Link, share, join, listen ...
Link, share, join, listen ...
So the Health Bill has finally been passed!
Initially I took great personal interest in the proposals of the bill. I started at Interim Partners in April 2010, I had recruited into the NHS before as part of broader public sector remit but now it was my sole focus and the White paper that came out in June 2010 with the initial proposals of the bill was essential reading.
I have to be honest and say my interest has waned over the last two years, for two main reasons:
1. The challenges against and support for the bill have resulted in a series of changes which have been so frequent and nuanced that it has been easy to lose sight of the original starting points.
2. The more recent coverage seemed to degenerate into general “Lansley bashing” and debates over whether it would be passed or whether it should be repealed altogether. It has become almost fashionable to take an opposition stance. When the Royal College of GPs (the very group destined to benefit most) called for the bill to be withdrawn in February 2012 it all became a bit laughable.
But if you work in the NHS or supply services to the NHS, I think 27th March 2012 was a notional day because the changes proposed by the bill have been well and truly in motion for a while. PCTs started clustering and establishing joint executive teams last April, CCGs are being established and are already recruiting to substantive posts and 10 SHAs became 4 in August 2011. Had the NHS waited until 27th March to get started on the structural changes required by the bill, the 1st April 2013 “go live” date for the new NHS would have had to have been put back a couple of years.
And there is the financial cost of change as well. £1.3bn or 3.4bn is the cost of transition depending on which numbers you believe, which makes you wonder what the cost would have been had the bill been repealed and the coalition had to put everything back to the way they found it? Now the bill is law, the NHS can at least focus on the tasks in hand – cutting costs and improving patient care.
So my question is this. Do you think it will be worth it?
Steve Melber is Head of Healthcare at Interim Partners.
Click here to read other blogs on the Public Sector sector
I received my first mention in the HSJ in February off the back of a PR piece we recently put together about some of the current market drivers for interim management in the NHS. The publicity has been welcome, I have certainly had three or four decent enquiries that may not have reached me without the article, but the mixed response across the comments has been very interesting.
For those that haven’t seen it, the article is titled “Mergers pay boost for NHS Interim Mangers” and highlights an Ipsos Mori poll which found that day rates for interims in the NHS rose 11% between Q3 2010 vs Q3 2011.
Surprising? Potentially so. Then again, the supply/demand balance is shifting. I checked my numbers and Q3 of 2010 was my worst quarter in two years at Interim Partners for new requirements coming through, Quarter 3 of 2011 has been my second best.
The HSJ reader base comprises some interims of course, but the majority will be permanent employees in the NHS, and understandably there has been some vitriol from those who have been displaced or made redundant. I can understand that when redundancies have been made, or your employer is heading for a year end deficit, it would be galling to see an interim appointed in your organisation, or to see interims enjoying pay rises whilst your pay is frozen.
But as one person commented;
“Quite frankly if an organisation needs to employ interims then it must ask itself some fundamental questions.”
Interims bring the skill and expertise not found in-house, or they cover the gaps that an organisation struggles to fill on a substantive basis, which could be for any number of reasons. Another comments:
“My own view is that using interims/consultants was fine in the days of plenty when the NHS was a growth industry.”
If anything I think the opposite is true, when the NHS was growing, money should have been invested in training and development, to increase the skills and expertise of the NHS substantive workforce – interims rescue, solve, turnaround and improve and I think the fundamentals of the current state of the NHS bode well for NHS interim managers.
I’d be interested to hear your thoughts.
Steve Melber is Head of Healthcare for Interim Partners.
Click here to read other blogs on the Public Sector sector
It’s been a while since we have seen one of the papers covering the “scandal” of £1000+ / day interims working across the NHS, but The Telegraph obviously has information from some “NHS Accounts” (how about that for a spurious source). The article covers 14 temporary executives, most of whom have worked in the NHS on a permanent basis, left through retirement or redundancy and then returned to work for the NHS on an interim, day rate basis.
http://www.telegraph.co.uk/health/healthnews/8857511/NHS-fatcats-take-pay-offs-then-come-back-for-more.html#disqus_thread
As at lunchtime today there were 187 comments in response, the vast majority vitriolic.
To my mind it is distinctly unfair to level criticism wholly at this group; the more serious problems are in the system. Interim Chief Executives don’t force their way into roles, it’s a demand lead market. If your local trust appoints any interim executive board member, it means they generally have a leadership problem, poor succession planning, or they have a gap they cannot fill on a substantive basis. If your trust appoints someone who “presided over a hospital whose own doctors said some of its services were worse than the Third World” then that is a whole separate issue, but the onus lies of the board of the trust to make sure references and reputation of any potential interim appointment check out. And the board should be using an interim as a short term solution, and getting a substantive recruitment campaign under way as soon as possible. A good interim will not try and draw out a role, most are looking for the exit point and want to help an organisation get onto a more stable footing.
At executive board level, the number of instances of candidates deliberately leaving permanent employment in the NHS specifically to go interim is very rare. Early retirement or redundancy is often the catalyst, and often because it provides candidates with the financial cushion to set up a limited company and to sit on the sidelines for up to 6 months to await the right role. Any permanently employed candidates making enquiries to Interim Partners about coming onto the interim market are given fairly frank advice, the market is improving but is certainly not booming and very few interims can rely on being consistently engaged on an ongoing basis.
Steve Melber is Head of Healthcare at Interim Partners.
Click here to read other blogs on the Public Sector sector
If you’re going to create competition you have to ensure a level playing field. There was an interesting point debated in the House of Commons last week – The Public Accounts Committee convened to discuss The Achievement of Foundation Trust Status by providers of secondary care.
A key part of the reforms is the introduction of competition, and any qualified provider will be able to bid to be a provider of healthcare services in a particular area or across a particular speciality. Tariff levels the playing field, all providers bid to provide a service mainly on quality, given the commissioner will pay a standard tariff price to any provider of healthcare services. But what if an NHS hospital trust has an unusually high cost base, what if a hospital trust is grappling with the costs of a PFI, and what if tariff (even with regional uplifts) * activity does not provide enough income for that trust to be financially viable? They could fail if we get a failure regime, or as David Nicholson eventually conceded in the discussion – they could ultimately get a subsidy.
As the recent National Audit Office report stated: “Interventions using public money to increase aspirants’ apparent viability would also risk distorting competition and undermining the policy objective to increase hospitals’ financial sustainability.”
Translation: trusts that receive a subsidy are being propped up and might therefore be more competitive in future. Market economics goes out of the window, and if I was a private provider of healthcare losing out on bids to provide services because an NHS competitor was being subsidised then I might feel pretty aggrieved. I’d be interested in people’s thoughts.
Steve Melber is Head of Healthcare at Interim Partners.
Click here to read other blogs on the Public Sector sector
An article in the Financial Times on Friday 8th July covered research from the University of York which has found becoming a Foundation Trust makes no difference to a trust’s performance. Which makes you wonder why trusts have bothered to drive towards FT status and why attaining FT authorisation is one of the key directives of the health and social care bill. Every aspirant FT has the same page on their website, selling the benefits of FT status and trying to garner local support for their application, but if I was a member of an aspirant FT I’d be inclined to ask the board what empirical evidence they could show me that demonstrates FTs deliver better patient care.
FTs may generally achieve better performance levels but as Maria Goddard, Director at the University’s Health Centre for Economics states, this is “the result of long standing differences between non-foundation trusts and foundation trusts, rather than being attributable to foundation trust status per se”. i.e. strongly performing FTs are good trusts because they are probably structurally sound, with good governance and strong commissioner relationships, so becoming an FT hasn’t made them a good performer, they were good anyway. You might argue the application process itself will raise the performance of a trust, and once above the line and through the gate, that performance level can be maintained? Not necessarily says Goddard, “some hospitals were better than others to begin with, and over time they have all converged and there is no longer any differential performance apparent.”
I’d be interested to hear from interims in our network that have a front line perspective on this. Have you worked for a trust which has really benefitted from achieving FT status? What about those who have been authorized only to see their performance drop? Is the autonomy granted by FT authorization often a recipe for disaster (Mid Staffs?) Given FTs can acquire neighbors and grow private patient income under the bill, will they now be able to truly benefit and prosper as FTs in a way they couldn’t before?
Steve Melber is Senior Consultant, Health at Interim Partners.
Click here to read other blogs on the Public Sector sector
I met an interim last week who suggested to me that what the NHS needs most right now is a renewed debate around the need for a failure regime. It struck me that it is probably what my household needs as well around the kid’s bedtime. As my wife keeps reminding me, my 3 year old son will continue to play up unless we follow through with our (hitherto empty) threats to genuinely put his toy cars in the attic unless he brushes his teeth and gets into bed. That threat of adverse consequence is often a key driver of behavioural change or performance improvement – alot of my current work is coming through in acute cost reduction and transformation, but there is a significant number of trusts that have comparable or worse problems than my current client base, but a limited acknowledgement of their problems, an indifferent attitude to the consequences of inaction and little interest in the potential value that could be added by interim resource. In this new era of competition, commercially minded trusts should prosper, and those trusts with historical performance issues may find themselves facing more problems caused by declining income as patients vote with their feet and take their ailments elsewhere. But those trusts need to know there are consequences to failure, and that Monitor will have the teeth to completely remove a board and force a merger with another trust or even worse – close a hospital.
The Hinchingbrooke franchise set an important precedent, and has sent out the message that the private franchise model will be considered and used in the right circumstances. The encouraging result is that a number of trusts are being forced into having that difficult discussion now about their future viability. A contact at Monitor suggested to me that any trust struggling to see where their CIPs are coming from in year 3 should be starting to think about the merge / private franchise now, and not in two years time.
Fear of failure and the implications should drive performance improvement, raising productivity, clinical quality and standards of patient care. Perversely what might really help is a hospital closure, so that those near the bottom of the performance rankings know it’s a very tangible threat, but unfortunately I think we’re unlikely to see it come to pass, the coalition’s plans for health reform are already the subject of great scrutiny and a hospital closure would be a political death knell. The growing dialogue about franchise or merger is at least a step in the right direction, and for the good of the wider NHS hopefully will be a sufficiently unpalatable scenario to drive genuine performance improvement in 11/12. Your thoughts as ever are appreciated.
Steve Melber is Senior Consultant, Health at Interim Partners.
Click here to read other blogs on the Public Sector sector
Prominent in the Yorkshire local news this week is coverage of the proposed closure of Leeds NHS trust’s children’s heart surgery unit. Nationally the number of children’s heart centres will be reduced from 11 to 6 or 7, with the unit at the LGI being one of those under threat. Naturally there is considerable local opposition, but the story is not unique to Yorkshire and similar stories will be unfolding in many communities across the country. The maternity unit at Pennine Trust’s Rochdale infirmary will be closing later this year and next week Lansley will make a decision about the long running argument about the closure of A&E at Barnet and Chase Farm. As Chris Ham of the Kings Fund points out “Chase Farm is a test case for the rest of the NHS. Unless ministers are willing to grasp the nettle and recognise the need urgently to undertake significant reconfigurations of hospital services across the country, then the NHS’ ability to achieve the big NHS efficiency savings its needs whilst delivering safe services will be in jeopardy”.
Centralising A&E, maternity and specialist services on a regional basis will be key to the NHS’ survival, the standard model of the mid sized DHG delivering all healthcare services is just not sustainable. If a hospital provides a specialist service which is ultimately underutilised, when there is a high cost of attracting the right specialist consultants and investing in the right technology and supporting infrastructure, then the unit cost of service delivery will quickly exceed a break even point. And small hospitals that lack economies of scale will have an even tougher challenge and will be susceptible to acquisition. Unfortunately the notion of free healthcare delivery at the point of use is one that is engrained in British culture, and most of the British public expect all of their healthcare services to be available locally from their local hospital. This coalition government will be remembered for hospital and service closures, and expect them to rapidly lose support in the areas worst affected. However the sustainability of the NHS could well be dependent on such tough decision being taken. Will the government grasp the nettle as Chris Ham suggests, or will the force of local politics be too strong to allow the much needed reconfigurations to go through? As ever I’d be interested to hear your thoughts.
Steve Melber, is Senior Consultant, Health at Interim Partners.
Click here to read other blogs on the Public Sector sector
Thanks once again to all of those who responded to our recent survey on interim management in the NHS. I wrote an article summarising the findings in the most recent Interim Partners newsletter, we also issued the article to our PR company, and the survey was picked up by the Times on 10th December and the Guardian on 14th December – click here to view the Guardian article. But I also wanted to post the same article in a blog, so that our interims would have a chance to comment.
Were you surprised by any of the findings? Are you optimistic about 2011? I look forward to hearing your views.
There is certainly scepticism amongst our NHS interims that Lansley’s proposed changes will improve service delivery or cut costs. 76% of respondents think government plans to empower GPs to commission services will not reduce costs, when one of drivers of this initiative is to abolish PCTs and strip out layers of NHS management. However 78% think opening up the NHS to any willing provider will improve service delivery, this suggests our interims feel there is plenty of room for improvement in NHS service delivery and with the introduction of competition into the market place, standards of care should improve as NHS hospitals start competing with private providers for patient activity.
Our interims also feel that the interim management market in NHS will fare relatively well compared to other areas of the public sector. 39% felt that central Government and 36% felt local government would see the biggest falls in demand for interims and this is certainly reflected in the number of new candidate registration enquires we are receiving. There has been a marked increase in the number of local government, BSF and central government interims enquiring about opportunities, even though Interim Partners has historically not had much presence in these areas. Interims in those sectors are clearly trying to broaden the number of providers they work with in an effort to try and increase access to the fewer opportunities that are coming through, this is a trend which is not necessarily in evidence for NHS interims, 38% are working with a greater number of providers than one year ago, but 40% are working with the same number and 22% are actually working with a smaller number.
Anecdotally I have certainly been aware there is pressure on rates, 45% reported that roles they are being approached about are at rates lower than their usual expectations, this is driven by a general lack of opportunities in the marketplace but also increasing commercial awareness with clients that it is a buyer’s market. We receive quarterly updates from the Interim Manager’s Association which has management information across the interim management marketplace which comes from the 30 IMA members. The latest analysis of Q3 2010 shows an 12% drop in average day rate for interims compared to Q4 2008, this figure applies to the wider market not just public sector or NHS interims but I expect the drop would be more marked in the NHS, given the 12% decline will be dragged upwards by strongly performing areas such as financial services.
Certainly I have had three client enquiries in the last three months where a conversation about a potential requirement has turned to budget and the client has offered a budget well below market rate, or stated a strong preference to appoint on a fixed term contract.
Unsurprisingly, a significant number of interims would now consider taking a fixed term contract or permanent opportunity, suggesting that declining rates and utilisation over any given 12 month period means the income differential between interim and more substantive employment is narrowing, plus the uncertainty and anxiety of looking for interim work means the security of fixed term or permanent employment looks more attractive.
94% of interims felt confident they could transition into the private sector if they had the core skill set required, but our experience across interim partners is that it is often difficult to transition candidates from one sector to another. This is a feature of a maturing market and a growing understanding amongst clients that they can generally ask for a certain skill set and experience AND the right sector expertise, and the market is able to offer it to them.
Interestingly, 54% of our interims think 15-20B in savings can be found without affecting service delivery, suggesting NHS interims feel there is alot of fat to trim. The HSJ reported that as such as 1Bn could be saved by merging back office functions, something many feel the NHS should have looked at years ago. Respondents also recognise that system wide transformational change will be key to making savings; nearly half (49%) think organisational change will be the biggest area of demand for interims in the NHS. Interestingly, David Nicholson told delegates at the NHS Employers conference a couple of weeks ago that the proposed reforms in the NHS are the “biggest management of change exercise in the world” and those who are not ready to embrace and drive the change should go. At Interim Partners, our business is largely driven by change. There will be pockets of talent in the NHS leading the reforms, but change management capability is not in abundance, and has been and will continue to be depleted as we go through MARS and voluntary redundancy schemes as PCTs re base their management costs and acute trusts need to find year on year savings just to stand still. External support will be needed, it’s just of question of when it starts to happen and it what kind of volume.
Steve Melber is Senior Consultant, Health at Interim Partners.
Click here to read other blogs on the Public Sector sector
The £25-35 per head of population at first seems generous, but the devil is in the detail, as the figure is for “running costs”. It is still unclear exactly what proportion of this figure is for management costs. PCT management costs in 08/09 (click here for Government source) were £1.4Bn, covering a population of circa 60M equates to £23 / head, research by the Lib Dems pre election put the figure at £28 / head, (HSJ) if we assume an average of £25 / head, and also take into account the 09/10 revised operating framework instruction that PCT management costs should not exceed 66% of 08/09 costs then should GPs be working on budgets for buying management support of roughly £16 / head of population? A consortia will arguably need 40% less in terms of heads, as they will not inherit some statutory PCT functions, key functional roles such as Finance Directors may be shared between consortia, and GPs are doing the commissioning themselves, all of which should mean there is room in the budget to buy in interim support where it might be needed.
I’d be interested to hear the thoughts of our interim community - has anyone else had similar findings when crunching the numbers? Can anyone provide additional insight into how consortia will buy in support and the expected costs will be? Will most consortia go out to tender and enter into 1-5 year contracts with providers of management support, be they ex PCT staff in social enterprises, niche consultancies or private companies? Will the market for interims be into these providers rather than directly into consortia? Your thoughts as ever are appreciated
Steve Melber is Senior Consultant, Health at Interim Partners
Click here to read other blogs on the Public Sector sector
Demand for interim managers in the NHS was at its zenith in 2008, mainly fuelled by world class commissioning, but despite a recent contraction in the market I hold the belief that demand will return next year. It’s a truism that successive governments will continue to use the NHS as a political playground, a change of government means a change of policy and so the reorganisation proposed in Lansley’s white paper should drive demand for interim resource.
But an underlying and persistent driver of the NHS interim market is the protection afforded to the NHS’ substantive workforce. The Guardian reported a few weeks ago on how difficult it is for public sector employers to sack employees for poor performance. They cited a CIPD report which found that public sector organisations average one formal disciplinary case per 364 employees each year, compared with one disciplinary case per 119 employees among private services employers. Not only that, the average discipline case takes nearly twice as many management days to resolve in the public sector as it does in the private sector. Any organisation saddled with poor or average performers is going to struggle to drive their management capabilities and is more likely to need external support to deal with anything outside of the business as usual remit.
Not only are average performers difficult to remove, they are incentivised to stay. Those with longer tenure are more likely to hold out for statutory NHS redundancy payouts, rather than take advantage of the recent MARS scheme. And whilst average performers will stay, the good are more likely to go: the HSJ reported a couple of weeks ago on the PCT “talent drain”, as good employees start to jump ship early and secure new roles elsewhere. They quoted Dr Richard Vautrey, deputy chair of the BMA GPs’ who said “we do have concerns that senior PCT managers are leaving; the very people who we need in the future to make these changes work.” Most PCTs will see a reduction in management headcount and capabilities, and management cost reduction targets notwithstanding that should mean there is healthy demand for interim managers to assist PCTs in driving through change and continuing to perform their statutory functions through until 2013.
Your comments as ever are welcomed.
Steve Melber is Senior Consultant, Health at Interim Partners.
Click here to read other blogs on the Public Sector sector
