THE year 2002 marked a turning point in the NHS's history. It was the year that Labour finally lost its patience with the health service, abandoned its uneasy "third way" of partnership and command-and-control, and turned to the market to drive performance.
"If it is to better respond to the needs of patients, the NHS can no longer be run as a monolithic, top-down, monopoly provider," the Government said. "The reforms we are making will mark an irreversible shift from the 1940s 'take it or leave it' service. Hospitals will no longer choose patients. Patients will choose hospitals. Patients will be in the driving seat."
Heavy rhetoric was indeed accompanied by heavy reform. Hospitals increasingly have been reconstituted as semi-autonomous businesses (foundation trusts) and placed in competition with each other for patients; Primary Care Trusts have been introduced to "commission" care from providers on behalf of patients; patients themselves have been given choice of provider in electives (planned secondary care); and the market has been opened up to private and voluntary sector providers.
The net result is that many NHS organisations, particularly providers, are as much businesses as they are public bodies – speak to any chief executive of a foundation trust.
The burning question is: just how good are these fledgling "businesses"? Are patients in the driving seat?
Our analysis suggests not. Instead, in a service where the patient should be the ultimate customer, the number one customer so far as most new businesses are concerned is the state. Increasingly devolved and autonomous structures may be in place, but – to twist David Nicholson, the NHS chief executive's phrase of choice around – endless targets, policy reviews and initiatives that continue to flow from Whitehall force businesses to look "upwards not outwards".
In essence, there is a profound contradiction at the heart of the NHS: organisations are supposed to be acting like businesses and tailoring services to "win" customers, yet are operating in a system that fundamentally doesn't want them to.
The result for patients is not a happy one. To borrow the bestselling wisdom of Donald Keough, the former president and CEO of the Coca-Cola Company, too many NHS organisations are following the "10 commandment of business failure". They quit taking risks (in terms of innovation, not patient care); become inflexible; isolate themselves; assume infallibility; play the game close to the foul line; don't take time to think; put their faith in outside consultants; love bureaucracy; send mixed messages; and are afraid of the future. Staff, very quickly, start to lose passion for work.
Let's focus on one symptom in particular. Bureaucracy. Of course, effective regulation, systemic processes and data collection are essential in any health system; what you don't measure, you don't know. But this has to be aligned to a purpose. In the NHS, though, it has become an end in itself, which gets further away from what matters to patients with every re-organisation and policy review.
The NHS Confederation, which represents NHS managers, now estimates that 69 bodies, from the Care Quality Commission to the Environment Agency, currently regulate, inspect or demand information from NHS organisations – and this doesn't include the Department of Health and 10 regional Strategic Health Authorities.
The burden this creates is onerous. Looking at 35 of the more prominent regulators, the NHS Confederation found that requests for information regarding 73 out of the 77 core Standards for Better Health laid out by the Department of Health were duplicated at least once. Ten or more bodies in fact asked between 19 and 47 questions relating to five of them.
No-one quite knows how much all this costs NHS organisations, but, in one survey of secondary care organisations, managers considered that 58 per cent of information collected could not be used for any internal purpose.
Symptomatic of a system driven by "must win" targets, clinicians all too easily find themselves spending more time filling out forms that provide chief executives, bureaucrats and politicians with the data they need to satisfy themselves all is well, than caring for patients.
This is no way to run an effective business; or an effective service. The world's top companies and top hospitals do things very differently. Instead of starting with a desire to meet diktats, targets and central initiatives, they begin with a clear understanding of what their customers want and need, and develop services accordingly.
They value their staff and despise bureaucracy. As Jack Welch, the former CEO of General Electric, once said "the people closest to the work know the work best".
To succeed in this brave new world, it's time for NHS organisations to embrace similar principles; to start backing people rather than processes; to start developing cultures that reward innovation and success; to start putting patients first. The question is, will the government stand back and let them?
James Gubb is director of the health unit at the think-tank Civitas. With Peter Davies, a GP Principal at Keighley Road Surgery, Halifax, he has written a new book, Putting Patients Last: How the NHS keeps the ten commandments of business failure.