Developing appropriate models for NHS hospitals in the new environment Paul Corrigan

1. Developing appropriate models for
NHS hospitals in the new
environment
Socialist Health Association
November 24
Paul Corrigan

2. Developing appropriate business models for
NHS hospitals in the new environment
• Arguments for continuity
1 Drivers for change The Reforms 1-4
2 Drivers for change The money
3 Drivers for change medicine
• What does this mean for the leadership of
hospitals
• How do they understand changing their
business model?

3. Arguments for Continuity
• Politics- The public makes sure we are untouchable
• Money- We will always be bailed out. Too big to fail
• History- we have been here for 60 years and will be
there for another 60
• Muddle- Hospitals are too complex you cant expect
clarity
• Management- Our doctors wont change
• Cost base- 75% of our costs are fixed
• Reform – commissioners are feeble and will not disturb
us

4. 1 Reforming the Centre
• The Secretary of State retains responsibility for ensuring the provision of a
comprehensive NHS
• National Commissioning Board set up receives resources and mandate
from SoS but is not Whitehall. DH is the client side
• NCB is a new form of organisation doing new things. It has a CEO and will
now set up a system to organise commissioning
1 NCB commissions GP services; national and regional services and some
others
2 NCB distributes resource, provides contracts/performance management
to clinical commissioning groups that they will soon set out authorisation
process Accountability to NCB is ongoing
• Both clinical networks and clinical senates will be hosted by the NHS
Commissioning Board; they will not be organisations or new forms of
bureaucracy.
• Set up English Public Health Service and provides resources (4-5% of NHS)
for local commissioning through local authorities

5. 2 Reforming Local Commissioning
• No single national new GP led commissioning system from April 2013
• “Where there is the will and capacity” statutory based clinical commissioning
consortia will be setup. They will reflect local authority boundaries
• Where clinical commissioning groups are not or are only partly authorised the NHS
Commissioning Board will commission
• A duty to promote integrated care laid on clinical commissioning groups
• Governance arrangements are outlined in the Bill
• Transparent Accountability with quality premium agreed by Parliament
• Public Health Commissioned through Local Authority
• Health and well being boards run by the local authority are integrative

6. 3 Reforming the provision of health services
for NHS patients
• We strongly expect that the majority of remaining NHS trusts will be
authorised as foundation trusts by April 2014.
• To enable time for foundation trusts’ governors to build capability in
holding their boards to account, we will further extend, to 2016, the
transitional period where Monitor retains specific oversight powers
over foundation trusts.
• We will have an effective failure regime that ends the culture and
practice of hidden bailouts and gets the right incentives into the
NHS, whilst protecting essential services.
• Level playing fields with public and private patients choose between
providers
• New integrative providers .
• New providers will have to demonstrate better vfm AND realise the
benefits themselves

7. 4 Managing a system rather than an
organisation
• Monitor becomes a system regulator as in other quasi
markets
• Monitor’s core duty will be to protect and promote patients’
interests.
• Monitor will ensure continuity of service
• It will set prices for NHS services in consultation with NHS
Commissioning Board
• It will develop prices for integrative services
• Monitor to regulate all NHS providers of care
• CQC will provide licence to trade
• Patient choice drive change through an information
revolution

8. Drivers for change The money
• Demand for health care will increase by about
20% in 5 years
• Most of this will be in long term conditions
• Resources will increase by about 1%
• The NHS needs to develop significantly better
outcomes for the same resource
• If the NHS is not to go bust this must mean a
dramatic drop in emergency bed use as primary
and self care manages better.
• In practice the tariff will deflate

9. Drivers for change medicine
• Changes in drugs has meant and will mean
earlier exit from hospital and more ability to
be treated at home
• (What percentage of chemotherapy will be
carried out at home in 2020)
• Specialisation and hyperspecialisation will
increase
• Care will move into the home and the
community

10. What does this mean for the leadership of
hospitals
• Your commissioners will change and then may change
again
• If commissioners succeed there will be less of the
current work going into hospitals
• If commissioners fail the system will become bankrupt
• The business model of offering to do everything for
everybody all the time cannot work
• Each Board needs to develop specific business models
• To achieve this you will need agility and the public can
stop that.
• The public need to be engaged in this throughout

11. How do they understand changing their
business model?
• An increasing number of Boards say “ We cant go on like
this” Vital first step to say and mean
• The promises of every hospital doing everything for
everybody is a false one and must be explained as such
• Need to work out what commissioning customer will want
and develop that to scale
• Need to change the % of fixed to variable costs
• Need to stop doing things that don't and cant work
• Must develop ongoing debate about the truth of all of this
with the public- otherwise they always say now
• Need to develop a new organisational agility to keep up
with the pace of change