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Administrators, in the NHS and in the real world

Filed Under (Hospital Trusts) by Paul on 21-01-2013

Over the last few months I have been bemused at how the politics of the NHS have tried to grapple with the report of the administrator sent in to deal with the failure of South London Health Care. It seems to me that the Government have positioned the role of the administrator entirely incorrectly.

This was brought into sharp relief by last Tuesday’s announcement that an administrator had been sent into deal with the failure of HMV. Look at the press and media comment on the role of this administrator.

The Today programme seemed genuinely sad for the thousands of people who were going to lose their jobs. There was much historical comment about the bad decisions made by HMV in relation to the internet – both as a method of recording and selling music. People felt sad that a once great organisation had, through making a number of strategic errors, failed.

The business pages went further. They said that there were important lessons here for other big firms. Don’t be complacent. Recognise that if you don’t keep up you have no God-given right to be the supplier from whom people will buy music. Make sure that you scan the horizon every day for new ideas that can provide more and more value to your customers.

It all adds up to sadness at the loss of a brand.

Sadness at the loss of all those livelihoods.

Sadness that a big institution could somehow not keep up.

Even sadness for the children who were given HMV vouchers at Xmas that are now worthless.

That’s what failure is.

And what might the administrators do? Well they might find some buyers for some stores. They might find some buyers for some parts of the sales business. They might be able, by breaking up the whole enterprise, to keep some jobs. It will take inventiveness and imagination. But the administrator’s job is, given the fact that HMV has failed, to retrieve value from the break up.

That’s what administrators do.

No-one believes that in a few weeks time HMV will be back again – doing what it did before.

Compare this to our understanding of what the administrator has achieved in South London Health Care. Here, throughout the national and local media, it is the administrator that is in some way seen as the cause of the problem for the Trust.

It’s as if things were fine before he came in with his report. Now he wants to bring about all these changes because – well because he is that sort of person. And what everyone has to do now is find some way to stop him from doing what he wants to do.

No one seems to notice that he was sent in because the Trust was failing. The trust could only pay the wages of the staff by taking £1.3 million a week from other patients in the London NHS.

The failure of the trust was already based upon several years of twisting and turning to try and stop that real experience of failure being visible.

Therefore when someone is sent in post-failure to sort it out – as administrators everywhere else do – he is not seen as performing the role of an administrator but as yet another chance to keep a failed trust going.

So what is actually a post-failure intervention has once more been transformed by inadequate explanation and portrayed to the public as being a pre-failure intervention.

What the HMV administrator has to do is search around for other organisations that can ensure that value is obtained from the remnants of a failed organisation.

The same is true of an NHS trust administrator. It is because the administrator is an inventive man that parts of the trust can be taken over and can deliver safer sustainable services. Therefore despite failure, and providing other organisations will come in and help by taking over, some important services can be saved.

But the trust, like HMV, has failed.


10 Responses to “Administrators, in the NHS and in the real world”

  1. Yes but the HMV administrator does not conclude that parts of HMV could be saved if other retailers with stores nearby could be closed.

  2. That’s a very useful comparison, although Nigel’s point is a good one. Because the NHS is a complex system rather than a single organisation, failures in one part of the system inevitably have a knock-on effect on other parts. What the TSA has had to do is never going to win favour – no one likes change and the prospect of closing an A&E which has only just been refurbished is unpalatable to many. For my part, I think the Lewisham proposal is flawed – it may make sound logistical and economic sense but it does not make sense for patients. It is also a tactical error, politically but, as Lewisham is a pretty solid Labour area, it’s likely to fall firmly into LaLite’s “don’t care” file.

    On the other hand, proposals around transformation of primary and community care, and integrated services, make very good sense. What may let the whole thing down is a lack of creative thinking around use of technology and risk-averse IG leads frightened of the ‘cloud’.

  3. The trouble with the analogy is that the administrator for HMV hasn’t got the power to make Amazon or Play buy up the company and then close down their website.

    Whereas the recommendations being made by the TSA are that a perfectly viable trust (Lewisham hospital) close well regarded services (A&E) and put others (maternity) at risk.

  4. But what you fail to mention Paul is that Lewisham Hospital isn’t the culprit in this and ian’t even in the same trust area. It is being made a scapegoat. And coincidentally its land is worth an awful lot more than the one costing us all a fortune. See you on the march on Saturday?

  5. While I agree the Government has not thought through the communications and politics of the failure regime, the analogy with HMV breaks down at several levels.

    First, HMV lost its customers to other providers that could do it cheaper and more conveniently than it could. The equivalent would be S London losing its patients to primary and community care- which clearly hasn’t happened and patient still expect to be seen in their local hospital.

    Second, Mathew Kershaw’s solution involves a central government subsidy to the PFI of about £25m a year for 30 years. A bit like the HMV administrator saying we have expensive and unsuitable shops, but can the taxpayer please fork out for the leases please.

    Third, as Nigel pointed out, the solution to failure in one organisation is to penalise the successful Lewisham Hospital. Where is the equity in that?

    So this ends up looking to the public as another management driven reconfiguration which the Secretary of State should prevent.

    And the HSJ reports the NHS setting aside £300m to repeat the process in other Trusts?

  6. The fallacy of the frankly facile and patronizing analogy with HMV has been already pointed at by the other commenters, but I agree with you on the final point that the Administrator is an inventive man, his plan is in fact based on inventions.

    What a creative man. What a creative plan. Why be bound to real data when you can just invent!
    From the clinical data to the supposed savings, all invented.

  7. For those who think the TSA got it wrong in South London, I am not hearing alternative solutions. The status quo doesn’t work – it has failed. There is no more money, it is part of wider health system and it must take into account clinical standards and access. Go figure!

  8. Maybe you’ve not been listening.
    A few points:

    – It has been pointed out that the implementation of the closures at Lewisham would have a negligible impact on the projected savings package (1%) whilst bringing in enormous upfront costs.

    – the TSA data about demand and transports are completely unreal, which means that even if the proposal was implemented it would eventually bring in enormous extra costs in some other form, and quite possibly a further reconfiguration.

    – the TSA proposal safeguards the NHS counterparts in the PFI deals. Now we’re just paying for a bad deal, after the implementation we’d be still paying, only that we’d be paying for nothing at all. An alternative would be to scrap the inefficient PFI deals, it only takes political will. They’ve done it in Germany and the world hasn’t stopped. Who cares if Barclays loses a contract.

  9. Perhaps if I were given the resources that were afforded the TSA and took a few months off work I’d come back with an alternative plan. I’ll be marching down Lewisham High Street, hopefully with one or two other people, on Saturday in an attempt to get the Secretary of State to give himself the option of doing that, or failing that to find someone even better qualified to have a go.

  10. […] Last week I drew the analogy between the role of the administrator in the NHS and the fact that someone with the same name – administrator – winds up High Street retail chains like HMV. The point I was trying to make was that the announcement of an administrator for HMV was recognised as being the end of the line for the current organisation of a failed chain of stores. However when an administrator  was announced for South London Healthcare Trust it was seen as another opportunity to develop the trust with the minimal amount of change. […]

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