NHS reform: towards a more balanced change model?

There are rumours a new change model may be emerging for the NHS, including more devolution to systems, fewer central targets and the strengthening of financial performance incentives for individual trusts. While there is a huge distance between theory and practice, there is just a chance that reform could take us towards a better balanced and more dynamic system.

Before coming to the NHS Confederation, I spent fifteen years as CEO of the RSA. Throughout that time, I worked on a set of interlocking ideas about human motivation, policy making and organisational change, which I named ‘coordination theory.’

Coordination theory

My thinking was based primarily on the work of anthropologist Mary Douglas and her followers, but also incorporated research from sociology, psychology, policy studies and organisational development. It also reflected my experience in advocating for, and experimenting with, the ideas. In essence, the theory comprises the following propositions:

• Human beings have three core intrinsic motivations. These are mastery, connectedness and autonomy.
• In social life, these motivations are articulated as theories and methods of change: hierarchy (leadership, strategy, expertise etc), solidarity (values, belonging etc) individualism (self-actualisation, competition etc) and fatalism.
• Evidence indicates that organisations, systems and policies are more likely to be successful if they are able to both articulate and balance each of the three active forms, while acknowledging and managing fatalism.
• However, this is hard to achieve for several reasons. For example, each motivation/method has malign as well as benign forms. Hierarchical actors can be visionary, strategic, empowering but equally overbearing, micro-managing and self-serving. Furthermore, each motivation/method to some extent derives its power and legitimacy from its critique of the others.

So, what has any of this got to do with the NHS?

Most organisations lack a dynamic balance. Some are ‘monocultures’ in which one motivational system is dominant (think of the one-party hierarchy of communist regimes). But many more are ‘deficit cultures’ in which two systems are strong but one weak. Traditionally, the public sector – including public sector health systems – has presented a deficit culture, suffused with hierarchical and solidaristic motivation but weak on individualistic dynamism.

The legacy of New Public Management

This insight is what lay behind New Public Management (NPM), the dominant model of public service reform in most developed countries from the late seventies to quite recently. In essence, NPM was all about bringing the attitudes and methods of commerce into the public sector: contracting out, competitive tendering, performance related pay, quasi markets etc.

NPM failed. The model of individualism pursued was all about promoting a commercial mindset, not other, arguably more benign, aspects of that drive such as autonomy and creativity. And while stronger individualism implies a light touch, permissive hierarchy, in the NHS internal markets were implemented alongside a proliferation of targets and regulatory mechanisms.

The legacy of NPM is that today’s NHS remains very hierarchical in system and culture. However, the winding back of the internal market means an NHS again underpowered when it comes to individualistic motivations and methods.

It is a bit of a leap, but some of what is apparently being considered by politicians, policy makers and officials could be seen as an attempt to again address the lack of dynamic balance in the NHS.

…we must learn the lessons of the past, particularly on payment by results, which runs against the grain of integration

It seems that the government may want to build on NHS England’s own recognition of the need to devolve power (winding down hierarchy) by significantly reducing the number and range of targets and instructions emanating from the centre. This, we are hearing, may be accompanied by the CQC taking on an enhanced role in assessing ICSs and their capacity to deliver on their core objectives.

Alongside this, claims that aspects of payment by results may be reintroduced suggest an implicit recognition that individualistic tools still have a role to play in driving improvement and innovation.

Yet we must learn the lessons of the past, particularly on payment by results, which runs against the grain of integration. First, competitive and commercial incentives for organisations and professionals must be balanced with imperatives of collaboration and equity. And second, unleashing individualism in the NHS isn’t just about market mechanisms. How, for example, can we address a risk-averse, blame-fearing culture in which being brave, creative or entrepreneurial can often feel too dangerous even when it could clearly improve outcomes?

The role of intermediate institutions

Too often missing from accounts of the NHS as a change system is the role of intermediate institutions. They were, for example, entirely absent from the recent NHS England operating model document. These institutions, from Royal Colleges to the NHS Confederation, can shape values and culture (the solidaristic domain), instilling a commitment to collective learning and improvement.

Similarly, to maximise the scope for improvement in the NHS, its national leaders must see themselves not just as the primary source of hierarchical authority, but as guardians of a balanced, dynamic adaptive system which mobilises the power of collaboration, values and belonging on the one hand and competition, creativity and entrepreneurialism on the other, all in pursuit of a step change in the nation’s health outcomes.

A final point: these ideas within coordination theory have a fractal quality. What is true about a national system is true also of local systems (ICSs and places), providers and teams. At each level, success is most likely when we can give expression to, and balance, our core motivations and the dispositions and methods that mobilise them. 

The task of balancing the NHS as a dynamic improving system will always involve continuous craft-full adaptation. And – Chancellor please note - no way of working can overcome a fundamental mismatch between demand and capacity. Nevertheless, an NHS comprising a more focused, intelligent, enabling centre, local systems and places with the capacity to facilitate change, managed incentives for improvement and innovation, and a role for intermediate institutions to mobilise values of professionalism and public service, offers at least the ingredients for success.      

Matthew Taylor is chief executive of the NHS Confederation. You can follow Matthew on Twitter @FRSAMatthew