Friday, April 20, 2007

Playing Post Offices... With Our Money

No way to run the Casdon 532

Of a wet childhood afternoon, there was nothing I enjoyed more than playing Post Offices.

If you've never tried it, you're in for a treat. Set aside next weekend, and get yourself an official Post Office set (such as the somewhat bizarrely named Casdon 532, above). You'll get sheets of stamps, proper licky envelopes, lots of forms, piles of pretend money, and best of all, a real rubber stamp with an ink-pad. Lay it all out on your counter- everything in its right place, mind- and then get to work on official business. A form completed and stamped here, an envelope sealed and stamped there- the weekend will simply fly by.

Just one word of advice: do not on any account allow anyone else to join in. Especially if they want to be your "customer". Trust me. Post Offices do not work once customers start getting in the way. They take all the fun out of it.

"Staff" are nearly as bad. They never do what you tell them, and they mix up all the forms. Sometimes they even use the stamp without asking you!

I'm reminded of all this because I've just read yesterday's National Audit Office Report on the Department of Health's disastrous pay deal for NHS consultants. The NAO seems somewhat at a loss to explain just wtf the DoH thought it was doing, giving all that money away and getting sfa in return. But I immediately recognised they were only playing Post Offices.

The depressing facts were widely covered in the media yesterday:
  • Thanks to yet another Simple Shopper NHS "new contract" pay deal, hospital consultants got a 25% pay rise for doing less work
  • Once again costs were wildly understimated- at least £715m vs a forecast £565m- which has contributed to the deficit crisis

The pay facts are summarised here:

Click image to enlarge

So since we now employ 32,000 consultants, the annual bill comes out at nearly £4bn pa (including employers' contibutions).

Good luck to the consultants, we say- who wouldn't take a deal like that if offered? But bad luck for us taxpayers. And as the NAO report makes clear, to savour the full grisly picture, we need to view the pay deal in its broader context.

Since 2000, the number of NHS consultants has soared by about one-third, from 24,400 to 32,000. And their paybill has doubled, from £2bn to £4bn. Yes, of course, that was all part of the Grand Plan to save the NHS. But guess what. While consultant numbers and pay have soared, their productivity has slumped.

The following chart shows output per consultant:

Now, the man from the BMA spent yesterday telling us that measuring consultant productivity is dashed tricky. And of course it is. But a near 15% slump in headline output per consultant in just 4 years kinda jumps off the page. And that's backed up by the NAO survey which shows over half of NHS consultants think the new arrangements leave them less time for clinical care.

Which brings us to Post Offices.

As with all the government's other half-baked NHS "reforms", this new contract was landed on hospital managements by the Big Chiefs in Whitehall and Westminster. There was very little consultation about what was practical, or even feasible, down in the actual hospitals.

Yet according to the DoH, the fundamental reason for giving all the extra pay was to get consultants to accept "job planning". By which they meant that for the first time since the NHS was founded, consultants would agree to have their work managed from above, by hospital mangers. Just like a real business. Sort of idea.

The theory was that consultants would sit down with their boss and agree individual work plans setting out what they were meant to be doing. Thus everyone could be sure it would fit with the overall needs of the business, and individuals could be subject to regular reviews and appraisals. Just like it says in the management textbooks.

But of course the real world isn't quite that simple. For a start, the theory assumes you've got managers who are actually capable of translating high level corporate wibble into meaningful job plans. Even when they get no practical help from the Big Chiefs. And second, it assumes the managers are capable of getting the staff to accept the top-down priorities.

In the NHS, neither of those assumptions holds. Thus, while the NAO found that most consultants do now have job plans, they are only plans in the sense of being forms headed "Job Plan". Their content is generally little more than a diary exercise where the consultant has recorded what he/she is already doing; they are not tools for articulating current management priorities and directing work.

It's Post Offices. The forms are all there- completed, signed, stamped, and correctly allocated to the appropriate pile. just like the ones you get with the Casdon 532. Great for shuffling around and looking "official", but totally useless for running a business.

The bottom line is that we taxpayers are now spending twice as much on consultants as we did in 2000, but we're only getting 15% more output. Working practices have not been reformed, productivity has slumped, patient care has not been improved, and "consultants' morale has been reduced" (NAO survey).

In fact the only positive outcome seems to be a pile of forms. Another one.

What a pity the DoH didn't just treat the hospitals to a few Casdon 532s instead. They could have got even more forms filled in, yet saved us taxpayers a packet.

PS The NAO report also contains an analysis of international pay comparisons for consultants. Ill blog that separately.


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