Chief executives within the NHS should be rated in two areas, as perhaps they would be in the private sector. Firstly, they should be assessed on the organisation’s overall management in terms of meeting the needs of its ‘customers’: economically; in terms of capability; and effectiveness in the deployment of resources. Secondly, they should be assessed on their leadership in ensuring the best results for patients and employees, where morale is key.
An assessment of this nature can be made based on evidence that is publicly available. Although the current chief executive of the NHS is Amanda Pritchard, she only assumed this role in 2021. The chief executive who is responsible for the current state of the NHS is Simon Stevens.
The NHS that Amanda Pritchard inherited
NHS outcomes in 2019 were the worst in the organisation’s history. In addition, there had been an unprecedented running down of stocks of personal protective equipment (PPE). The NHS, therefore, found itself particularly ill-prepared for the arrival of Covid-19
Here is a summary of the situation, just before the pandemic:
- Just 81% of A&E patients were treated in four hours in November 2019 (compared with 98% in 2009/10).
- Some 4.45 million patients faced 18-week plus waits to have routine operations in October 2019.
- The number of cancer patients who started treatment within two months was 83% (87% in 2019).
- Bed occupancy rates were almost 95% in mid-December 2019. In 2019/20, overnight general and acute bed occupancy averaged 90.2 per cent, and regularly exceeded 95 per cent in winter, well above the level many consider safe.
However, some context is needed. As Figure 1 (below) shows, the number of emergency attendances had increased dramatically (over 20%) from 20.5 million in 2009/2010 to 24.8 million in 2018/2019. This makes achieving treatment targets exponentially more difficult.
Figure 1. The increasing demand for A&E services 2009 – 2019
The situation for the NHS at the close of 2019 was frankly parlous, even before the feckless government handling of the pandemic. But in addition, Simon Stevens’ disastrous Five Year Forward View strategy document, published in 2014, had introduced a restructuring that was the Trojan Horse that opened the door to increased privatisation and cost-cutting.
How similar-sized organisations are run and what may be learnt
The NHS has averted disaster only through the dedication and tremendous skills of its staff. It is instructive to compare the NHS top management improvement strategies with the similar-sized organisations mentioned in my previous article – Walmart (a private company), and Indian Railways (a public organisation).
Walmartemploys 2.2 million workers in 11,500 stores across the globe and is the most profitable supermarket chain in the world. Its unique success is based on its continuous replenishment system that delivers just-in-time goods to the right shops at the right time. Its continued success comes from continuously improving its profitability and from never having been reorganised.
Rule number one: Re-organise only as a last resort to avoid catastrophic collapse
The Indian Railways example
Indian Railways is a phenomenon, with 1.5 million employees transporting 22 million passengers daily, including 13 million commuters a day. In the early 2000s, some Indian politicians were considering privatisation of the vertically integrated rolling stock production section. The board’s reaction was to commission a final internal report with recommendations, on which I was consulted because of my work with British Rail and the Hong Kong Mass Transit Railway Corporation. In 2005, they booked me and my wife on the Delhi Express from Mumbai to New Delhi to experience the service and to meet them (the 860-mile journey in a first-class coupe cost £48. Compare that with a 332-mile journey to Edinburgh at over £300.)
I met the head of the study team, Sunil, a young Indian Railways senior manager with an engineering degree and an MBA – not an external consultant. He addressed the research question: Whether production units need to be corporatised or do we need a separate Rolling Stock Marketing Corporation to facilitate the marketing of rolling stock in foreign markets? The second question was: If so, what was the best organisational model?
Note that the first question was not one of how to reorganise, but whether reorganisation should happen at all.
Sunil and his team produced a 90-page report with over 80 references to understand the nature of demand and the conditions for economical delivery. The report stated that: “Finding the right model is crucial, without which any restructuring could backfire, as has been the experience in some countries, for instance:
- The 1994 privatisation was followed by the bankruptcy of the UK rail infrastructure company in 2001.
- Railway services (and infrastructure) declined in Argentina after privatisation in 1992-94.”
The recommendation was that they should not reorganise the internal rolling stock operation, but instead spin off a production facility for export sales – carefully, considering the need for culture change. It was accepted, and Sunil used it as the basis for a successful doctoral dissertation.
Rule number two: Do NOT use external consultants to study your organisation and to carry out changes. Your own staff know best. Follow the Vanguard approach. Teach managers how to study the work, with the staff, measure the impact on patient care and institute a regime of patient-led continuous improvement. Avoid the snake oil salesmen.
(By the way, here in the UK, the much-admired John Lewis Partnership with 79,000 employees had its first mini-reorganisation in 70 years when it put together John Lewis and Waitrose to be managed and operated as a single business in 2020. Toyota, a company that is much quoted in the NHS, has never re-structured.)
So, how about the NHS?
In contrast, the NHS has been tampered with by clueless politicians throughout its history. However, it managed to avoid drastic reorganisation until Andrew Lansley’s tenure, followed by Stevens with his disastrous Five Year Forward View and then Jeremy Hunt came on the scene.
So, what happened in the NHS? Did Simon Stevens, like Indian Railways Board, commission a study with a clear research question before his infamous Five Year Forward View was published, just six months after his appointment in April 2014? If so, where was it published? What thorough investigation led to this costly spree? Were outside consultants involved?
“Health bosses have spent at least £17.6m on management consultants to draw up the strategies, which earmark cuts to departments and some A&Es. Sustainability and transformation plans (STPs) have been created in 44 regions in a bid to revolutionise services while saving money in the face of an expected £900m NHS deficit this year.”
For that matter, what study did Lansley conduct before his disastrous Health and Social Care Act of 2012? Readers may recall the involvement of global consultancy McKinsey & Co. Did McKinsey carry out a detailed study of the NHS before issuing its very expensive proposals? If they did, where is it? Former health minister Lord Owen revealed that reforms in the 70s had been drawn up by McKinsey and were scrapped after it was decided they “were going to be an unparalleled, expensive disaster”
McKinsey also advised John Major’s government on the disastrous Railtrack privatisation, while another client of theirs was Enron, the US energy giant which crashed in 2001. Why would you ever use them? Last year McKinsey & Co. agreed to pay $574mn to US authorities as part of a settlement for its role in the opioid crisis, which has killed hundreds of thousands of Americans. Yet, politicians and NHS leaders follow their advice, and pay them tens of millions!
Since the beginning of the Covid outbreak, the firm has won 30 separate deals – chiefly from the Department of Health and Social Care – to support coronavirus-related programmes. These contracts were worth about £42mn and included £13mn spent across three deals in 2021 that were intended to enable “rapid response” to issues related to the NHS Test and Trace programme.
Understanding care pathways: better late than never?
It now seems that the politicians have finally realised the importance of patient care pathways, especially discharges. Addressing the right-wing Policy Exchange in October, Steve Barclay, the new secretary of state for health and social care, declared, “We currently have over 12,000 beds occupied by patients who are medically fit to discharge” (bed delays) and a “lack of flow within our hospitals”.
This lack of flow is often the result of bed delays, which data are a great indicator of flow management and a predictor of trouble. Below, Figure 2, shows the Delayed Days (DD) from 2009 to indicate both and the extent of Simon Stevens’ inability to manage the NHS properly. The system was stable until Stevens took over in 2014 (blue arrow). By 2016/17 (red arrow) the average number of delayed days had risen by 60%!
Figure 2. Control Chart: NHS and Social Care number of bed delays per month from August 2010, to August 2018 measured in months
Now, clearly, Stevens was not responsible for the increasing number of delays in 2014. That was largely due to the previous CEO, David Nicholson’s irresponsible cost reduction challenge, urged on by McKinsey. But, had Stevens known anything about managing flows he would have acted immediately when he saw the four red signals (the green arrow) which indicated an out-of-control situation developing. He did not, not least because he was busy reorganising. This incompetence on top of the reorganising, on top of the lack of staff planning and payments, has caused a catastrophic failure in overall performance brought about by rank bad management.
Stevens’ legacy to Pritchard
So, what was Stevens/Hunt legacy to Amanda Pritchard? As I write, the NHS has a demoralised, exhausted staff who just might go on strike after suffering the worst leadership since General Percival handed over Singapore to the Japanese in 1942. This is now her poisoned chalice, which she appears to be on the verge of topping up with more hemlock by, as the latest Health Service Journal reports that there is “strong momentum” in NHS England towards reviving Payment by Results for elective care, which could mean Trusts being paid purely for each unit of activity delivered, without a block contract element.
This approach has been so discredited by every reputable organisational expert that I am amazed it is even being considered. It will damage morale and, as a result, patient care. It will encourage selfishness and ensure minimum risk behaviour and the loss of shared best practice. The new Chair of the Health Select Committee, Steve Brine, who has a mind of his own, should challenge it immediately.