What do NHS managers contribute?

Key points

• Efficiency, quality and patient satisfaction improve with an increase in management-to-staff ratios.
• Even a small increase in the proportion of managers employed (from 2 to 3 per cent of the workforce in an average acute trust) has a marked impact on performance.
• Clinicians working productively with managers in senior management teams and on boards have a clear impact on improved clinical outcomes.
• Negative media and political narrative about NHS managers could result in policies which fail to develop management capacity in future and, in the process, exacerbate clinical workforce shortages and wider efforts to improve services.

Introduction

The idea that managers in the NHS are unlikely to add value is widely held and persistent. Some sections of the national media and some politicians have regarded managers at best as irrelevant to the delivery of health services, and at worst as an unproductive overhead ‘leeching cash away from frontline medical staff.'  ¹

In the first long read in this series, we challenged the idea that the NHS is ‘overmanaged’. We noted that managers make up only 2 per cent of the NHS workforce, far lower than for the economy as a whole (9.5 per cent). Here, we address two further questions: what do managers contribute and why is investment in management and leadership essential in securing productivity, quality and reform?

Do managers make a difference?

Let’s start by looking at the evidence. Although the research on this topic is limited and the results mixed, on balance there are good reasons to argue that NHS managers make a positive contribution to performance.

A much-publicised example of where managers add value is the work of Bloom and Van Reenen.  ²  In collaboration with the global management consulting firm, McKinsey & Co., these authors developed a 20-point scale of management practises. Although designed initially for manufacturing, this survey has been applied to over 2,000 hospitals (public and private) in nine countries (including the UK). The results show that high management scores correlate strongly with clinical outcomes and a range of financial outcomes (including profitability).

Even a small increase in the proportion of managers employed had a marked impact

Our own research confirms this picture.  ³  In a study published in 2019, focusing on 150 NHS acute hospital trusts (essentially the whole population in England) over six years, we looked at the relationship between managers and performance.  ⁴  We found that even a small increase in the proportion of managers employed (from 2 to 3 per cent of the workforce in an average acute trust) had a marked impact.

Up to a certain point, larger management functions in trusts were associated with higher patient satisfaction scores, a 5 per cent rise in hospital efficiency and a 15 per cent reduction in infection rates. Further tests revealed that it was primarily higher levels of managers employed that drove these improvements and not the other way round.

Recently these conclusions have been called into question by a study published by a team of academics at the London School of Economics.  ⁵  Focusing on a sample of 129 acute trusts over seven years, the authors find ‘no evidence of association either between quantity of management and management quality or directly between quantity of management and any of our measures of hospital performance’.

However, the fact that none of the main tests conducted by the LSE team revealed any statistically significant results (either positive or negative) raises concerns about the statistical power of their analysis. The study also focused on a narrower population of NHS organisations (just non-specialist trusts) and of managers (excluding medical managers from the sample). For these reasons, we are confident that on balance the weight of evidence still supports the argument that managers do make a positive contribution to performance.

Clinical managers and performance

Further research has shown that increasing the diversity of managers to include clinical professionals may also improve performance.  ⁶  As we saw in the first long read, a significant proportion of NHS managers have these ‘non-traditional’ career backgrounds, often splitting their time between clinical work and management.

NHS hospital trusts achieving the highest quality ratings had a higher proportion of directors with a medical background than those achieving the lowest ratings

The example of high-performing health systems around the world, such as Intermountain Healthcare in the US, shows that these ‘hybrid’ (or part-time) managers can have a profound impact on decision-making and outcome.  ⁷  This is notably the case when clinical professionals join the boards or senior management teams (SMTs) of healthcare organisations.    ⁸  Focusing on the top 100 hospitals in the US, Amanda Goodall found that having a chief executive with a medical background generates greater quality improvements and results in higher hospital rankings.  ⁹  

Our own research has confirmed and extended these arguments. In a study conducted in 2011, using three years of data (2006/7 to 2008/9) we found that NHS hospital trusts achieving the highest quality ratings (level 4) had a higher proportion of directors with a medical background (15.01 per cent) than those achieving the lowest ratings (11.09 per cent).  ¹⁰  This research also noted positive outcomes for hospital mortality rates and patient experience scores.  ¹¹

Recently we repeated this analysis and found that medical managers continue to have a significant impact. Focusing on 128 acute trusts in the English NHS over five years (2013-2017), we looked at the difference between those trusts with only one doctor involved in the senior management team (the medical director) and those with more than one doctor.  ¹²  The study showed that the benefits of having more doctors involved are considerable: reducing the infection rates by 15 percentile points from the median value and increasing the patient experience scores by 15 percentile points from the median value.

These findings are partly explained by the credibility of ‘expert leaders’, such as doctors and nurses, and the unique skills and insight they bring to management decision-making.  ¹³  They also highlight the importance of greater engagement and collaboration between clinical professionals and managers more generally.  ¹⁴  In our earlier work we found that such collaboration was critically important, helping to foster ‘productive relationships’ in NHS organisations which lead to service improvement.  ¹⁵

Overall, these findings are testimony to the value of clinical leadership which, in recent years, has moved from the ‘dark side to centre stage’.     ¹⁶  More importantly they question the cynical view that because management makes no difference, clinical professionals who get more involved in management are wasting their time.

Why is the contribution of NHS managers still questioned?

So, given this powerful and growing body of evidence, why do many people still question the value of investing in managers? We can think of two main reasons:

1. The belief that NHS managers are weighed down by regulation and pressure to meet top-down targets;
2. The view that NHS managers are self-serving and focused on empire building.

Neither of these assumptions stand up to scrutiny.

There is a dominant view that unlike their counterparts in the private sector, managers in the NHS are simply too constrained by bureaucracy to make any real difference. As the team of academics from the LSE, mentioned earlier, concluded: ‘it may be that NHS management is largely confined to… administrative roles, ensuring regulatory standards and requirements are met rather than inherently improving performance’.  ¹⁷

This view suggests that managers in the NHS are essentially powerless in the face of stifling bureaucracy and top-down demands. The chief executives of NHS trusts, for example, may become ‘little more than conduits for the policies of the centre’, fixated with ‘saving the hierarchy’.  ¹⁸  This is especially when their jobs are on the line.

According to Ed Smith, former chair of NHS Improvement: ‘If you live in a country where the firing squad is the basis of encouraging people to step up and take risk you’re not going to get people appearing to innovate, wanting to improve because they know what’s coming.  ¹⁹  The fact that the average tenure of chief executives in English acute trusts is only 4.5 years compared with 7.2 years for large private firms in part reflects this pressure.  ²⁰

In the worst case, overbearing regulation could lead to ‘hierarchical cultures’ in NHS organisations that are narrowly focused on financial viability.  ²¹  It is notable that the 2013 Francis report into failures of care at Mid-Staffordshire NHS Foundation Trust cited cost-cutting by management as a significant factor, alongside poor collaboration. Senior managers were accused of being preoccupied with ‘targets and processes’ and losing sight of their ‘fundamental responsibility to provide safe care’.  ²²

Managers play a critical coordination role, helping to ensure that all the many parts of the NHS move in sequence

The second and even more critical view of NHS managers originates from public choice theory. As we saw in the first long read, this assumes that managers, like bureaucrats, are primarily self-interested. Following the predictions of Parkinson’s Law, it is argued that managers will seek to push up their own budgets and numbers regardless of the quantity of work that needs to be undertaken.  ²³  As Max Pemberton (himself a doctor), wrote in the Daily Mail: ‘Put a manager in a room with a clipboard and they will find work’.  ²⁴

As we have seen, these wholly negative depictions of management are not supported by the evidence. Nor do they fully grasp the motivations of managers in the NHS (or indeed other public services) and what they actually do.

For instance, critics give little attention to the role of managers helping to support and coordinate the work of frontline professionals in ways that ultimately ‘keep the show on the road’. Looked at in this way, reducing the number of managers will hardly be beneficial as more of this coordination work (including backroom administration) falls on the shoulders of doctors, nurses and other professionals.

Primary care networks (PCNs) are a case in point. When they were first set up, because the only funded ‘management’ post was a part-time clinical director (usually a GP) this created a significant administrative workload for busy clinicians. It is only now, two years on from their creation, that PCNs are finally able to recruit substantive managers. And even this may be inadequate given the increased contracting responsibilities of PCNs. Most managers are still only employed in part-time roles, with no guarantees of long-term funding.  ²⁵

Managers therefore play a critical coordination role, helping to ensure that all the many parts of the NHS move in sequence. Indeed, to appreciate the value of this work, one only has to look back to a time when the NHS didn’t have any managers. Studies from the 1970s showed that this was far from ideal, with spiralling costs, large unwarranted variations in service availability and quality and powerful medical interests holding back key reforms and improvements.  ²⁶

Managers can take a system-wide view and provide the analysis that drives and sustains improvement in ways that are beneficial to patients and taxpayers

A very similar picture applies today in some areas of the US, where spending on healthcare varies widely. The town of McAllen in Texas, for example, has one of the highest costs per person on healthcare and the least number of managers. Doctors were doing every procedure possible, even though many were unnecessary, partly because there was no oversight or standardisation.  ²⁷

It is of course true that NHS managers are more constrained by regulation and have less autonomy than their counterparts in the business world. This is understandable given the publicly funded nature of the NHS. However, it does not mean that managers are simply glorified administrators with no scope to affect change.

When managers are doing their job properly, they can take a system-wide view and provide the analysis that drives and sustains improvement in ways that are beneficial to patients and taxpayers. For example, managers contribute directly to ‘high-quality administration’ in the NHS, which ‘has the potential to improve patient experience, reduce inequalities, and promote better care'.  ²⁸  By supporting clinical leaders they are also an essential part of what Richard Bohmer describes as ‘the hard work of healthcare transformation’.  ²⁹  Far from being powerless, managers can make a real difference.

Nor is it right to assume that NHS managers are wholly motivated by empire building. Our own research finds no evidence to show that high numbers of managers employed by acute trusts will lead to rising employment of managers in future.  ³⁰  Other studies highlight the strong public service ethos that motivates NHS managers and their deep commitment to enhancing quality and patient care.  ³¹  Such qualities are doubly important when one considers the pressures that NHS managers face and their lower pay compared to the private sector. It is also notable that even when NHS organisations employ more senior managers who have commercial backgrounds, this has no detrimental impact on the quality of services.  ³²

Valuing the contribution of NHS managers

It is then time to dispel the myths and change the narrative about NHS managers. The stereotype of powerless administrators and self-serving bureaucrats is both misleading and potentially very damaging. This is especially as the NHS struggles with resource constraints in the aftermath of the pandemic. A declining willingness of policymakers to invest in management will slow down the implementation of key reforms. It might also exacerbate the clinical workforce crisis, making it harder and more stressful for clinicians to do their jobs without administrative support.

More than ever, desperately needs world-class management

All this of course is not to deny that managers sometimes get things wrong, or that there is scope to regulate and improve their practice. We will investigate those concerns in the final long read in the series. It is however important to acknowledge that NHS managers ‘play critical, yet undervalued institutional roles’.  ³³  Managers are not an unproductive overhead ‘leeching resources from the frontline’. Nor is investing in management and leadership a waste of time. On the contrary, the challenges facing the NHS as a result of the pandemic mean that the NHS, more than ever, desperately needs world-class management.

About the authors

Prof. Ian Kirkpatrick is professor of public management at the University of York.

Prof. Becky Malby is professor of health systems innovation at London South Bank University.