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The Maynard Doctrine: The Con-‘em Coalition and the management of hospitals

Professor Alan Maynard describes how the ‘two divisions’ running hospitals must collaborate for the NHS to survive austerity

The Con-‘em Coalition is to provide between 0.3 (Institute of Fiscal Studies) and 0.4 (Department of Health) per cent annual growth in NHS funding over the next four years. The IFS note that this is the tightest settlement since 1951-56.

So we now know what the Coalition means by “protecting” the NHS: sweet parsimony for all is assured!

The usual guestimates are that ageing and technological change adds up to 2 per cent to demand each year. If you believe this, funding “increases” are negative at over minus one-and-a-half per cent per year.

Undermining NICE
Then there is the desire of the Con-’em’s to distort rationing and undermine the National Institute for Health and Clinical Excellence (NICE). This is epitomised by the Cancer Drugs Fund. Why discriminate in favour of cancer patients and against all other patients?

Why undermine NICE’s attempts to use economic criteria to protect the NHS from drug barons peddling products of little clinical effectiveness at high prices? Being obsequious to Big Pharma wastes NHS funds.

Such inefficiency deprives other patients of care which they need and which would give them a better health gain. Surely such inefficiency is unethical, but we await the mea culpa from politicians buying media plaudits and votes - and from clinicians obeying the individual ethic of the Hippocratic Oath rather than the social ethic of clinical and economic efficiency.

No doubt Comrade Lansley will assert that a real growth rate in NHS funding of 0.5 per cent is good. Furthermore, he might argue that by shedding lots of “unnecessary” SHA and PCTs jobs, there will be savings.

However, initially the current “re-disorganistion” will divert funds into pensions and redundancy payments.

“Uncle” David Nicholson has tucked nearly £2 billion into his back pocket for this, but it may be the non-financial effects of reform that stymie urgently needed innovation, in particular weak financial and quality control as GP commissioners “gear up” for their new roles.

The two divisions in acute care
As pointed out many decades ago by an American researcher, Jeffrey Harris, hospital reform is difficult because these institutions are made up of two firms. One firm is run by medical staff (the “demand division”) and the other by management (the “supply division”).

Each half of the organisation has its own managers, priorities and constraints.

Within these dual firms called hospitals, the suppliers and the demanders have evolved complex trading rules which determine the allocation of resources. Of course these trades tend to be fraught with difficulty, as the medical staff-demanders make resource bids in excess of the supply-managers’ capacity to fund them.

Harris noted that regulatory activity was primarily focused on the supply-managers’ side of the hospital. Like Sir Roy Griffiths when reforming the NHS in 1983, Harris emphasised that unless regulatory activity included the doctor firm, it was “doomed to failure”.

So how do hospitals and these two firms manage resource constraints? Ideally, they will have evolved robust internal rules. These may be altruistic and selfish also  

Thus surgeons will reluctantly accept the cancelation of elective lists as medical patients spill over into their beds during winter crises. Nurse managers become accepted jugglers of bed availability. If all else fails, a touch of shouting and screaming will evolve as stressed staff face crowding in the Emergency Department and a failure of colleagues to discharge bed-bound patients swiftly.

Resource constraints and targets can bring greater mutual recognition between the two firms of the need to collaborate. Waiting time targets and expenditure breaches which threaten the survival of the manager-supply team’s survival may persuade the medical-demand firm to collaborate (rather than risk the insertion of a more aggressive alternative group of managers). Thus mutually advantageous innovations such as the appointment of general physicians to manage bed flow better emerge.

Also (and obviously), the manager-supply firm may seek to integrate key members of the demand-medical firm team in resource allocation choices. This enables medical ownership of difficult decisions and provides “apostles” to go forth and convert conservative medical colleagues!

So will tight funding of the NHS for the next four years be beneficial? Easy funding of the Blair years made innovation easier, because other services did not have to be cut and streamlined: more money funded more facilities, and not necessarily efficiently.

Con-‘em Coalition funding will be tight, and require the two firms in all hospitals to work collaboratively.

But will they do so? Or will they let waiting times rise and quality erode - and thereby restore the income of some from private practice?

Hopefully, the Chinese curse “may you live in interesting times” can be avoided by better use of formal and informal incentives that govern the relations between the medical-demander firm and the managerial-supplier forms in each hospital in the land.

Parsimony in funding brings with it much fascinating ‘theatre’, featuring slow (but hopefully not too slow) recognition of the mutual self-interest of the two firms in the survival and development of all NHS hospitals.