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.

Read my statement in full »

The proposed new architecture for the NHS – Provision for NHS patients

Filed Under (Foundation Trusts, Health Policy, Reform of the NHS) by Paul on 18-06-2010

Provision for NHS patients used to mean nearly all NHS provision. This will change.

For 60 years this was organised in two distinct ways. The 1948 NHS settlement agreed that GP services would be organised through private sector small businesses called GP practices. For the most part GP services have remained organised through small private sector businesses and it is only recently that the BMA has found the introduction of private enterprise into the NHS an ideological problem.

On the other hand in 1948 hospital services, and what we now call community health services, were nationalised by Whitehall. The nation’s hospitals – up until 2004 were all owned by the Secretary of State – and the community health services had been variously run by a series of state organisations called Health Boards and latterly PCTs.

Because these important services were run by the state there needed to be a state infrastructure to performance manage and generally worry about them. This meant that these organisations could not be responsible for their actions. They learnt to look upwards to the Department of Health because the Department of Health was their landlord and owner.

Foundation Trusts 

From 2004 the creation of Foundation Trusts changed that. But as Bill Moyes and I have described in our pamphlet (Foundation Futures published by Policy Exchange in February 2010) the culture of the leadership of the NHS barely accepted the law that gave Foundation Trusts their independence. Most of the leadership of the NHS both at the DH and at SHA level were at best ambivalent about autonomous hospitals. This was because for every trust that became an FT there was one less trust that they no longer owned and controlled.

(Over the last few years on several occasions, when giving a talk to younger NHS staff, someone would say to me “Why did the DH pass the legislation then, if they didn’t want to lose control? “ And of course the answer is the DH did not pass the legislation – it was the Government 

So the growth in the number of FTs stalled, partly because of a lack of incentive for those running the NHS to lose the power they had over NHS trusts, and partly because there are a number of trusts – 25% who have management problems or are structurally unsound in terms of ever being allowed to run themselves. One of the previous Government’s biggest failures in health policy was never to create a failure regime that would force these institutions into FT status.

The new architecture post 2012

The new Government are determined to move all NHS provider trusts into FT status and will do so with three significant changes to the provider regime.

The first is to ask the new Economic Regulator (see architecture post number 3) to set up a failure regime for NHS provider regimes. In one sense this is quite simple. You need a failure regime because in the quasi market of patient choice and competition that exists at the moment in NHS provision, and especially with the plans for stronger NHS commissioners with more patient choice and competition, then  some trusts will do very well. They will increase their market share considerably.

Others will lose market share and may become unsafe as their consultants perform fewer procedures than they need to, or become uneconomical.

(Interestingly in 1996 what was then the Department for Education labelled the first school as “failing”. Since then tens of schools have been labelled as such and it has become a normal part of performance management in education to say that a school is in special measures and may need a “superhead” to run them. This means that in England’s state education system now there are 14 years of knowledge of what to do with failing schools.

For the NHS we have wasted those years because we have not had the nerve to tell the public what we really know about some of the nation’s NHS provision.  If we are to improve the 25% of trusts at the back of the performance curve then they have to know that unless they improve, something bad will happen to them.

This could mean that if you are a failing trust you lose even more autonomy for the institution. The nature of their failure shows that they are not capable of becoming autonomous NHS trust with FT status. For the moment though they seem happy not to have to stretch to that. They don’t actually want more autonomy. Therefore a part of the failure regime would be to make sure that such trusts lose their existing status.

The most radical thing to do would be for Monitor to carry out an analysis of those trusts that are not FTs and make a judgement whether the trusts will manage to become FTs in the next 3 years.

For those that have a chance we need to spend some management development resource getting them there.

The second policy development as a part of the failure regime would concern all of these trusts that Monitor felt would not stand a chance of becoming an FT over the next 3 years. For these I would create a single organisation that they would become a part of.

This might be called NHS Trust 2011-2014.

The national organisation that owned all these assets would have a single, time-limited task. Over three years since its inception NHS Trust 2011-2014 would be responsible for organising the takeover of these failing assets  Most of these would be taken over by existing NHS trusts but it may also be the case that private or third sector organisations would feel they could improve them.

The organisation would have three years to create a market in these assets and encourage those that want to run them well to enter that market. There are several people who have the skills to run NHS Trust 2011-2104 some of whom are existing FT leaders.

I think it is quite likely the Secretary of State will do both these things. But because he has set his face against the third, the whole process is unlikely to work. The Secretary of State, because of his wish to conserve hospitals, has made it much harder to radically change what they do. But it is only by radically changing what they do that many of these trusts can be made to work.

For someone to want to take them over it is essential – in old language – that they can be reconfigured as a part of the bigger, wider, new organisation. If everything in every failing hospital has to stay the same then an organisation that might have thought of taking them over would be mad to do so. So the Secretary of State has removed the one incentive that would make it worthwhile for someone to take over assets that are not working at the moment.

He, or his successor, will have to change that if they want this policy to work.

Provision of community services

The previous government anxiety about the unions helped to change their policy  towards community health services  In 2006/7 there was a lot of talk about the possibility of using the FT model to develop some community foundation trusts. There was problem of size and capacity but as it has turned out there are a number of community health organisations that are quite big and could develop into such trusts. In the same year there was a fanfare about social enterprise with the first (and still the only) management buy out by nurses in Surrey.

But over the last year there was a policy shift by the Secretary of State against the notion of creating non NHS providers, and by the Chief Executive of the NHS, who labelled creating social enterprises as nonsense because they were not part of bigger existing organisations ..

The answer to both of these problems was to roll the community health services into existing NHS provider trusts. This – under the banner of Integrated Care Organisations – developed a policy of vertical integration. My worry here is that the existing acute provider trusts would have a track record of very good hospital services and would use the community health services as an adjunct of the hospital.

It is difficult to see the existing set of service organisations surviving in the new Government’s architecture. There will need to be different modes of organising this provision that will be in competition with each other. 

Primary care (and whatever they are called, polyclinics will be the main method of delivery of primary care services).

There’s a Dudley Moore sketch in which Dud says “I could have been a judge if I had had ‘the Latin’”. In calling them “polyclinics” we were throwing a foreign – Greek – word into the normally Latinate world of the NHS. This was a big mistake. If they had been named within ’the Latin’ – say multi clinics – all would have been well.

Whatever they are called, having primary care provision organised for a population of about 80,000 with a range of primary care and some existing secondary care provision will happen. It will be a brave locality that sticks by the Greek and calls them by that name – but as Shakespeare  tells us – a polyclinic by any other name will still serve as sweet.

Many of these will be built upon existing primary care organisations but some provision will be organised by new providers.  

The independent sector (private and third sector)

I don’t think new providers will come into the market within the existing NHS forms of organisation. What NHS provision needs is new types of provision which has new organisations to provide those services. Specifically these need to be aimed at Long Term Conditions, but since I have a pamphlet coming out on this in a couple of weeks I will leave that for now.


Whilst this is a description of a market organisation of provision, what is important is the interaction between all of these providers. They will have to compete for business with each other. Some will do very well and some will not. The good ones will ensure that they are providing what the commissioners are buying; the bad ones will demand that they should be paid for providing care that commissions don’t want.

The organisation of all this is the responsibility of the Economic Regulator- the subject of my next blog.

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