including enterprises owned and providers controlled by groups of health professionals. In this respect they resemble in structure the general class of producer or worker co-operatives, of which there are 118 currently perhaps 1200-1500 examples in the UK . The healthcare examples looked at by the UN are usually owned by doctors but sometimes by dentists, nurses or community health professionals.(c) Those owned by non co-operative enterprises which include health services enterprises: owned in common by groups of enterprises. These include self-employed doctors or independent for-profit medical practices, which may set up a joint purchasing, supply or marketing organisation. In this respect they would not be dissimilar to certain agricultural co-operatives.5.3.1 User-owned health co-operativesAt the time of the UN Survey these were known to exist, to varying degrees, in Italy Italy,Spain, Sweden,Spain Sweden the USA Canada Costa Rica Panama Argentina Bolivia Brazil USA, Canada, Rica, Panama, Argentina, Bolivia, Brazil,Israel, Senegal,Israel Senegal the United Republic of Tanzania, Zaire South Africa, India Sri Tanzania Zaire, Africa India,Lanka, Russia, Japan, Malaysia, Singapore and the Philippines. In only one of theseLanka Russia Japan Malaysia Philippinescountries had they developed to a highly advanced stage. Imagine a nation where 31
  32. 32. 67% of non-state hospital care, 50% of daycare and 20% of primary care is accountedfor by mutual organisations73. That country is the USA.5.3.2 The West: The user experience in the USACo-operatives have been involved in healthcare in the USA for over 60 years. Everyday in the USA over 200 thousand people have medical appointments with doctors atco-operative and not-for-profit HMOs119.Many HMOs have concentrated on primary care as a means of avoiding moreexpensive hospital care. According to a document prepared by the US NationalCooperative Bank, typical HMOs attract 20% more patient visits than do the fee-for-service equivalents. One of the biggest HMOs – Group Health Cooperative of PugetSound – provided services to about 480 thousand people, some 86% of whom werecovered by health insurance through their employment (one in 11 of the populationof the State of Washington). In May 1993 it was the seventh largest non-profit HMOand the 18th largest HMO of either the profit or non-profit variety in the USA. It wasestablished in 1945 and was consciously based on the principles of the originalRochdale consumer co-operative. Interestingly - because it was more or less acontemporary of the early NHS – the Group Health Cooperative purchased a hospitalwhere the doctors already considered that to capitalise on people’s illness wasunethical. The purchase was completed by relying on members’ share capital andpersonal loans, and also further capital was raised by the sale of interest-bearingbonds. One sixth of the 480 thousand “enrolees” were members, who had paid alifetime membership fee of $25. Furthermore, they elected a board of volunteertrustees. There were also three elected regional councils and 23 medical centre orlocal advisory councils, made up primarily of elected volunteers. Special interestgroups were set up from the membership to deal with consumer issues such as elderlypersons, women and with mental health. By the close of 1994 the number or enroleeshad reached 510 thousand. By 1999 it employed about 9800 people.As a co-operative it was described as consumer-controlled and as an HMO it was a consumer-controlled,scheme that provided comprehensive medical care for a fixed prepaid fee togetherwith small copayments. By way of illustrating the scale of the organisation, it was theninth largest employer in Washington State (1007 doctors and other medical staff,1533 staff nurses and 7274 other personnel). It operated two hospitals, an inpatientcentre, nursing facility, five specialty medical centres and 30 primary care (or family)medical centres, with 694 beds. The Cooperative contracted with 38 otherorganisations for health services, had a network of primary care community doctorsworking under its guidelines and arrangements with 1950 other non-staff doctors toprovide healthcare in places where there were no staff doctors or temporary staff. Italso worked with the University of Washington on patient care, research andteaching. These and other activities described in the UN Survey read like amicrocosm of the NHS; they also include long-term care, health promotion servicesand a 24-hour telephone helpline staffed by nurses (recall the present NHS Direct).By 1996 it was reported that membership of HMOs organised as co-operatives hadreached perhaps 1.5 million people. The largest physical concentration of HMOs wasto be found in Minneapolis, where nine HMOs provided coverage to 1.2 millionpeople (70% of the local population). They, like most HMOs, undertake to sell theirservices to local employers. As a result, business-sponsored purchasing coalitionsdeveloped to help broker the best deals. Companies established member-owned 32