New organisational models for the NHS won't be built in a day

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The Dalton review, which is examining ways to encourage the best providers to support those that are struggling, has not been published yet, but the prospect of a range of new organisational models for NHS providers seems to have caught the imagination of policy-makers.

The team leading the work on the Dalton review for the Department of Health uses the analogy of a set of golf clubs – the NHS is currently trying to play with only a few clubs in its bag, primarily standalone or foundation trusts and trust mergers, but the new organisational models would give the NHS a full set of clubs. It's a neat analogy but not strictly true. The NHS is already using many of the options Dalton is considering but is not using them very successfully or strategically, particularly when it comes to resolving issues of providers’ clinical and financial sustainability.

The default option to address provider failure – trust merger – is certainly far from effective. Of the 112 mergers between 1997 and 2006, 102 brought no improvement in productivity or financial position. With 40 per cent of trusts stuck in the pipeline to achieving foundation trust status, different approaches are needed.

The options under consideration include: what the Dalton team call ‘federations’ but others might call networks, for example UCL Partners who work with an academic health science network; service level chains such as the one led by Moorfields for ophthalmology; joint ventures; management or operational franchise, geographically dispersed multi-service chains; and vertically integrated care organisations. It's a long list. Lots of potential clubs in the bag.

The King's Fund and the Foundation Trust Network have just collaborated on a publication that looks at many of these options. As well as a high-level review of some of the evidence about their effectiveness, we have sought the views of a wide range of senior leaders from within the NHS and outside, many of whom have experience of one or more of these models. One of the most radical options, geographically dispersed chains, which include hospitals which are not local to each other, attracted a lot of commentary. In one of the contributions from the report, Jonathan Fagge, Chief Executive of Norwich clinical commissioning group reflected, ‘many patients believe that a national chain already exists - the NHS brand adorns every front door, uniform and letterhead’. 

A recurrent theme from the evidence and the contributors was the need for a chain to get the right balance of devolved autonomy and accountability, something that the NHS as a whole continually struggles with. Or as Sorensen and Sorensen argue, the need to balance two forms of organisational learning: 'exploitation' to realise economies of scale and 'exploration' to support innovation.

Our review of the evidence suggested that any of the arrangements under consideration could bring benefits but it is not the organisational form that will determine the outcome, it is the quality of leadership alongside a culture of excellence in performance and accountability for results. If successful leaders take on the running of other organisations they and their boards will need to establish new ways of working that achieve the right balance of 'exploitation' and 'exploration'. Their political masters will also need to remember two important things. First, successful organisations, like Rome, are not built in a day. Second, the performance of secondary care is increasingly interdependent with the performance of primary care – where is the successful leadership model for that?

Read the paper: Future organisational models for the NHS