The NHS – still on track for that train crash

The government has revised its NHS reforms after accepting most of the recommendations from the NHS Future Forum. There is plenty of commentary on the detail of the changes (summarised here), most of it by people far better qualified to understand it than I am. The general feeling seems to be one of cautious welcome.

“The NHS is breathing a huge sigh of relief,” says the Guardian’s Denis Campbell. Perhaps it is but the organisational pitfalls in the government’s proposals are still there. The most dangerous aspect of the strategy, the the attempt to combine far-reaching structural changes with 4 percent annual efficiency savings, hasn’t changed.

A couple of days ago, I came across this piece written for the right-of-centre think-tank Civitas by Sir David Varney. Sir David is a seasoned corporate troubleshooter who served as an NHS trust chairman. He knows about turning organisations round and just how difficult it will be to do the same for the NHS. As he says, “almost any change programme is likely to look modest alongside the scale and scope of that currently proposed for the NHS.”

His article was written in January (How the hell did I miss it then?) but none of the risks he identifies in the White Paper have been addressed by the recent changes. It’s worth reading the whole thing but his conclusion is that, for these plans to succeed, the NHS will have to outperform its own record, and that of most private sector organisations, for restructures, mergers, behavioural/cultural change and efficiency savings. All at the same time.

Given that the NHS hasn’t been good at any of these things in the past, that looks very unlikely.

There are few examples of organisations anywhere that have made 4 percent annual savings while creating completely new structures and giving responsibilities to those who have never had it before. If there are any, I would be surprised if, at the same time, they made significant behavioural and cultural changes, merged major business units and sacked many of their managers, all while maintaining their levels of customer service. In short, no organisation has ever successfully made such far-reaching changes in such a short time and few have been crazy enough to attempt it.  It’s not even a textbook example of how to fail at organisational change; no business academic would imagine anything quite so cavalier.

The proposed changes will be expensive and disruptive. They will almost certainly increase the cost and reduce the performance of the NHS for the next few years. As the FT’s Nicholas Timmins warns:

What is still missing is a narrative that explains how these changes, carried out in this way at this time, will help the NHS to address its immediate central task – making £20bn of efficiency savings over the next four years to meet rising demand within a budget that is flat in real terms.

Instead, the opposite is more likely. The huge organisational upheaval required and the need for everyone in sight to be consulted before services are reshaped will see parts of the NHS lose control of spending.

By 2013 or 2014, the NHS is likely to be back in a big financial crisis that will inevitably affect performance – just before the next general election.

The revisions to the government’s NHS proposals may have pleased some people but, even in a watered down form, their impact on the health service is likely to be much the same. The massive restructure will kill off all hope of making productivity improvements.

The really bonkers part of the whole plan is attempting the biggest ever organisational change in the history of the NHS at the same time as the biggest ever cost saving in the history of the NHS. This, as a trust chief executive warned last year, puts the health service on course for a train crash. Even after the changes announced yesterday, the NHS is still heading for that crash. It’s due sometime around 2014.

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6 Responses to The NHS – still on track for that train crash

  1. Pingback: The NHS – still on track for that train crash - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Prateek Buch says:

    A crucial post, making a vital point on. Many of us (hands up, I’m one of them) have had our heads down and focussed on the details of what was in the Health and Social Care Bill. In itself that’s fine, as the Bill was a terrible mess which needed to be made less terrible – I’m fairly confident that’s been achieved, although the final details are yet to emerge and there may still be some cause for concern.

    What’s been lost somewhat in the debate is the madness of bringing about such dramatic change, regardless of its merit, at a time of serious financial constraint – Lib Dem MP John Pugh likened it to turning around an oil tanker whilst simultaneously dismantling the steering mechanism.

    The opportunity cost of these reforms cannot be underestimated – and unlike reforms to other services, great care needs to be taken when dealing with the NHS – for some it can literally be a matter of life and death.

    In terms of the rising costs and the train crash to come, I’d suggest that too much attention has been focussed on the ‘supply side’ (reforms to provision and commissioning) and not enough on the ‘demand side’ (healthier people use healthcare services less so reducing utilisation is just as important but has been largely ignored) – but then what else would one expect from Tories?🙂

  3. John Munro says:

    I agree with this statement, If the private sector would never change like this why should the public sector be expected to. It is terrible policy and needs stopping still until the budgets are under control.

    Have your say on this and other matters at Digitaldemocracy.org.uk

  4. Jez says:

    As you say, this is the biggest change programme the NHS has ever seen – so does that make it the biggest organisational change programme EVER? Given that the NHS is the world’s third largest employer (after the Chinese army and India railways), it must be a candidate for the title.

  5. It’s worse than even that. The bill does not acknowledge the reasons for healthcare inflation, including the effect of making healthcare a commodity, nor propose reforms (urgently needed in every country) to deal with them. Secondly it does not address the enormous additional admin (billing, marketing etc.) and regulatory costs associated with converting running complex healthcare markets. The consequence is going to be less healthcare and more bureaucracy. Pundits may be cautiously welcoming, but those of us who actually work in the NHS and depend on it for care are still deeply concerned.

  6. Jim McManus says:

    This would be the Sir David Varney who lasted six months in his only role as an NHS Chair, I assume?

    I’m not dismissing his experience or insight elsewhere, but the fact he lasted six months in his only NHS Chair role, in a trust for which the word “troubled” might have been invented somewhat limits his reforming leadership credentials.

    http://www.guardian.co.uk/society/2010/jul/14/david-varney-barking-havering-redbridge-nhs-trust

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