Is the NHS really over-managed?

UKIP deputy leader Paul Nuttall made a fool of himself on Question Time last week when he said that the NHS had two managers for every nurse. His claim has already been taken apart by Full Fact who produced this graph based on recent NHS workforce statistics.

Even if you add together all the managers and administrative staff, that’s still only 12 percent of the workforce. And if anyone wants to argue that hospital receptionists are not in frontline roles, I suggest they try being one for a day.

Of course, those of us who are familiar with crunching and analysing HR data know that raw figures rarely tell the whole story. The commentary on these statistics tells us that they are taken from the NHS’s Electronic Staff Records system. They therefore exclude temporary bank staff (many of whom are nurses), some trainee doctors and GPs and their staff, who work for separate organisations.

It’s also very difficult to pin down a number for NHS managers, as the King’s Fund said in its report in 2011.

Measuring the level of administration and management in the NHS is immensely difficult. The NHS has a plethora of statistics about managers, management
and administration, but little information that can be easily analysed about
who they are, what they do, and what their impact is. Any attempt to do that is compounded by inexact definitions that change over time.

The picture is complicated further by the number of qualified doctors and nurses in management positions or who have some management responsibility. However, the Kings Fund applied the ONS definitions of management to the NHS workforce and came to a figure of 4.8 percent. This is slightly higher than the official NHS number (just over 3 percent) but much lower than the ONS estimate of managers in the UK workforce – 15.4 percent.

In other words, the NHS has a managerial workforce a mere one-third the size of that across the economy as a whole (ONS 2010). If anything, that points to the conclusion that the NHS, particularly given the complexity of health care, is under- rather than over-managed.

The NHS in England is a £100 billion-a-year-plus business. It sees 1 million patients every 36 hours, spending nearly £2 billion a week. Aside from the banks, the only companies with a larger turnover in the FTSE 100 are the two global oil giants Shell and BP. If it were a country it would be around the thirtieth largest in the world. It might just as sensibly be asked, how can it be run effectively with only 45,000 managers.

Graeme Currie of Warwick Business School made a similar argument a couple of months ago. His research found that taking middle managers out of the NHS has led to “breaks in the information chain between day-to-day clinical practice and management structures”.

This is partly because the NHS still doesn’t properly understand and appreciate the knowledge-brokering power of what our research describes as “hybrid middle managers”. These managers may have different professional backgrounds, are located at different levels of an organisation and carry varying degrees of responsibility. What they all have in common, though, is the ability to act as a two-way mirror; capable not just of assimilating top-down management knowledge but also of translating and transmitting ideas belonging to clinical practice back up into their organisation.

In other words, the rush to take the despised middle managers out of the system may have removed some of the oil that made it run smoothly.

A study by the Chartered Management Institute published in December found that NHS investment in management development was 25 percent lower than the average across all sectors. Middle managers, it reported, were particularly missing out and showed the highest levels of disengagement among managerial staff.

I’m reminded of the comments former NHS Trust Chief Executive Lucy Moore made after joining Deloitte:

Part of the problem is that NHS doesn’t operate its leadership development at scale and never has done. It’s noticeable in my time in consulting that firms such as Deloitte invest in leadership development in a different way – operating their graduate entry as part of a much bigger leadership scheme.

The NHS Management Training Scheme is fantastic. But it is small scale, and there is nothing else really. We describe it as a National Health Service, but as far as that sort of leadership training and succession planning is concerned, it’s not at all. I’ve been very struck by that in my new life, where that is taken much more seriously.

An interesting contrast. In the commercial firm, management training is seen as an investment. There is no way a organisations like Deloitte would scrimp on training people like Lucy Moore. They are worth far too much to firm.

The World Management Survey (see previous post) has researched the impact of management on health systems across the world. The slide pack from August 2011 provides a good summary. (It’s worth reading to the end for the quotes.) The researchers found that doing a few simple things well, like setting objectives and managing performance, improved both clinical and financial performance.

In an earlier report, the researchers noted that, although the UK’s spending on healthcare is relatively low, its managers still performed well.

Perhaps more surprising is that when we compare these management scores against per-capita healthcare spending by country (Exhibit 6), the United Kingdom appears to deliver strong management outcomes.

So despite low levels of investment in management, the relative performance of British healthcare managers is still pretty good. That suggests that, far from being the deadweight burden some would have us believe, NHS managers are going a lot of good things on a very tight budget.

Under the Coalition, the number of NHS managers has been cut significantly. Some of this is due to the abolition of the Strategic Health Authorities, which, although it removes a layer of management, puts more pressure on managers elsewhere.

As if that isn’t enough, there is constant pressure to report externally. As the King’s Fund’s concluded, the NHS is under-managed but over-administered:

There is appreciable evidence that the NHS is over-administered as a result of extensive, overlapping and duplicating demands from both regulators and performance managers. There has not been a substantive review of the information demands placed on the service and its providers for many years. A review leading to a rationalisation of those demands is essential.

In other words, the targets and monitoring are coming from outside, rather than being set by local managers. The Warwick research found something similar:

First, our research has identified a real tension between patient safety knowledge that is pushed into healthcare organisations by outside stakeholders, and knowledge that is generated as a result of frontline clinical experience. Many healthcare organisations end up designing their systems around the requirement to report outwards to commissioners and regulators; yet these systems are not effective for facilitating the transfer of patient safety knowledge to and from the clinical frontline. They also mean that hybrid middle managers with designated roles for patient safety are becoming increasingly management-oriented as pressure mounts to demonstrate compliance to external bodies.

Every time there is a healthcare story in the press, another set of targets and reporting requirements appears. Recently, a committee of MPs, responding to the Stafford hospital scandal, said that hospitals should report on the number of nurses on duty each day. There’s another administrative task that will achieve…well…what, exactly?

Actually, while we’re about it, what about these headcount figures? The NHS admits they are not comprehensive. Someone should go round and add in all the missing trainees and GP staff. They should add up all the hours worked by the relief bank staff across the country and turn it into an FTE figure. Then we’d have a proper, accurate and transparent (it’s got to be transparent) figure on the true manpower level of the NHS. That would keep a few people busy for a while and tell us absolutely nothing. OK, I’m being facetious, but I wouldn’t be at all surprised if someone suggested this.

There is evidence that these constant demands for reporting on arbitrary catch-all targets are hindering, rather than helping, the running of the NHS. While managers are worrying about what the Daily Mail will make of their trust’s performance, they are spending less time doing all the useful management work that makes such a difference to the way an organisation is run.

Is the government going too far in cutting the number of NHS managers? Dr Stephen Black, of PA consulting, certainly thinks so:

The NHS target for management cost, about 0.6 to 0.8 per cent of the £70 billion GP Commissioner budget, is not only ambitious but off the scale. Only the most extraordinarily frugal charities spend less than 1 per cent on management and administration.

Highly rated charities spend 4 to 8 per cent and some well-regarded medical charities spend more than 10 per cent. The American Red Cross spends 4.5 per cent, the American Cancer Society 7 per cent, Scripps Research Institute 5 per cent and the Mayo Clinic spends more than 12 per cent.
While their activity is not entirely comparable with Britain, they still provide evidence that if central targets for management costs are imposed on the NHS, there is a risk that commissioners will be crippled before they start.

Without good managers, the NHS hasn’t a hope of making the improvements in quality and efficiency it desperately needs. Someone has to lead and co-ordinate these efforts. Cutting management to the bone will destroy the NHS’s capability to make these improvements stick. The idea that the NHS can run without good managers is just cravan populist nonsense. Every time a politician or journalist, with a poor grasp of the numbers and even less understanding of the overall picture, takes to the airwaves to rant about NHS managers, it makes the problem that bit worse.