Date: Thu 07 Jun 2012

Something New in the NHS

A Glimpse of Broad, Sunlit Uplands?

Against the oppressive background of clouds darkening the skies over the public sector, every shaft of light makes one’s heart leap up. A recent article in the FT suggests that a few rays from the heavens occasionally penetrate the thick nimbus.

Last year, Hinchingbrooke NHS Trust in Huntingdon was facing closure. It had the lowest performing A&E unit in Cambridgeshire and had run up debts of £40m. Its colorectal department had been moved to another hospital after six serious incidents. In 2010 it had actually managed to kill two patients, and left a surgical instrument inside another one. A report on the incident quotes ‘dysfunction in the surgical team’ and a ‘breakdown in its relationship with medical, clinical and managerial staff’. Note that poor patient care and clinical performance went hand-in-hand with desperate finances.

A new light has dawned.

For the past 10 weeks the A&E department has come top of the Cambridgeshire league table. Since last winter, the proportion of patients waiting for four hours or more before being seen has fallen from 15% to 1%. The orthopaedic unit has cut the average length of stay for hip replacements from 5.6 days to 3.5 days, an improvement of 37%. The food has improved. Last year, patients who forgot to buy a parking ticket were welcomed to admissions with an ‘instant fine’ of £40. In February, it was scrapped. In early May, one knee replacement patient told the Guardian he rated the place 11 out of 10.

So what happened?

The headline is that in November 2011 the hospital was taken over by a private company called Circle Health. The new owners produced a plan on 1st February 2012 and have now got to work. Circle describes itself as a ‘healthcare partnership’ and a ‘social enterprise’, and has a novel ownership structure. 49.9% of its shares are held by an investment company owned by the employees and the remaining – controlling – 50.1% are held by a holding company in which the investors are various City funds. John Lewis meets Goldman Sachs? Maybe.

This, of course, is what has grabbed most of the media attention in the obsessive ideological tussle over the poor old NHS. The only thing that matters to some is how it is funded – privately or publicly. Never mind how it works or fails to work.

What is interesting about the FT piece is that it actually tells us something about what is different now from the way things were in January.

It encapsulates the difference by relating a tale told by a gynaecologist called Mr Abdel-Rahman. When he turned up to assess a leaking roof caused by some dislodged tiles, ten other folk were already there, including nurses, doctors and some of the people who move patients about, and between them they solved the problem in less than an hour. He was astonished.

Mr Abdel-Rahman is the Medical Director of Hinchingbrooke. He was expecting to have to organise the whole thing himself, after doing a risk assessment of course, and consulting with the partners he was working with. His words, as quoted by the FT, are touching in their simplicity: ‘The way they did it and the way they co-ordinated with each other was the lovely bit. There was no management to sort it out for them. They knew they had to sort it out between them.’ So a group of people who work for the NHS saw a problem and fixed it with no supervision, no plan, no targets, no controls, no forms and without working in partnership with anybody. Remarkable.

Mr Abdel-Rahman had opposed the takeover by Circle. He has told the Guardian that he had ‘been on marches’, ‘signed and organised petitions’ and ‘was very suspicious of the whole process.’ So it would be hard to accuse him of being a greedy capitalist. Maybe, like most of his ilk throughout the NHS, he is just a conscientious doctor and a decent, honest man who wants to do a good job and could and would do so if the organisation he works for were to let him.

There are four interesting things about this story.

The first is the reaction of those like Mr Abdel-Rahman observing the changes. The application of common sense strikes them as an extraordinary event. What is interesting about this is what it tells us about where they are coming from. They are used to madness and expect it. There is something heroic in their stoicism, but it shows how far gone the public sector is.

The second is the speed and the extent of the improvement. The FT article was written in early May. The A&E department went from basket case to model of excellence in three months. Just getting the organisation off people’s backs seems to have worked a small miracle.

The third is that the improvements in patient care save money as well. Shorter stays don’t only benefit patients who can get home faster and are exposed to hospital infections for a shorter time, but improve productivity. That reduces the cost per patient and releases capacity, so Hinchingbrooke can do more hip replacements. The guys with the sharp pencils at Circle reckon that the hospital was heading for a £230m deficit over the next ten years. They are now expecting a £60m surplus. If it materialises, they will pocket a modest £20m for their efforts and use to rest to reduce debt.

The fourth and most important thing is that it shows that all the heat generated by the public-private squabble is a red herring. It is all about the nature of the organisational model, not the source of funding. In a rational world there would be no earthly reason why Hinchingbrooke could not have done the same thing under public management. In the real world fear, irrationality and organisational psychosis get in the way.

The fundamental error is simple. Governments call the shots and they think that every efficient organisation has to be a Type A: processes dominate people, inputs dominate outputs, and control dominates direction. Their theory of motivation is the one elegantly eviscerated by Douglas McGregor in 1960 under the title ‘Theory X’. Theory X holds that people are basically lazy and incompetent and will either do nothing or run amuck unless coerced, controlled and threatened. Hence the processes, targets, audits and inspections, with closure the ultimate sanction. Encouragement is provided by slogans. When - as we have known these past 50 years - it doesn’t work, governments seek some big solution derived from macro-economics, such as pseudo markets, or invent new slogans like ‘patient choice’. All of this neatly by-passes the issue, which is the organisational model.

Those parts of the public sector delivering services need to be Type B. All that Hinchingbrooke has done is to trust its people and let them get on with it. It doesn’t need a clever strategy, just a sensible operating model. After all, it does not take a lot of insight to work out what a hospital is trying to do. If people are ill, it should try to make them better, and look after them properly while they are there. The model is not new either. It is simply enlightened, and very old indeed. It is also very simple: recruit competent people and give them clear direction, responsibility within boundaries, space and support. All you have to do is to trust them. Which may be the sticking point.

The irony is that the oldest and most outstanding examples of this operating model are state enterprises, and none of them are businesses. The ones that have applied it most uncompromisingly are the Roman Army, the C18th Royal Navy and the late C19th and early C20th German Army. They are the three most effective military organisations in Western history. Successful private sector businesses also use this model because it is the only one which works these days. But it did not come from business, nor is its use dependent on being privately financed.

The reasons why it is not normal practice in the public sector are convoluted. They have deep roots in the psychotic instincts of authoritarians who are naturally attracted to the power offered by politics. Those roots gain succour from Greater Taylorism and the legacy of scientific management. They are nurtured by the mindless transplanting of half-understood business practices like target setting, and turned into labyrinthine knots by the adoption of the half-baked fads which sweep through the business community at regular intervals. Obsessive micromanagement is intensified by the baleful conflict between the political and media systems as they both seek to optimise themselves. Together they belch out the clouds that suffocate individual initiative and kill common sense. It makes working in the NHS feel like trudging through Mordor trying to avoid orcs and evade the eye of Sauron. Teaching in a state school feels similar. The first step in getting out of the hole the public sector is in is to stop digging. Or, as the medical profession says, first do no harm.

Hinchingbrooke is not the only shaft of light. But it is encouraging to discover another small tunnel leading out of Kafka’s castle. Perhaps Mr Lansley and others will allow a Great Escape.