NHS Trusts “Back Office Consolidation” – A Month to Plan Is Ridiculous

The state of crisis in the National Health Service has taken a back seat to other news issues in the last few weeks, but it will surely come back to the front pages soon. Basically, the service does not appear to be able to meet demand within the current financial settlement, so something will have to give - and is giving already, with overspends, missed targets for A&E and the junior doctors dispute.

The Lansley reforms and the Health and Social Care Act of 2012 were going to drive a brave new world of competition and commissioning, but the Act is now being bypassed as we move back to more of a "planned economy". There are more articles to be written about the failure of those competitive principles, but that is for another day. However, in seeking efficiency, some rather desperate measures are now being proposed.

The one that caught our eye was the demand from NHS Improvement that all hospital trusts produce plans for consolidation and sharing of back-office services with neighbouring trusts."We will therefore be asking all STP leads to develop proposals to consolidate back office and pathology services with outline plans, initially on an STP footprint basis but with a mind to consolidate across larger areas over time, to be agreed before the end of July".

Now there are some fundamental questions about whether efficiency is available even if this is done well. (There is push-back already on the pathology front - see this response from the Royal College of Pathologists). Economies of scale often prove difficult to convert from theory into real benefits. And the evidence for shared services generally is that it needs the participants to be aligned in terms of systems and processes before services are shared, if you want to achieve decent outcomes.

For evidence of the dangers when initiatives are not executed well,  just look at the problems that central government shared services have faced - see the recent excellent National Audit Office report for a description of the problems there. Many of those issues came from an overly hasty, politically driven push to implement the two shared service centres and push user organisations into them without aligning properly first.

So you might expect the NHS to learn from this. But no. The hospitals have been given around 4 weeks to produce a plan which covers these strategic and business critical issue. That is crazy. If only NAO had the power to stop things before they happen rather than analysing the mess afterwards, we'd be praying they were on their way to bang on Simon Stephen's door and explain why this isn't a very good idea.

We're not clear also how far this instruction goes. Is procurement included in the definition of "back office"? There is a lot of voluntary collaboration going on within the sector, but just as in other areas such as finance, being pushed in haste into defined structures without thinking things through won't help. If shared services and consolidation does go ahead without the alignment of systems and processes, we confidently predict it will just cause huge disruption and end up costing more whilst providing poorer service.

Voices (2)

  1. dan2:

    I picture the plan looking something like this:

    Phase 1: Mobilise

    Phase 2: ?????

    Phase 3: Savings

  2. Sam Unkim:

    Where does NHS SBS Xansa / Steria / Sopra (49% owned by NHS) figure in these plans.
    Would have thought, they would be the “goto” option

    http://spendmatters.com/uk/tradeshift-and-nhs-sbs-e-invoicing-innovation-in-the-uk-health-sector/

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