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.