Simplifying general hospital services to make them more manageable is a route to solving the current healthcare crisis, say two healthcare experts at Cambridge Judge Business School.
Every day seems to bring fresh misery for the NHS – from the financial (the National Audit Office’s recent discovery that two-thirds of English trusts are in deficit) to the personal (rock-bottom morale and a long-drawn-out junior doctors’ contract battle). Radical problems call for radical solutions. Hospitals eat up a huge chunk of NHS spending, so how can they become more efficient?
Professor Stefan Scholtes
“Hospitals operate largely as they did 60 to 70 years ago,” says Stefan Scholtes, Dennis Gillings Professor of Health Management and Academic Director of the Centre for Health Leadership & Enterprise (CCHLE) at Cambridge Judge Business School.
“They are the point of last resort and they take everyone in. Over the past half century they have become hugely complicated organisations, to an extent that they are now unmanageable. Most hospital executives are fire fighters: they have neither compelling strategies nor convincing medium-term implementation plans.”
Why have hospitals become so complex? On the one hand, medical and surgical advances have led to a huge increase in the range of procedures that hospitals can offer. This very desirable innovation push leads to ever-increasing organisational complexity, unless it is counteracted by an outflow of simple, well-understood routine procedures to other providers that can focus on providing these procedures in the most effective and efficient way.
“Can you imagine Apple still selling its first-generation iPhone?” asks Scholtes. “They have long passed on this well-understood technology to other providers. They operate at the top of their capabilities and don’t bother with stuff that others can do just as well. Why don’t hospitals pass routine, well-understood services to large GP practices or specialised centres?”
There’s a constant tension, he says, between a typical NHS hospital’s dual roles as provider of both emergency and routine care. One prime example is elective hip replacements, in which a broken hip will take precedence over elective hip replacements – yet they inefficiently compete for the same hospital resources.
One answer? We have to open the tap and begin to separate some services out from the general hospital, to be delivered elsewhere. Two recent studies co-authored by Scholtes used data from the NHS and German hospitals to examine what happens if routine elective volume is reduced in hospitals. Both studies suggest an increase in quality and cost-efficiency for complex and emergency services that remain in the hospital, as well as the routine elective services that are separated out.
“What was interesting was that high service volume does actually make services more efficient and effective – but only for routine care,” says Scholtes. “If the patient’s case is complex, having a ‘factory’ is not the right approach. This is, again, an argument for separation.”
Higher volume can in fact lead to better care, agrees Dr Feryal Erhun, Reader in Operations Management at Cambridge Judge and former Instructor in Medicine at Stanford School of Medicine. “There are studies which show that high volume actually can lead to better care – not necessarily from the doctors, but because you streamlined your care process,” she says. “All the ancillary services around the clinicians enhance the quality of the service, so the service the patients receive gets better.”
This improvement to the system ends up being an improvement for patients, Erhun points out. Some patients may have to travel further, but there is an incentive built in: the specialist centre can treat them more quickly.
If such a separation is so logical, why isn’t it happening? There are three main reasons according to Scholtes and Erhun:
First, hospital managers rightly fear that the already strained financial model of their hospital will collapse if they lose profitable routine services that subsidise loss-making emergency and complex elective services. Second, doctors are reluctant to pass procedures on to other providers because routine services can drive clinical productivity when demand for specialist emergency and complex services is volatile and doctors can therefore fill otherwise idle time by attending routine services. Finally, there is the simple factor of professional inertia.
What is clear is that separating routine elective from complex and emergency services is in itself a highly complex endeavor. It will require careful case-by-case analyses and creative business modelling, as Erhun and colleagues observed in a smaller scale on a recent project on improving the value of elective surgical care.
And difficult decisions will need to be made, says Erhun, particularly around the role of the clinician. “It doesn’t have to be the doctor doing certain things any more. Many things could be done by technicians or nurses – providers should be employed at the top of their licenses. It’s not a demotion, it’s indeed a promotion – giving doctors the opportunity to do what they are doing the best.”