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Kieran Walshe | Capitalising on opportunities for hospital reform
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Kieran Walshe | Capitalising on opportunities for hospital reform

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Professor Kieran Walshe, from the Centre for Public Policy and Management at Manchester Business School in the UK, addressed the HARC network in April 2008 about how analysis of public service ...

Professor Kieran Walshe, from the Centre for Public Policy and Management at Manchester Business School in the UK, addressed the HARC network in April 2008 about how analysis of public service failures can help organisations learn and improve their performance.

HARC stands for the Hospital Alliance for Research Collaboration. HARC is a collaborative network of researchers, health managers, clinicians and policy makers based in NSW, Australia managed by the Sax Institute.

HARC Forums bring members of the HARC network together to discuss the latest research and analysis about important issues facing our hospitals.

For more information visit saxinstitute.org.au.

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Kieran Walshe | Capitalising on opportunities for hospital reform Kieran Walshe | Capitalising on opportunities for hospital reform Presentation Transcript

  • Centre for Public Policy and Management HARC Forum – 1 April 2008 Turnaround in healthcare organisations: lessons from research Kieran Walshe Professor of Health Policy and Management Manchester Business School, UK kieran.walshe@mbs.ac.ukCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Overview • What’s the problem? • What goes wrong and why? • Dealing with failing organisations • Approaches to turnaround • ConclusionsCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Public service failures are not rare and are often very costly – in financial and human terms • Child Support Agency • Home Office Immigration and Nationality Department • Rural Payments Agency • NHS University • North Bristol NHS Trust • Kent and Canterbury HospitalCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management So what goes wrong? • Financial failures – North Bristol NHS Trust – ran up £44.3 million overspend in one year • Governance/ethical failures – NHS University – spent £50 million in brief life, lost confidence of all its key stakeholders, wound up • Clinical/performance failures – Maidstone and Tunbridge Wells NHS Trust – saw two uncontrolled outbreaks of C difficile in 2005 and 2006 with 500+ patients infected and 60 deathsCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management North Bristol NHS Trust: financial crisis in 2002/03 • Ended 2001/02 with £966k deficit on turnover of about £250m • Board told balanced budget at start of financial year (April) • SHA concerned as year progressed and called in auditors who in month 9 (Dec) predicted £11.6m deficit • Board reports in month 11 (February) restated £11.6m deficit, but in March Board told it was up to £15.1m; • SHA told privately in March it could be as much as £25m • Actual outturn for 2002/03 deficit of £44.3m on turnover of c£300mCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management North Bristol NHS Trust: financial crisis in 2002/03 • £10.2m nurse staffing (agency/bank) • £10.2m cost improvements not realised • £9.5m excess costs of achieving waiting list targets • £7.3m other directorates (not nursing) overspend • £3.6m contract overperformance • £3.5m unrealised income targetsCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management North Bristol NHS Trust finances 2002/03Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Maidstone and Tunbridge Wells NHS Trust – outbreak of Clostridium difficile in 2005/06 • Two outbreaks of C difficile in October 2005 and April 2006, affecting over 500 patients and resulting in at least 60 deaths in that period (more before and since) • First outbreak unrecognised; second reported and managed more effectively • Took 4 months to establish an isolation unit for nursing patients with C difficile – many patients nursed on open wards, not even in single rooms • Patients with C difficile not cared for adequately – lapses in antibiotic therapy and complication monitoringCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Maidstone and Tunbridge Wells NHS Trust – outbreak of Clostridium difficile in 2005/06 • Poor nursing care – call bells not answered; patients left in wet/soiled sheets; wards, equipment and bathrooms not cleaned; “escalation areas” used inappropriately for inpatient care • Poor response caused partly by pressure on beds (90%+ occupancy) and trust’s desire to meet waiting list targets • Inadequate director of infection control and CoI team, CoI policies absent or out of date, CoI training sporadic • Board oversight lacking – “appeared to be insulated from the realities and problems on the general ward”Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Some key questions • Why do organisations decline and fail? Is it inevitable (or even desirable) that some are going to go to the wall? • Can we predict and even prevent performance decline? What causes it? • When failures occur – how are they best managed? • What strategies are there for performance turnaround and do they work?Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management What do we know? • Lots of research on failure/turnaround in the for-profit sector – some transferable ideas and findings • Inquiries and investigations into failures – no shortage of case studies and recommendations for change • Growing body of research into failure and turnaround in health, local government, schools, and other parts of the public sectorCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Failure and turnaround: a simple model Performance decline Failure crisis Turnaround process Improved performanceCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Performance decline Normal variation or failure? HighPerformance Low Combining the strengths of UMIST and Time The Victoria University of Manchester
  • Centre for Public Policy and Management Performance decline High ReportedPerformance Actual Low Combining the strengths of UMIST and Time The Victoria University of Manchester
  • Centre for Public Policy and Management Recognising performance decline • Performance is naturally cyclical • Need for a range of “hard” and “soft” indicators of performance • Overall level may be less important than rate of change and trajectory • Performance decline is relative, not absolute • Differentiating “normal variation” and “incipient failure” • True performance may be masked in reported performanceCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Hard indicators of performance • Is the organisation achieving key performance targets and maintaining financial balance? • What is the level of complaints? How many of these are serious, enduring complaints, and how well are they resolved? • What is the level and severity of patient safety incidents? • What do the findings from audit projects at a clinical and organisational level show? Are they acted upon? • What are the results from external reviews such as Healthcare Commission, national staff surveys, national patient surveys, national audit programmes, external audit, etc? • Are there reviews into specific incidents underway e.g. special investigations? • What is the level of staff turnover? Are there problems in relation to recruitment and retention of staff?Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Soft indicators of performance • How well does the organisation make use of available data? • How does the organisation respond to signs of decline - what is the level of internal challenge and debate? • Is the organisation ‘in touch’ with what is happening, both internally and externally? • How likely is the organisation to be distracted by other major initiatives, changes or problems? • How is potential for innovation, creativity and learning used? • How good are clinical-managerial relationships in the organisation? • How is staff morale? • What is the quality of external relationships? • What are relationships and reputation with the local media like?Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Health community views of five SHAs A B C D E All 9 8 7 6 5 4 m g t ry s n e m k ce gt in m ln yl io fw to ov fm an ak st co re at is at pr m ov n h/ ad /h er al tr er im xt n n P n S ith Le ov er io In te ap w is xt G onCombining the strengths of UMIST and C ec E elThe Victoria University of Manchester C R D
  • Centre for Public Policy and Management Health community views of five SHAs Perf mgt Cap imp Strat fwk Context Lead style Rel wt comm Decision Ext reln Innov Govern 80 70 60 50 40 30 20 10 0Combining the strengths of UMIST andThe Victoria University of Manchester A B C D E
  • Centre for Public Policy and Management Health community views: SHA D • “It does not deal effectively with difficult strategic issues” • “As you can tell I am unimpressed. … the SHA has been of little help. We suffer from a failure of joint commissioning by our PCTs and the SHA has shirked its responsibility to make them collaborate. As a result clinical services are suffering. The SHA will teach Pontius Pilate a thing or two about not getting too involved. General style is remote and high handed” • “SHA veers from a very hands off approach to a very interventionist approach with nothing in between and no agreed strategy. Sometime the SHA deals with individual organisations and sometimes with health economy - there is no logic to this” • “The SHA is reluctant to work with other than (a) a complete "hands off" or (b) directive intervention too late mode. It needs to develop more effective participating modes to really work with local Trusts/systems”Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management The causes of performance decline and failure • Markers, symptoms or warning signs – Poor relationships, financial deficits, targets missed, • Secondary causes – Lack of controls, weak strategy, poor leadership – Increased competition, innovations, policy changes • Primary causes – Organisational culture and attitudes – Introspection, arrogance, myopia, trauma – Failure to learn, adapt, change appropriatelyCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Crisis and declaration of failure • External assessment/review – by key stakeholders – Report from Audit Commission or Healthcare Commission, publication of performance data, • An egregious event – disasters and major failures – High profile patient safety incident, major complaint investigation, whistleblower, scandal • Change of perspective – New chief executive or senior management team, new governance, new partners/views in public serviceCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Performance decline High Self regulating response to declinePerformance Low Failing response to decline Combining the strengths of UMIST and Time The Victoria University of Manchester
  • Centre for Public Policy and Management The response to failure • Multifactorial, multidimensional symptoms/causes which are interrelated and interact • The self-regulating response to decline – Recognition, willingness to change, open about problems/data, internal capacity to tackle problems • The failing response to decline – Fallacy of success, fortress mentality, retrospective view, hide the data, no internal capacity to actCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Approaches to turnaround • Range of actors – Government departments – Regulators, inspectors and oversight agencies – Other, neighbouring public organisations – New boards/management teams – Management consultancies • Three basic – and complentary - strategies – Replacement, retrenchment and renewalCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Replacement • Serves both a functional and a symbolic/political purpose with stakeholders • Deals with responsibility for failure and allows the organisation to draw a line and move on • Brings in necessary new skills and expertise – but risk of losing key experience, knowledge and understanding – flight of talent • Who gets replaced – the organisation’s leadership? • May be necessary, but not a sufficient response – and what happens if the new team fails too?Combining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Retrenchment • Addressing most important performance issues and bringing them under control as soon as possible • Mechanistic, process-focused, operational changes to structures and systems • Financial control, achievement of key activity targets, tightened monitoring and management • Short term, stemming losses and halting decline – focus on symptoms and secondary causes of failureCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Renewal • Establishing new vision and purpose for the organisation – redefining its mission • Developing clear future long term strategy for return to growth and future success • Changing organisational culture, attitudes and behaviour, focusing on organisational development • Long-term, fundamental, focused on primary causes of failureCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Does turnaround work? • Not all turnarounds work - reasons for failed turnarounds and permanently failing organisations • Timescale for turnaround and likelihood of successful turnaround variable but can be long • Added value and impact of external intervention: what would have happened without it? • Embedding renewal – avoiding a return to failure when intervention/support is removedCombining the strengths of UMIST andThe Victoria University of Manchester
  • Centre for Public Policy and Management Conclusions • Public service failures are important – functionally and symbolically, as part of a wider political narrative • We can do more to understand, predict and engage with (?prevent) performance decline and failure • There is growing expertise and experience with approaches to turnaround which seem to “work”, but its neither simple nor quick • It may be helpful to see failure and turnaround in terms of organisational capacities to learn, or to use information to improve performanceCombining the strengths of UMIST andThe Victoria University of Manchester