The latest report by KPMG into collaboration in UK healthcare reveals concerns over leadership in the NHS.
Matt Custance, partner in KPMG’s healthcare team, comments:
“The NHS is one of the best healthcare systems in the world. We can get access to incredible care that’s free at the point of use. But our economy and demographics are changing, and the NHS needs to keep up if it’s going to have a future.
“Currently, there is a small pool of talented leaders thanks to the NHS’s risk averse nature. The service is much more about accountability than it is about excellence. Put a foot wrong as an NHS CEO and you’ll lose your job.
“There are many examples of good leadership development in the NHS aiming to address these issues, one being the NHS Leadership Academy. But too often leaders in the NHS are not supported well when they face difficult challenges. Too often leaders are moved on to new roles, and this creates a constant “merry-go-round” where leaders are afraid to act in the face of challenges. We should therefore not be surprised that too few come through with the skills and resilience to master the challenges the NHS faces now.”
Is competition stifling progress?
The report explores whether collaboration, instead of competition, will secure the NHS’s future.
Beccy Fenton, a partner in KPMG’s healthcare team, comments:
“The arrival of the Sustainability and Transformation Plans (STPs) in December 2015 was a game-changer. These plans require systems to come together and agree their transformation plans and blueprints for health and social care integration. The STPs should lead to a proactive focus on the well-being of the local population, considering how to prevent the main drivers of ill health and poor quality care.
“Aside from collaboration however, for the STPs to really work we need accountability and incentives. These two factors have a significant role to play in all collaborative activity.”
New payment models
The report calls for STP leaders to address the “perverse financial incentives”, which can get in the way of achieving the best outcome for patients. Currently NHS providers are rewarded on volume; they are paid for the number of patients they treat, and this encourages competition between providers. Instead the report suggests that the NHS would benefit from ‘value-based payments’, where hospital and community healthcare providers would get paid to work together to improve patient outcomes, keeping patients well and out of hospitals.
Sebastian Habibi, Director in KPMG’s Healthcare team, comments:
“The incentives that help oil the current system are a legacy of the previous decade. The challenges facing the NHS now and for the foreseeable future require a focus on preventing ill health, supporting people to live independently in their own homes and keeping people out of hospital.
“This depends on increasing access to care and support outside of hospital and better coordination and care management for people with complex needs. To better align financial incentives with the aims of the NHS Five Year Forward View, we need to turn the payment system for hospital and community services completely on its head. In other words, we need to encourage a shift of resources towards improving prevention and increasing access to care and support in the community and away from avoidable hospital use.”
The report makes reference to New York State’s Medicaid reforms, which are successfully achieving this ambition.
Sebastian Habibi adds: “The Medicaid reforms are making continued growth in hospital admissions less and less profitable over time and this is helping to encourage hospital providers to collaborate in reducing avoidable hospital use.”
A future for Sustainability and Transformation Plans
Beccy concludes: “There is absolutely no doubt in my mind that the system-led STP approach is the right approach for delivering improvements to the NHS, so long as the programme is seen as the beginning of a journey away from short-term fixing and a move to longer term planning.
“As the Medicaid reforms in New York show, we need to address the financial incentives in the NHS. But the NHS has to invest in leadership development to help them deliver these changes effectively. I would go as far as to say that system leadership will be the single most critical factor in determining the success of the STPs.
“We need a different type of leader to take the NHS to where it needs to be. Leaders will have to put their local population’s needs before their organisation’s needs to be truly collaborative and sustainable. For this to happen successfully there needs to be investment in systemic leadership skills. These leaders will need to be able to show that they own the system plans and are prepared to be held accountable for systemic transformation.”
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The report can be accessed on KPMG’s website: https://home.kpmg.com/uk/en/home/insights/2016/10/take-me-to-your-leader.html.The observations and conclusions are partly based on publically available sources, and experiences in our Audit, Tax and Advisory practice. In addition, a survey was conducted among 25 CEOs of Acute Trusts and Foundation Trusts in England. Furthermore, interviews were held with seven eminent leaders in healthcare. The commentary in the report is based on personal opinions, and does not reflect the views of KPMG as a whole.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.