Health and Social Care Leadership, Organisational Design

Where does the future of the NHS lie – competition or collaboration?

Ever since the first purchaser/ provider split in the 1990s, patients and the NHS have been told that competition is the best way to drive up quality.  This has led to different systems over the years such as payment by results (the tariff based funding system) that have created incentives resulting in providers often competing with each other to provide patient care. All with the aim of driving up quality to attract more patients.  So far, so logical.

These principles worked to a degree when the problem was long waiting times (although arguably to the detriment of those services still on block contracts such as mental health and community); however the problem has changed.

Today demand has increased due to the advances in modern healthcare helping people live longer and survive premature birth and severe illness where previously this was sadly not the case.  This is at a time when social care has seen unprecedented reductions in funding, with 900,000 fewer people in receipt of social care than 2010 coupled with funding in the NHS not keeping pace with demand.

Patients have more complex needs due to chronic long term conditions and co-morbidity and so the logical solution can no longer be applied.  A more sophisticated funding mechanism that can cope with complexity is required.

In today’s world it is clear the pseudo-market economy logic and mechanism no longer works.  It’s yesterday’s solution.  Too often patients fall through the cracks of bureaucratic systems; clinicians are forced to find workarounds every day and managers are trying to make a square peg fit into a round hole so to balance the triumvirate of finance; quality and safety.

Another policy to cement competition was the creation of businesses or Foundation Trusts.  When this idea was first conceived in around 2004, the aim was to establish them as public benefit corporations.  Although a great idea in principle, Foundation Trusts ended up becoming legal business entities meaning that not only did they fall under the Enterprises Act 2002 and become subject to competition law but legally the first duty of the Board is to the organisation.  Great for competition, potentially not so great for creating a cohesive health and care system.

It is feasible that if health and care organisations had a first duty to their population, as a public benefit corporation suggests, then collaboration would not only be far simpler, but absolutely essential to deliver the right level of care to the population served.

All in all, it seems the competitive approach has served its purpose and now we need to move to a new world which sews back together fraying seams and in some cases, great gaping holes of the health and care system.  The needle we need to use is collaboration.

Sustainability and Transformation Plans (STPs) are going some way to address this conundrum and could start to pave the way for much greater collaboration if the incentives are aligned and executives are not forced to put their own organisations before the benefit of the wider STP.  It is crucial that the STPs give the proper time and attention to building the relationships and designing the clinical models that will become the bedrock of the new health and care system.  Tempting as it is, rushing into a new organisational form before this work has been thought through could actually worsen the situation.

In a previous blog post in 2015 I explored whether or not organisational form was seen as the silver bullet for the NHS.  It is dangerous to underestimate the impact of a restructure as often an organisation’s value is found in the informal structures created through internal relationships, shared history and the stories that are retold within the organisation, rather than the formal structures.  The risk becomes that in creating something new, the value is unwittingly destroyed.

Form follows function and therefore it is crucial to spend time creating shared purpose, building partnerships and strong relationships both at the top of organisations and also through bringing clinical teams together to ensure the clinical models are right.  The final step is to design the right organisational form to wrap around these new arrangements to cement in the new ways of working.  In this way we will find new organisational forms that are better able to solve the complex issues emerging today.

In order to ensure the NHS can not only survive this decade but thrive in the next decade of its existence, we need to find a way to manage the complexity in which we find ourselves in.  The only way to do this is through seeing the system as a whole and starting to form the relationships we need to design not only new ways of delivering care supported by new structures that make it easy to do the right thing, but most importantly, we need to find new ways of being so we can change things for the better.

As the old African proverb says; if you want to go fast, go alone. If you want to go far, go together.
Guy’s & St Thomas’ partnership statute outside St Thomas’ hospital 


About the author
Sarah Morgan is the Director of Organisational Development and the Programme Director for the Acute Care Collaboration Vanguard Programme (developing one of the first hospital Groups in the NHS) for Guy’s and St Thomas’ NHS Foundation Trust.

Sarah was previously the Head of the Dalton Review which examined organisational form options for providers in the NHS

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One thought on “Where does the future of the NHS lie – competition or collaboration?

  1. What an excellent piece! And what a shame you have to write it rather than it already being a widely shared assumption that, in the end, collaboration gets us there.

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