Streamlining the organisation of the NHS without a top-down reorganisation

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Two facts about today’s NHS are incontrovertible. The first is that providers in England are in the fifth year of running an aggregate deficit with financial balance or surplus an unlikely prospect. The second is that the organisation of the NHS is complex and fragmented and consumes a substantial amount of management time and cost.

Streamlining the organisation of the NHS in England could release resources that might help to address underlying deficits. The challenge is how to do so while avoiding another damaging top-down restructuring. A solution could be found by making changes to organisations that do not have direct responsibility for patient care.

Aligning the work of NHS England and NHS Improvement would be a good place to start. These organisations employ around 7,000 staff between them either directly or on contract, with most working in NHS England. A start has been made on merging teams in some regions and this process needs to be accelerated and extended to their headquarters functions.

Objections might be raised that this cannot be done because of the requirements of the Health and Social Care Act 2012. Although Monitor and the NHS Trust Development Authority were brought together into NHS Improvement without breaking the law, this was relatively straightforward as these bodies were both involved in regulating providers. There are much greater challenges in combining the work of a commissioning body and a provider regulator and the powers that (as the NHS Commissioning Board and Monitor respectively) they have under the Act.

Full merger is unlikely to be an option but close alignment of functions and staffing may be possible. Legal advice will be needed on how to achieve this and the extent to which it can be done without falling foul of the 2012 Act. It will also be important to keep on the right side of the auditors. Just as with the development of sustainability and transformation partnerships (STPs) and now accountable care systems (ACSs), it ought to be possible to find a workaround in the short term, with changes to the statutory framework taking place when the political context makes this possible.

Alignment should be the stepping stone to reducing headcount, particularly in regional and area teams, and ultimately integrating the work of these teams with STPs and ACSs. This would not only cut the running costs of NHS England and NHS Improvement but it also has the potential to reduce the regulatory burden on commissioners and providers. An added benefit would be creating coherent oversight able to provide a single view of NHS finances and performance and consistent messages to providers and commissioners.

If the appetite exists to make these changes, then current vacancies at the top of NHS Improvement offer an opportunity to move decisively in this direction. Having a single chair and chief executive for both NHS England and NHS Improvement would be logical and would send out a strong signal about the direction of travel. Other senior roles could also be combined in due course (starting with finance and performance) leading to full merger of the two boards when the law changes.

Changes to the number and role of clinical commissioning groups (CCGs) and commissioning support units (CSUs) should also be pursued. This should include establishing single management teams across neighbouring CCGs, building on work already under way in some areas. It should also entail moving towards strategic commissioning, making use of longer-term outcomes-based contracts and joint commissioning with local authorities being given more emphasis where this is not happening.

Redeployment of staff working in CCGs and CSUs – estimated by the National Audit Office to employ more than 22,000 staff – would free up more resources for patient care. Some commissioning functions and staff might be taken on by ACSs and partnerships being established within STPs as the commissioner/provider split as it has existed until now is superseded. The regulatory burden on providers would be reduced, enabling providers to cut the number of staff employed on contract management that adds no value and to give greater priority to service improvement.

Another issue that should be explored is the number of STPs required in the future and their role in the emerging system. An important consideration is the availability of experienced NHS leaders able to provide the strategic leadership needed by STPs and the implications of accountable care arrangements that are beginning to emerge. Now is the time to work through the logic of these arrangements to avoid setting up new organisations that may have to be unravelled in short order. The staffing of STPs and ACSs must be proportionate to avoid a new layer of bureaucracy replacing the old.

Careful thought should also be given to how other national bodies engage with the realignment of NHS England and NHS Improvement outlined here. A national sustainability and transformation partnership bringing together representatives of all bodies in a single board should be established to ensure joined-up working at the centre. As at the local level, this could be formalised through a memorandum of understanding that respects the roles and accountabilities of national bodies and ensures lawfulness.

Structural change should never be undertaken lightly which is why the focus should be on organisations one step removed from patient care. To be sure there are risks in embracing the ideas outlined here but some are already in train and others under active discussion. There are also risks in not grasping the nettle of organisational complexity and the potential it offers to reduce financial pressures on the NHS and improve patient care. Politicians should recognise their responsibilities by being willing to pass legislation to regularise these changes and avoid unhelpful legal challenges.

Comments

Tony Ranzetta

Position
Retired and enjoying it,
Organisation
Ex NHS
Comment date
29 September 2017
Chris
Endorse the approach and we found a number of ways of achieving organisational alliance and alignment in Scotland when setting up the NHS Boards without the need for any primary legislation other than that already in place provided we kept HMT on board.

It not only allowed a reduction in the need to recruit and retain staff in such functions but the alignment of budgets allowed surpluses in some organisations to offset deficits in others (rather than a rush to spend surpluses at year end) and greater balance sheet flexibility both of which saw huge deficits in Scotland cleared over 18 months

Key also was ensuring that everyone affected was managed into new posts and avoiding the extraordinarily high exit costs that has been the poor track record of the NHS.

This required the Chairman of every board type to commit personally to ensuring this happened as the barrier tended to be Boards declaring their independence over recruiting their top teams. At the end of the day, temporarily giving up one element of independence to sort out the far bigger and damaging problem of recurrent deficit and retaining experienced strategic, performance management and process redesign staff within the NHS is a small price to pay.

Best wishes

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