Hospital chains: a recipe for success?

Jeremy Hunt has asked Sir David Dalton to advise him how to ‘make it easy for NHS super-heads to take over struggling organisations’. Sir David was an obvious choice of an NHS super-head. His trust’s most recent annual report needs a whole page for the awards it received in the last year, including Best Acute Trust nationally in the NHS Staff Survey (2012). The tireless pursuit of error-free care leaps from the page. How easy then will it be for Sir David to find ways for him and other ‘super-heads’ to inculcate a culture of success into ‘struggling’ organisations?

After some early success, the experience in education appears to be turning sour as super-heads are turning into super-villains. Our own analysis of the leadership literature argued against the concept of the leader as hero and for the need to recognise the value of leadership that is distributed, and for a greater focus on systems of care, not just institutions. But Sir David’s remit is broader than an exploration of the ‘super-head’ model; it encompasses a spectrum of engagement with organisations in trouble – from buddying, through to turnaround, franchise and takeover – that could ultimately lead to the creation of a hospital chain.

It’s far too early to tell what impact the current buddying arrangements have had. And any future research will find it hard to disentangle the impact of buddying from the changes in leadership and governance arrangements that are running alongside it.

The experience of the ‘turnaround’ teams in 2005/6 suggests the need for a ‘whole health economy approach’ alongside strong stakeholder engagement and performance management. It’s not obvious why a high-performing trust from another area would be best placed to do this.

The use of the franchise model is again in its infancy, with Circle’s franchise at Hinchingbrooke the only UK example. Here, early hype about a transformation in care looks overblown, but they have created a stable position in a trust whose size and wider environment, surrounded as they are by a number of other struggling NHS organisations, make it a challenging institution to run. Again, many would argue that  a ‘whole health economy approach’ is needed in this locality.

There is some international experience of hospital chains – but it is mixed. In America, chains have predominantly been used as a means to secure market dominance and increase revenues; there are examples of the chain’s corporate objectives overriding clinical ones, threatening the quality of care. The experience in Germany is more promising. One chain, Helios, has been able to demonstrate reductions in in-hospital mortality in the hospitals that it purchased. At the recent European Health Summit organised by KPMG and the Nuffield Trust, lead clinicians from Helios talked passionately about the benefits of working there. Helios immediately integrated the hospitals it took over into their quality management system, regularly measuring and benchmarking each hospital’s performance using a wide array of quality and outcome indicators. Any ‘sub-par’ results triggered a peer review with a view to improving their treatment processes.  The system is overseen by the physicians in the Helios Medical Advisory Board, who are also charged with the medical integration of new hospitals into the Helios Group.

The Helios approach is not dissimilar to the concept of ‘Big Medicine’ as advocated by Atul Gawande. Gawande argues that medicine has a lot to learn from other industries, for example, catering, where tightly controlled chains have encouraged innovation and pushed up quality. I am inclined to agree with Gawande that ‘some will see danger in this. Many will see hope. And that’s probably the way it should be’.  For me, the hope lies in the widespread adoption of more systematic approaches to quality improvement, as exemplified by Sir David’s work at Salford Royal. The danger lies in the pursuit of yet another organisational solution to cultural and wider problems.

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#41745 Dr Michael Fischer
Senior Research Fellow in Leadership & Organisation
University of Oxford, Saïd Business School

This is a very thoughtful commentary, and the parallels drawn with examples of struggling schools is useful. A particular difficulty for organisations in trouble is that imposed management solutions tend to erode rather than support morale and a clinical ethos of care and compassion. In the case of a well-functioning mental health unit I researched over 4 years, the consequences of top-down intervention following a clinical incident eroded care, whilst produced dysfunction, trouble and crisis - leading to the unit’s collapse. (See the published study available at

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