We had a discussion yesterday about Scotland that took us on to the NHS. I am sure those who believe competition is good for the NHS and that the private sector could do better mean well but bluntly if you believe this you need to rethink it. Please believe me I know. I have a hard earned qualification in Healthcare Management and was properly trained to understand it. Nowadays people growing up in careers do not have the benefit of that training. All sorts of people are now running healthcare from a variety of backgrounds. Anyway, back to the issue.....This is by the excellent Roy Lilley an expert commentator on the NHS who must feel like he is shouting into a void. I received it this morning which was very timely and it is about Serco. If you dont know who they are they are a huge company who will offer to do anything but they are not stupid:- Here are two aphorisms about business that have stood me in really good stead over the years. • The business of business is the avoidance of risk. • There is no sweetness in nothing. People whove never run a business think businesses like risk. Wrong; no business carries more risk than it absolutely has to. Business is risk averse. Sweetness? If you cant make a margin, get out. If there is no profit in a business dont do it. Operating at a loss is a mugs game. Working at break-even for a controlled period, maybe. Otherwise if you run at a loss you screw-up your cash-flow, increase your borrowings and watch your liabilities push a profit out of reach. I know these two adages to be rock solid true. And, if you ignore them you run the risk of screwing up your good name. Building a brand, what you stand for, is a number one priority. If you are short of money youll cut corners and knock chunks off your brand value. Businesses delivering hands-on clinical care for the NHS run a huge risk. The tariff is tightening, service delivery is tailing off, regulatory demands are becoming unmanageable and the consequences of poor workforce planning coming home to roost. Against this background I was not in the least bit surprise to read the Stock Market announcement that Serco is pulling out of their clinical, NHS contracts. Theyve lost £18m to date. This is a wise and sensible decision for Serco. They are a public company and cannot continue to risk shareholder and brand value. It is also deeply troubling for a privatising coalition. This decision will reverberate across the private sector who will think twice about market entry. The Dept. of Health will be in a flap not knowing how to replace the capacity. Why should the private sector be any better at running NHS services than the NHS? The simple answer is; it isnt. We know CircleBrook have had bungs to keep going. Because NHS staff come to work and wear a different badge does not make the systemic problems of the NHS go away. There are too many patients and not enough money. Sustainability is as much of a problem to the private sector as it is the NHS. What about Virgin? They are a private company and we will never know what their books look like. I can take a guess. Their balance sheet is the same colour as their logo. They will be suffering just like Serco and Circle and the rest of the NHS. It seems to me Virgins philosophy is; if you can grab enough market share two things happen. Economies of scale will release cash for a margin and over time that margin will release a profit. Second, market dominance. Boss the market and you can dictate the price and terms. If it is, its wrong; neither of these two philosophies work in health. Releasing a 5% efficiency gain on a contract running at a loss is not a 5% profit. The only reward for market dominance in health means doing more for less; global funding is capped and politics makes a mess of the rest. History would seem to be telling us grab and boss dont go so well! Whats happened to Virgin Cola, Virgin Casino, Virgin Brides, Virgin Cosmetics, Virgin Clothing, Virgin Cars, Virgin Underwear, Virgin Megastore, Virgin Records, Virgin Flowers, Virgin Pulse, Virgin Charter, Virgin Student. If Virgin do a Serco and it would make sense, there will be a huge gap on the supply-side and there is no plan B. All the Dept. of Health could do is throw money. Over the last two weeks we have talked about the mess that primary care has got into and last week how the neglect of mental health is reaping a terrible harvest. Politicians look powerless. Dan Poulter is joke figure and the least impressive minister I have seen in over 30 years of health watching. Norman Lamb, nice man that he may be, looks completely out of his depth; he stands, wringing his hands, in the smoking ruins of the services he is responsible for. This is the worst health team I have seen since 1974 but it doesnt matter because Labour is worse. They are yet to lay a glove on any minister or any policy. Both parties confuse fire-fighting with policy and carping with critique. The NHS exists in a strategic vacuum. What are we working towards? What are the goals and what is the vision? What exactly is our nations health policy other than a wish-list, shopping list or another to-do-list. Safe, accessible, compassionate are not policies they are foundation stones. The building blocks are missing; where what and how. What does the future look like? There are urgent matters to address; post 2015 funding, sustainability of the system, the shape of primary care,the viablity of secondary care, paucity of IT, crippling workforce shortages, eroding confidence in NICE, the moribund inspection regime, failure of public health, a faux-market, eroding and corroding morale at the front-line, relationships with the private sector, widening differences between health and social care, and the overwhelming numbers of people turning to the NHS for help. Is there no one with the nouse, grasp of the issues, practical acumen, voice, determination or vision to make a sensible decision about the future of healthcare... with the exception of Serco.
Posted on: Fri, 22 Aug 2014 08:29:03 +0000
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