My mission statement

The times we are working in now need a great deal of accelerated change and there must be no negotiating that down. So my mission statement for this part of my consultancy career is to be clear that there needs to be and will be a lot of change from the work that I do with individuals and organisations and if organisations don’t want that, then it is probably best to go somewhere else.

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How the policy of making it harder for hospitals to change today messes up the policy of improving the economics of the NHS of tomorrow

Filed Under (Conservative party, Creating public value, Foundation Trusts, Health Policy, Incentives, Reform of the NHS, Secretary of State) by Paul on 26-05-2010

Most of the policy announcements made by the new Secretary of State have so far been made in front of hospitals that he is either ‘saving ‘or ‘reopening’. I have written on another web site how the preservation of hospitals “in aspic” represents one part of our society that the modern Conservative Party wants to “hold still” but why, given the amount of change they are pouring into the NHS system through the use of markets, this wish will probably fail.

But, as in the 1980s and 1990s, the contradiction inherent in modern Conservatism’s thrill for the revolution of markets and its love of conserving things from the change that those markets inevitably cause, will have to work its way through in their health policy.

As always my money is on the market – as the bigger of these two drivers. So within a few years there will be thousands of puzzled Conservatives, who will have taken the word “conserve” seriously, left gazing at the rubble of the institutions felled by the strong market forces that their own party will have unleashed.
One significant part of that contradiction concerns the value that could be placed on hospitals by those who may in the future be expected to take them over. As a part of the pre-election policy discussions there was a recognition that some of the better hospitals – in the public sector the best Foundation Trusts, but also in the private sector private hospital suppliers or property companies – would be expected to help improve some of the worst hospitals by taking them over.

In many other parts of our society – including increasingly schools – the best organisations taking over the worst and getting them up to scratch through the management of change, has become a normal way of creating improvement.

For some years there has been some discussion in the hospital sector of how and why Foundation Trusts can be persuaded to take over some of the worst hospitals and improve them. By the end of the year this will become a significant plank in the improvement policy of the new Government. During the late summer they will be engaged in real conversations with our best Foundation Trusts about how they need to step in and take over hospital x to bring about improvement.

But their Conservative policy of keeping hospitals as they are will have undermined the Conservative policy that expects the best of hospitals to take over the worst.

How come?

If you are running a good Foundation Trust why should you take over a trust that is failing? What is the incentive to take your eye off the ball of your own trust, and get involved with one that is, by definition, in trouble?

Why risk it?

The incentive for good organisations to take over bad is that the good organisations, by better management and by the combination of work streams of the two organisations, can create more value together than the two organisations separately.

So those organisations on the look out to take over others are looking for organisations that contain within them a lot of latent value that could, with the right sort of change management, be realised. The organisation potentially taking over can see within the failing organisation value that the existing organisation cannot realise and they know that with the right sort of change management the organisation taking over can find that value.

That’s why this is so often a mystery for the staff and the managers of the organisation that is being taken over. There they are working very hard – harder than they have ever done before – and they are losing £1 million a week. Someone comes along, takes them over, turns them inside out, and the books balance. How do they do that?

Well they do it by change – very often radical and prolonged change.

So the incentive for a good FT in taking over a failing hospital is that they know that through radical change they can make a success out of it.

But unfortunately outside the gates of Barnet and Chase Farm on May 21st 2010 the Secretary of State devalued all of the possible value contained in failing hospitals by making it almost impossible for them to be changed.

OK – if every GP, every local authority and, as far as I can see all the local Conservative branches, agrees that there will be change then you can realise the latent value in the failing hospital.

But that’s not likely.

So what the Secretary of State has offered prospective FTs to seduce them into taking over failing hospitals is a two year process of public and political turmoil during which they will still be losing £1 million a week; when your reputation for running a good hospital will be under attack by everyone in your locality; and when the end result – if you have a local; Conservative MP against you, will be the Secretary of State finding against you.

There will be no takers.

The Secretary of State that wants to preserve the national hospitals as they are has just undermined the Secretary of State who wants to incentivise good FTs to take over failing hospitals.

One of them will have to go.

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