Process-led change is failing the NHS; culture change must come first

Article written by Dennis Bacon, Executive Chairman

Having sat on STP, QIPP and other system leadership groups over a number of years, I have been continually bewildered by the perceived value brought by management consultancies to the NHS and care system, mindful that ‘value for money’ should lie central to all decisions when it comes to taxpayer funded services. Some key questions need to be asked.

Firstly, why does the NHS, given its scale, require so much expensive management consultancy support? I for one remain unconvinced that management consultancies deliver value for money and would also suggest that a number of the requisite skills being purchased already exist within the system.

And secondly, are management consultancies actually delivering value for money? The Management Consultancies Association claim that for every £1 spent, there is a six fold return. As true as this claim may be for some sectors or specialisms, most evidence suggests that this is not true for the NHS. Conversely, Professor Andrew Sturdy, from the School of Economics, Finance and Management at the University of Bristol, argues that engaging management consultancies can often create more inefficiencies than those they’ve been brought in to tackle.

As recently as 2017 I sat in a meeting with a number of senior NHS and Local Authority exec’s discussing if support was needed from a ‘Big Four’ consultancy. After a majority decision was made to appoint the consultancy, a senior Healthcare partner was brought in to answer questions.  I felt compelled to ask two questions. Firstly, “Given that you have been engaged in – and completed – very similar pieces of work elsewhere in the country, are you able to pass on some of the knowledge and cost efficiencies you will have gained via a reduction in the (eye-watering) price quoted?” The answer to my question was “No, each area of the country is different”, meaning the efficiencies I had suggested were not possible to achieve. I was also keen to elicit an important disclosure around costs and asked about their charge out rates. The partner’s charge out rate was £10,000 per day!

Unsurprisingly, revenue growth for the ‘big four’ in the UK health market is significant. NHS Trust expenditure on consultancies in 2015/16 topped £300 million, but this doesn’t account for CCGs or other services commissioned separately. Despite this, senior people from consultancy firms will often admit (in private) that their biggest challenge, once any time-limited piece of work is complete, is being confident that any improvements will have a lasting impact. I have been told too often that once the initial ‘honeymoon period’ is over, a reversion to the ‘old way’ occurs. I am therefore left thinking that health services need to be more reflective. If taking on expensive management consultancies to solve their problems isn’t working, they must challenge their own assumptions about what is required. Encouragingly, NHS Improvement is now seeking to help health services improve the procurement of such services, which is good news.

To my mind, the big challenge is in identifying the right consultancy for a specific piece of work that the health service needs, but doesn’t have the skills or capacity to deliver themselves. This may mean looking farther afield than the large professional services firms. It will also involve being courageous, working with those that have innovative solutions and are prepared to work for much less. The system shouldn’t continually default to Deloitte, KPMG, PwC, EY and the like.

Our health system seems overly obsessed with systems and processes as the means by which we improve performance and manage risk. Whilst there is little doubt that we need sensible structures, systems and incentives to play their part within  an increasingly beleaguered system, inquiries into the most serious failures (e.g. Mid-Staffs, Winterbourne View, Southern Healthcare, Morecambe Bay and Liverpool Community Health) cite culture as the root cause. Culture is all about behaviour. It is about bringing espoused values to life, in the workplace. If we invest in people and culture, we can drive quality and efficiency and make our health system the most attractive place to work in the world. Only by doing this will the system stand a real chance of delivering sustainable, high-quality health care well into the 21st Century and beyond.

11th July 2018