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Executive Summary

 

The Next Steps on the NHS Five Year
Forward View presented the major key steps that the NHS has taken in the recent
past and the key improvements that they will make in the near future. This
report evaluates some of the key controls that the NHS are planning to
implement and assesses ways to improve them along with the likely impact that
they may have. The conceptual understanding of these controls lies within the
belief that these controls should guide the actions of employees towards the
organization’s vision. Most controls have certainly changed from being
traditional, coercive and mechanistic into being more modern, enabling and
organic which has been mostly reflected in the NHS Five Year Forward View. The
integration of healthcare systems offers a fantastic opportunity to become more
internally transparent and organic which allows for greater communication and
working together to ensure more efficient allocation resources while also
allowing for a better service for patients although there are ways that this
could be improved. Performance goals for Clinical Commissioning Groups (CCGs)
is a very direct and enabling way to allow for greater performance and ensure
greater steps are taken to reduce the financial sustainability gap. This is a top
priority for the NHS however, although the system seems clear, there could have
been ways to improve the control. There are also financial incentives that have
been offered to employers who look to improve their employees’ job satisfaction
and wellbeing. This control has both enabling and coercive features. These
controls appear to be solid, however measures can be taken to improve them
further. For example, a more forceful approach to ensure employee wellbeing is
improved and having CCGs present their reasoning for why they should qualify
for CCG Quality Premium instead of simple performance goals. With these adjustments
to the controls, they can become more effective in achieving their goal and
improving the efficiency and financial sustainability of the NHS while
providing a better service to the public.

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Context of the Reforms

 

It is clear to see
that the reforms have the agenda of improving transparency within the NHS in
order to increase efficiency and effectiveness while also attempting to improve
the wellbeing of employees. This will clearly have a knock-on effect and cause
greater public satisfaction as they will face highly motivated staff and
experience a more effective NHS to help them with their problems. The
report appears to be reliable with regard to the reasoning behind the reforms apart
from their view on how satisfied the public are being skewed considering
patient satisfaction declined by 11% between 2009 and 2015 (Box, 2016).
The main rationale behind the reforms is the need to be financially sustainable
and minimize costs where possible while maintaining high performance levels.
This is clearly a difficult task and requires in-depth and efficiently working
controls in order to ensure this happens. The Next Steps On The NHS Five Year
Forward View mentions how “demands on the NHS are higher than envisaged when
the FYFV was published” (NHS, 2017) It also mentions that life expectancy has
been rising by five hours a day and that there are half a million more people
aged 75 or over than in 2010 and 2 million more in ten years’ time (NHS, 2017).
The reforms recognize that this will place a huge strain on the NHS as it costs
three times more to look after a 75-year-old and five times more to look after
an 80-year-old than a 30-year-old. With the cost of innovations and
technological breakthroughs along with costs of services increasing, the NHS
will become unsustainable and without changes there will be a £30 billion
funding gap for the NHS nationally by 2020 (Myhealth.london.nhs.uk, 2017).
Along with this, very recently, Jeremy Hunt has announced that the pay cap on
NHS staff will be removed but there is no guarantee that the government will
give the health service any extra funding to cover the cost (Campbell,
2017). This clearly means that the costs for the NHS are set to rise further
and places an emphasis on lowering these expenses and improving efficiency
wherever possible.

 

Analysis of Reforms

 

One of the major developments that
the reforms intend to work on is improving the integration of healthcare
institutions around the country. Integration as a type of control means that
more emphasis is being placed on healthcare institutions to share collective goals
and work together to improve as one. The integration of these institutions will
allow for greater internal transparency and a more efficient use of resources. An
aspect of this control to get healthcare institutions to perform efficiently
and effectively together is peer reviews. Professor Sir Mike Richards said that
“peer review and transparency will become ever more important” (NHS, 2017).
This control is generally on the side of coercive and mechanistic as there will
be a set of specific procedures to follow to assess whether an institution is
performing well enough. However, there are certainly some features which agree
with the Ahrens and Chapman opinion of organic and enabling such as the
flexibility, free-flowing communication and a ‘bottom-up’ basis (Ahrens and
Chapman, 2004) of deciding how well these institutions are doing which places
the healthcare institutions themselves in charge of the success of their peers
and rating them on how well they believe that they are performing. The idea
behind this has a solid foundation, with the emphasis being on these
institutions working together and sharing resources so that as a group they can
be successful and have much greater cohesion and efficiency. This control shows
another example of New Public Management as it places an emphasis on
competition as institutions look to be the greatest peer reviewed institution
of them all. However, the major problem with this control is that it is
indirect which allows for friendships or rivalries between healthcare institutions
to form which can have detrimental impacts on their performance. Friendships
between particular healthcare institutions may result in good peer reviews for
each other even if they are performing badly and rivalries may cause bad peer
reviews for each other even if they are performing well. This competitiveness
may even result in institutions wasting resources in order to get an upper hand
on their rivals which clearly indicates that this control may not be
appropriate in solving the issue.

 

Another aim of the NHS reforms is
to improve the financial sustainability and efficiency of CCGs. The mechanism
by which they want to do this is by introducing performance goals. These
consist of financial control totals which must be met and CCGs who miss out on
these financial goals will lose access to the CCG Quality Premium which could
be as much as £5 per head of population (England.nhs.uk, 2017). This control is
enabling as it sets targets for CCGs to aim for with positive rewards should
they be successful in achieving these. This is also a clear example of New
Public Management as there are clear targets and a pay-for-performance system
whereby CCGs will benefit financially if they perform well. This control is
very simple to follow and makes it easy to decide which CCGs will get their
Quality Premium thus making it straight forward for the NHS and less time
consuming. The control is also beneficial in making it transparent for all to
be able to see who are the top performing CCGs along with knowing which ones need
improvement and by how much. A negative of this control is that CCGs may become
adversely affected by performance which does not yield the maximum rewards for
them. This can be shown by research conducted by Carol Sansone who found that
people in general are more negatively impacted and less motivated by a
performance bonus (Sansone and harackiewicz, 2000). The control is also direct
and fairly mechanistic which can have its drawbacks for example some CCGs may
have difficult circumstances which mean that they do not meet their goals even
if they did very well considering the situation that they were in. this
mechanistic system struggles to factor this in and may result in an unfair
allocation of resources. Along with this, some CCGs who can outperform their
goals may decide not to do so as they would fear that the NHS will set higher
goals for them in the future. This means that they will not maximize their
efficiency and instead settle for the minimum requirement.

 

Another control that the NHS will
implement in 2017/18 is the incentives offered to Healthcare institution
employers to improve how they look after their employees and increase their job
satisfaction. With only 52% of staff satisfied with the opportunities for
flexible working and 15% having experienced physical violence from patients,
relatives or member of the public (NHS, 2017) this is clearly an area where action is needed to be taken to
improve the conditions for the staff. The NHS will be introducing the CQUIN
incentive payment which is intended to motivate employers with a monetary incentive
to improve their employees’ health and wellbeing by 5%. This control is a
direct and enabling way to solve the issue and has clear benefits which can
help the employer by reducing costs related to sickness absence and having more
loyal, engaged and better performing staff (Lamb, Appleton and Tennant, 2017).
The control is organic as there are no specific set of standards that the
employers must follow and there is freedom in how they care for their employees
although this may result in a lack of understanding from some employers in what
deems to be accepted as improving the welfare of employees and what improves
the health and wellbeing of staff is subjective. Another problem with the
control is that there may be disgruntled employees who could also have problems
outside of work that effects them in the workplace too.  This could result in them claiming that their
wellbeing at work has not improved by the 5% criteria which could mean that the
institution misses out on their bonus, even if they have made significant
improvements, as a result of factors outside of their control. Another
potential problem could be that institutions may offer employees a cut of their
monetary incentive if they say that their wellbeing has improved significantly.
This kind of corrupt behavior would have to be monitored which could be costly
for the NHS and there is even evidence that suggests that monetary incentives
“oftentimes does not improve performance” (Bonner and Sprinkle,
2002) and so could
potentially be a waste of resources.

 

Recommendations for Improvement

 

Peer reviews to assess how well other healthcare
institutions operate places a lot of power within the hands of the institutions
themselves and can cause too much competition which may lead to adverse
results. A way to improve this would be to instead make a ranking system from
one to five stars which rate how quickly and effectively each institution is
working together. There would need to be a set of specific goals that need to
be met and for every level, there is an extra star attained. There could even
be extra incentives for institutions who attain five stars such as high-level
recognition and certificates which would highly motivate every institution to
work better together and allocate resources more efficiently. Some would say
that this mix of coercive and enabling controls would be a problem, but evidence
suggests that this view is in fact “a figment of our impoverished theoretical
imagination” (Adler and Borys, 1996) and in fact modern controls should
try to feature both coercive and enabling methods. If those institutions are showing an
outstanding level of integration, then this will have saved the NHS a lot of
money in the process. This recommendation would be very appropriate within the
context of the reforms as we can clearly see that the NHS have used standards
and incentives in other areas of their controls.

 

Performance goals for CCGs which consist of financial
control totals that they must meet in order to qualify for the CCG Quality
Premium is not appropriate as there may be times where some CCGs are placed in
a much more difficult situation than others which can stop them from achieving
their goals. A way to improve this would be to allow for CCGs to compile
reports which show their statistics and circumstances in order to showcase why
they should be given the CCG Quality Premium. There should be a specific set of
statistics that must be provided and then their view on the main reasons why
they deserve the Quality Premium. This “enabling-bureaucratic” (Adler
and Borys, 1996) type of control
will solve the issue of there being a specific set of goals which they must
achieve and the possibility of bad circumstances stopping CCGs from achieving
these goals while still maintaining emphasis on CCGs to improve their
performance and go beyond what the NHS might have set for them to achieve. The
presence of performance pressures with an enabling control style will allow for
adaptiveness (Heumann et al., 2015) and flexibility. This would most
definitely be an appropriate measure to take as it would make CCGs become far
more conscious about proving how financially sustainable they can be which is a
key objective of the reforms.

 

The CQUIN incentive payment intended to motivate
employers to improve the wellbeing of their employees can certainly be
improved. Although the control is organic and enabling which agree with the way
that controls in general should be set, it is not appropriate in this case. The
reason for this is because it shows that the need to improve the employees’
wellbeing are an option and is not essential but in fact this is an important
issue and should be a top priority for both employers and the NHS. Therefore, a
direct and coercive approach would be more appropriate to ensure that
employees’ wellbeing is maximized. There should be a set of standards and
prescribed actions put in place that employers must follow in order to get the
best out of their employees. This will also benefit them as these employees
will become more motivated and their productivity will increase. Although this
is mechanistic and a more traditional form of control, it is important that
this area is addressed as the NHS workforce needs to be highly motivated,
especially in today’s ageing population which is growing in size and
experiencing more chronic disease (Marangozov, Williams
and Buchan, 2016).

 

Commentary on the
rationale of the reforms

 

The reforms attempt to “future
proof” (NHS, 2017) the NHS in order to improve its sustainability. It is very
clear that the priority is to address three key areas which are the health gap,
the quality gap and the financial sustainability gap. It would be fair to say
that Brexit will be likely to have a negative impact on the “quality of care
provision to the public and the sustainability of the NHS” (McIntosh and West,
2017) which makes this task more difficult. In order to improve the financial
sustainability of the NHS, it is clear that management controls need to be used
which has proven in the past that it can provide benefits if there is a clear
vision in place (Miller, Dickinson and Glasby, 2011) and
thus the rationale for the reforms is justified. With the NHS “treating more
patients than ever before” (The King’s Fund, 2017), funding has only increased
very modestly and has meant that the NHS needs to maximize its efficiency in
order to still improve. The Department of Health budget will grow by 1.2% in
real terms between 2009/10 and 2020/21 which is significantly lower than the
average increases in health spending of approximately 4% (The King’s fund,
2017) which clearly signifies an emphasis on cutting costs and streamlining the
NHS where possible. There is still an issue with regard to improving the mental
health services, convenient access to GPs, easier hospital discharge and better social care which the
reforms hope to address. Therefore, having a clear structure and plan in place
to tackle potential problems and enhance the NHS should be a priority and this
means effective controls are needed. These controls will not only help the NHS “to be efficient and
effective” (Open.lib.umn.edu, 2017) but also help to “identify the reasons
of deviations and to take corrective action accordingly” (Siddiqui, 2015) which is vital for the sustainability of the NHS and
ensuring that targets are met and problems are addressed.

 

Conclusion

 

In conclusion, it is
clear to see that the NHS reforms are vital for the sustainability of the NHS
in the near future. With rising demand and increasing costs, controls are
clearly needed in order to manage the NHS effectively and increase efficiency
wherever possible. Doing this, while also improving integration and
transparency along with providing a better service to the public is difficult
and so time will tell as to whether the reforms are successful. The controls
that are planned to be implemented appear, as a whole, to be sufficient in
achieving these aims but there are certainly aspects which can be improved in
order to increase the likelihood of success. There are areas within the reforms
where the approach taken should be changed as they can sometimes be too
enabling, or in other cases, too coercive. For example, more direct and
coercive controls to ensure employees’ wellbeing is improved will allow for a
more driven attitude toward making this change and more challenging measures
should be taken to allow for CCGs to show that they can maximize their
efficiency instead of just simply meeting the NHS’ performance goals when they
can surpass them. Along with this, encouraging integration and efficiency by
using a more top-down management system with incentives will be more suitable
for achieving the NHS’ goals. Therefore, we can see that the NHS has a clear
strategy with solid foundations to achieve their goals however adjustments to
some controls would be beneficial and provide them with a better chance of
being successful. 

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