Hospital chains. Their role in the future of the NHS. Click to launch

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1 Hosptal chans Ther role n the future of the NHS Clck to launch

2 Hosptal chans context and background As one of the most renowned health systems n the world, developng new models of care s not somethng that comes easly to the NHS for cultural and poltcal reasons. Momentum s buldng for transformatonal change to the NHS organsatonal model. The prncpal drvers for ths are: NHS Fve Year Forward Vew Dalton Revew (Examnng new optons and opportuntes for provders of NHS care) Carter Revew (of Operatonal Productvty n NHS provders) These publcatons poston hosptal chans as an nnovatve, credble and collaboratve model of healthcare delvery for the NHS. The hosptal chan model boasts sgnfcant successes nternatonally and s startng to gan tracton n the NHS. Drectly referenced n the NHS Fve Year Forward Vew and the Dalton Revew, the German experence of chans has been the most wdely dscussed and postve. A team from PwC went to Germany to see hosptal chans frst-hand. Next Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

3 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Leadershp Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

4 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Leadershp A hosptal chan s a group of hosptals operatng under the same centralsed strategc leadershp. A chan could be publcly or prvately owned. All stes n the chan are managed for the group by a devolved management team that have delegated decson-makng responsbltes for ther own hosptal(s). They operate wthn the parameters set by the overarchng chan leadershp. Dstngushng features may nclude: group headquarters; standardsed governance, protocols and procedures; and centralsed back-offce functons Effcency (e.g. HR, Fnance, Procurement, Legal, Meda, Communcatons and PR). Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

5 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Leadershp Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

6 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Leadershp Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

7 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Leadershp Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

8 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans key features The key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Leadershp Clck the cons to explore the key features of the hosptal chan model. What s meant by a hosptal chan? Leadershp Effcency Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

9 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. What s meant by a hosptal chan? Leadershp Effcency Jeremy Hunt, Secretary of State for Health, commssons Sr Davd Dalton to conduct a major revew of new organsatonal models for the NHS at a tme where Conservatve commentary and polcy thnk tanks are dscussng the vrtues of hosptal chans. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

10 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Aprl 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Jeremy and Hunt, fnancal Secretary of State sustanablty for Health, ssues. commssons Sr Davd Dalton to conduct a major revew of new organsatonal models for the NHS at a tme where Conservatve commentary and polcy thnk tanks are dscussng the vrtues of hosptal chans. What s meant by a hosptal chan? Leadershp Effcency New NHS CEO Smon Stevens brngs clear polcy drecton on the future of the NHS. He s the catalyst for a groundswell of movement towards NHS transformatonal change. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

11 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Aprl 2014 October 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Jeremy and Hunt, fnancal Secretary of State sustanablty for Health, ssues. New NHS CEO Smon Stevens brngs clear polcy commssons Sr Davd Dalton to conduct a major revew of new organsatonal models for the NHS at a tme where Conservatve commentary and polcy thnk tanks are dscussng the vrtues of hosptal chans. What s meant by a hosptal chan? drecton on the future of the NHS. He s the catalyst for a groundswell of movement towards NHS transformatonal change. Leadershp Effcency NHS Fve Year Forward Vew s publshed. It emphasses that new care models are absolutely needed. The motvaton s to fundamentally transform the way care can be sustanably delvered and to radcally change the approach to preventon and wellness. The focus snce ts publcaton has been on the new models of care to be prototyped through the Vanguard programme: Multspecalty Communty Provders (MCPs); ntegrated Prmary and Acute Care Systems (PACS); addtonal approaches to creatng vable smaller hosptals; and models of enhanced health n care homes. German hosptal chans are drectly referred to n the NHS Fve Year Forward Vew. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

12 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Aprl 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. What s meant by a hosptal chan? Leadershp New NHS CEO Smon Stevens brngs clear polcy drecton on the future of the NHS. He s the catalyst for a groundswell of movement towards NHS transformatonal change. October 2014 December 2014 The NHS Fve Year forward Vew s publshed. It emphasses that new care models are absolutely needed, to not only fundamentally transform the way care can be sustanably and effectvely delvered but to also radcally change our approach to preventon and wellness. The focus snce ts publcaton has been on the new models of care to be prototyped through the vanguard programme: Multspecalty communty provders (MCPs); ntegrated prmary and acute care systems (PACS); addtonal approaches to creatng vable smaller hosptals; and models of enhanced health n care homes. German hosptal chans are drectly referred to n the Fve Year Forward Vew. Effcency The Department of Health commssoned Dalton Revew (Examnng new optons and opportuntes for provders of NHS care) s publshed, provdng optons of new models. It sgnposts provder organsatons to consder new and nnovatve solutons to address the challenge of both qualty and fnance, whch have never been greater. German hosptal chans are featured throughout. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

13 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Aprl 2014 October 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Jeremy and Hunt, fnancal Secretary of State sustanablty for Health, ssues. New NHS CEO Smon Stevens brngs clear polcy commssons Sr Davd Dalton to conduct a major revew of new organsatonal models for the NHS at a tme where Conservatve commentary and polcy thnk tanks are dscussng the vrtues of hosptal chans. What s meant by a hosptal chan? Leadershp drecton on the future of the NHS. He s the catalyst for a groundswell of movement towards NHS transformatonal change. The NHS Fve Year forward Vew s publshed. It emphasses that new care models are absolutely needed, to not only fundamentally transform the way care can be sustanably and effectvely delvered but to also radcally change our approach to preventon and wellness. The focus snce ts publcaton has been on the new models of care to be prototyped through the vanguard programme: Multspecalty communty provders (MCPs); ntegrated prmary and acute care systems (PACS); addtonal approaches to creatng vable smaller hosptals; and models of enhanced health n care homes. German hosptal chans are drectly referred to as a potental model the NHS could adopt December 2014 The Department of Health commssoned Dalton Revew (Examnng new optons and opportuntes for provders of NHS care) s publshed, provdng optons of new models. It sgnposts provder organsatons to consder new and nnovatve solutons to address the challenges of qualty and fnance both of whch have never been greater. German hosptal chans are featured throughout. May 2015 Effcency NHS England CEO Smon Stevens announces that Montor, the NHS Trust Development Authorty (now jontly referred to as NHS Improvement) and NHS England wll be takng forward the work on hosptal chans produced by Sr Davd Dalton last year. NHS England wll test new ways of sustanng smaller hosptals, ncludng chans runnng acute servces, n ts latest vanguard programme. NHS England then announces that t s expandng the Vanguard project to nclude the entre acute sector no longer just vable smaller hosptals. The project ams to develop a natonally replcable hosptal chan model opton for Trusts and Foundaton Trusts. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

14 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton A tmelne the buldng hosptal chans narratve The four key features of hosptal chans hghlghted Tmelne below are Clck the foundatons to progress for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. February 2014 Aprl 2014 October 2014 Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Jeremy and Hunt, fnancal Secretary of State sustanablty for Health, ssues. New NHS CEO Smon Stevens brngs clear polcy commssons Sr Davd Dalton to conduct a major revew of new organsatonal models for the NHS at a tme where Conservatve commentary and polcy thnk tanks are dscussng the vrtues of hosptal chans. What s meant by a hosptal chan? Leadershp drecton on the future of the NHS. He s the catalyst for a groundswell of movement towards NHS transformatonal change. The NHS Fve Year forward Vew s publshed. It emphasses that new care models are absolutely needed, to not only fundamentally transform the way care can be sustanably and effectvely delvered but to also radcally change our approach to preventon and wellness. The focus snce ts publcaton has been on the new models of care to be prototyped through the vanguard programme: Multspecalty communty provders (MCPs); ntegrated prmary and acute care systems (PACS); addtonal approaches to creatng vable smaller hosptals; and models of enhanced health n care homes. German hosptal chans are drectly referred to as a potental model the NHS could adopt December 2014 The Department of Health commssoned Dalton Revew (Examnng new optons and opportuntes for provders of NHS care) s publshed, provdng optons of new models. It sgnposts provder organsatons to consder new and nnovatve solutons to address the challenges of qualty and fnance both of whch have never been greater. German hosptal chans are featured throughout. May 2015 NHS England CEO Smon Stevens announces that Montor, the NHS Trust Development Authorty (now jontly referred to as NHS Improvement) and NHS England wll be takng forward the work on hosptal chans produced by Sr Davd Dalton last year. NHS England wll test new ways of sustanng smaller hosptals, ncludng chans runnng acute servces, n ts latest vanguard programme. It s the announced that NHS England s expandng the scope of ts vanguard project to tral new care models, to encompass the vablty of the entre acute sector no longer just vable smaller hosptals. Essentally, the project ams to develop a natonally replcable hosptal chan model opton for Trusts and Foundaton Trusts. June 2015 Smon Stevens confrms the frst three areas to be part of a new whole health economy success regme : North Cumbra, Essex, and Northern, Eastern and Western Devon. Effcency It s announced that the Carter Revew, a landmark revew of NHS productvty, wll produce a new measure for ratng every hosptal n England on the effcency wth whch t uses staff and resources. All hosptal trusts wll be gven ndvdual savngs targets, to begn delverng from January The nature of the Effcency Challenge as descrbed by Carter gves sgnfcant weght to the espoused benefts of a hosptal chan model. The polcy narratve has been developng snce Is now the rght tme for hosptal chans adopton? Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

15 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Drvers the need for transformatonal change The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Shrnkng budgets, the drve for qualty, organsatonal change fatgue, dgtal customer expectatons the challenge has never been greater. Clck the cons below to explore how hosptal chans can address the challenge currently facng the NHS across these drvers. Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Drvers What s meant by a hosptal chan? Leadershp Fnancal Qualty Effcency Cultural Dgtal Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

16 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Drvers the need for transformatonal change The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Shrnkng budgets, the drve for qualty, organsatonal change fatgue, dgtal customer expectatons the challenge has never been greater. Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng Drvers mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Fnancal What s meant by a hosptal chan? Snce the ncepton of the NHS, health expendture has ncreased by an average of 3.8% year-on-year n real terms. Government spendng over the last four years has seen much lower growth, around 1% per year. In order to contnue to meet demand wthn ths budget, the NHS secondary care sector has been expected to acheve a 4% effcency target year-on-year, hstorcally however t has only acheved 0.8% annually. Leadershp NHS Trusts n England reported a defct of 2.26 bllon n the frst nne months of Ths compares wth a total defct of 822m n and 115m the prevous year. Whereas 42% of trusts forecast a defct at the end of the last fnancal year, over 70% reported a defct n Q The 2015 Spendng Revew announced 10 bllon real terms ncrease n NHS fundng n England between and , of whch 6 bllon wll be delvered by the end of Ths leaves the NHS wth the challenge of fndng 22 bllon of effcency savngs by 2021, requrng unprecedented productvty mprovements. Effcency Is the tme now rght for the NHS to consder hosptal chans to address ths fnancal challenge? Clck here to fnd out more about how hosptal chans can address the fnancal challenge facng the NHS Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

17 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Drvers the need for transformatonal change The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Shrnkng budgets, the drve for qualty, organsatonal change fatgue, dgtal customer expectatons the challenge has never been greater. Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng Drvers mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Qualty What s meant by a hosptal chan? The Publc Inqury nto care falngs at Md Staffs Hosptal lves long n the memory and the qualty agenda remans more mportant than t has ever been. Leadershp Effcency Not all NHS provders have mproved at the same rate however, resultng n varaton n qualty of care across the country. The Keogh Revew and most recently the Care Qualty Commsson s (CQC) State of Care report outlnng the results of the Chef Inspector of Hosptals qualty nspectons, have emphassed the unacceptable varaton n care and the need for provders to tackle ths n a more systematc way. Consstency of clncal standards s affected by ssues ncludng governance, leadershp and fnancal vablty and the factors drvng these are many and vared. Hosptal chans have the potental to address fnancal and operatonal dffcultes. Are qualty and patent safety mprovements perhaps more convncng arguments for adoptng hosptal chans? Clck here to fnd out more about how hosptal chans can address the qualty challenge facng the NHS Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

18 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Drvers the need for transformatonal change The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Shrnkng budgets, the drve for qualty, organsatonal change fatgue, dgtal customer expectatons the challenge has never been greater. Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng Drvers mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Cultural What s meant by a hosptal chan? Recent hgh-profle top-down reorgansaton efforts have left frontlne NHS care professonals dsllusoned and ncreasngly fatgued by mposed change. Leadershp Wthout transformatonal change however, NHS provders wll not be able to make the mprovements requred and wll not be able to assure clncal and fnancal sustanablty of servces. The rsk of nerta dong nothng s perhaps the greatest rsk of all. How can hosptal chans address the cultural challenges posed by the NHS? Is hosptal chans adopton a step too far for a workforce already fatgued by top down organsatonal reform? Effcency Clck here to fnd out more about how hosptal chans can address the cultural challenge facng the NHS Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

19 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Drvers the need for transformatonal change The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Shrnkng budgets, the drve for qualty, organsatonal change fatgue, dgtal customer expectatons the challenge has never been greater. Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng Drvers mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Dgtal What s meant by a hosptal chan? The tradtonal dvde between prmary care, communty servces and hosptals s ncreasngly a barrer to the personalsed and coordnated health servces patents need. GPs and hosptals tend to be rgdly demarcated, so too are socal care and mental health servces even though people ncreasngly need all three. Leadershp Effcency The NHS wll ncreasngly need to dssolve these tradtonal boundares and at pace. Long term condtons and co-morbdtes are now a central task for the NHS; carng for these needs requres a partnershp wth patents over the longer term rather than provdng sngle, unconnected epsodes of care. The dgtal revoluton has created fundamental and rreversble changes to our way of lfe. Those changes are partcularly apparent n the health sector and, dgtally enabled servces are a vtal element n the strategy that the NHS s usng to head off the 30bn defct expected by As the proporton of the dgtal natve and dgtal convert populaton contnues to grow, the majorty of the populaton are ncreasngly expectant that servces are talored to our specfc needs. Patent expectatons of care delvery and care management are rapdly changng. How s the organsatonal model of care gong to change n lne wth ths? Are hosptal chans an approprate response to the needs of a dgtal patent and a dgtal workforce? Clck here to fnd out more about how dgtal technology can enable hosptal chans adopton Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

20 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton German hosptal chans facts and fgures The four key features of hosptal hghlghted German below hosptal are the foundatons chans for drvng mproved qualty outcomes and addressng operatonal A bref hstory and fnancal sustanablty ssues. Clck The the development cons to explore of the chans key features of hosptals of the n Germany started more than ten years ago. It came n response to a number of concurrent factors requrng hosptal provders chan to model. adapt These servce are the delvery foundaton to changng for populaton and market needs to reman sustanable and compettve. drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Therefore, whle both the German and UK health systems have The key drvers behnd the emergence of hosptal chans wthn the German health responded to very smlar challenges n smlar ways, the extent to and care What system s meant resonate by a hosptal very much chan? wth the current stuaton n the NHS: whch the two health systems amended ther organsatonal models The ntroducton of case-flat-rate remuneraton, based on dffers greatly. Whereas the NHS organsatonal form has remaned dagnoss-related-groups n Ths s the equvalent of the tarff system, relatvely unchanged, the German system has adapted to ncorporate ntroduced n the UK n 2004 as part of payment by results (PbR). the development of new forms of collaboraton between hosptals Leadershp through the establshment of chans, provdng a way to mprove Increasng fnancal pressures felt by hosptals, gven the declne n publc compettveness whle mantanng or mprovng qualty. Ths process fundng avalable to support captal nvestment. Hosptals were ncreasngly has contnued to develop over tme, wth over half of all hosptals n havng to draw on ncome allocated for operatng costs to fund nvestments. Germany today part of a group or chan. New regulatory efforts to mprove qualty and safety, through the ntroducton of a naton-wde benchmarkng qualty assurance programme wth more than 400 qualty ndcators used. The UK equvalent s the CQC and ts focus Effcency on qualty benchmarks and hosptal ratngs. The ncreasng pressure to compete n a market charactersed by an oversupply of hosptal capacty, where patents are free to choose where they are treated, based on qualty of care provded, for nstance. Over half of all hosptals n Germany today are part of a chan Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

21 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Strategc leadershp s paramount to the effectve runnng of a hosptal chans Leadershp Defnton: Leadershp s (1) the acton of leadng a group of people or an organsaton, or the ablty to do ths; and (2) the state or poston of beng a leader. 1 The skllset of the leadershp of a chan s what dstngushes t as an organsatonal model. It requres a separaton of strategc management (at HQ level) from operatonal management (at each managed entty). 2 The strategc approach of the chan s set by the chan leadershp and ths s coupled wth ndvdual stes retanng local autonomy over operatonal management of core operatons such as medcal servces, nursng and care servces n ther facltes. 3 Wthn a chan, dfferent models of leadershp can be employed per ste as necessary. For example, a more rgd command and control style leadershp can work for one ste whereas a more devolved approach may be more effectve for another ste. 4 Dfferent chan groups also employ dfferent approaches there s no one sze fts all approach. 5 It s the responsblty of the overarchng strategc leadershp to control nnovaton responsbly at all stes of the chan. The leadershp at the hosptal chan we vsted n Germany has worked to create an envronment n whch nnovaton and servce enhancement s promoted n partcular nnovaton hubs. Servces are mantaned and more tghtly defned and regulated, however, n other stes or spokes of the chan. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

22 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Strategc Our vewleadershp s paramount to the effectve runnng of a hosptal chans In order to operate an effectve and successful chan of hosptals, strong strategc leadershp s paramount. Leadershp Leaders have to be able to readly shft ther mnd-set between Defnton: strategc Leadershp corporate s (1) leadershp the acton (managng of leadng the a group needs of of people the or an organsaton, centre) and or tactcal the ablty operatonal to do ths; leadershp and (2) the (local state level, or poston hosptal of beng specfc a leader. ssues). Shftng the mnd-set of Drectors and board members towards one of jont ownershp and governance wth organsatons n ther chan wll be requred to avod a scenaro of some organsatons wnnng and losng and a shft to one of wnnng for ther patents and wder communty. Even farly modest buddyng schemes to share a partcular servce or back offce functon create operatonal, fnancal and clncal rsk. 1 The skllset of the Chan leadershp leaders of must a chan be prepared s for ncreased scrutny from a wder what range dstngushes of stakeholders t as an both nternal and external. NHS leaders are organsatonal well used to heavy model. scrutny It locally, regonally and natonally n requres the press a and separaton from regulators. of However, movng to a chan s lkely strategc to ncrease management the number of stakeholders and relatonshps to (at manage. HQ level) An ncreased from shft n strategc leadershp wll be mportant operatonal n ths management context. (at each managed entty) NHS England has sent out the clear message that strugglng servces and provders wll be prortsed as part of the new care models programme, whch s backed by the 200m 2 Transformaton The strategc approach Fund. Consderng the manageral effort and tme requred of the chan to change s set by the the culture and operatons of a falng servce, leaders chan leadershp must be equpped and ths to address cultural challenges head-on. s coupled Ths wth wll ndvdual requre perseverance and a mnd-set for longer-term stes retanng sustanable local change and wll demand leaders who are autonomy enabled to over stck operatonal around for the long-haul. management of core operatons such as medcal servces, nursng and care servces n ther facltes. 3 Wthn a chan, dfferent models of leadershp can be employed per ste as necessary. For example, a more rgd command and control style leadershp can work for one ste whereas a more devolved approach may be more effectve for another ste. The Dalton Revew beckons leaders of successful NHS organsatons to become system archtects : usng ther socal entrepreneural sprt to develop nnovatve solutons to ther challenges and to codfy and spread ther success. The best standards of care can and should be avalable, relably, to every local ste n the country. Ths s precsely what we saw n acton at the German hosptal chan we vsted and should be adopted. 4 Dfferent chan groups also employ dfferent approaches there s no one sze fts all approach. 5 It s the responsblty of the overarchng strategc leadershp to control nnovaton responsbly at all stes of the chan. The leadershp at the hosptal chan we vsted n Germany has worked to create an envronment n whch nnovaton and servce enhancement s permtted n partcular nnovaton hubs. Servces are mantaned and more tghtly defned and regulated, however, n other stes or spokes of the chan. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

23 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Hosptal chans delver greater economes of scale and skll Economes of scale and skll Defnton: Economes of scale are the cost advantages that enterprses obtan due to sze, output, or scale of operaton, wth cost per unt of output generally decreasng wth ncreasng scale as fxed costs are spread out over more unts of output. 3 By centralsng functons, n the frst nstance focusng on back offce functons such as IT, HR, Fnance, Payroll, Comms, PR, Meda, Procurement etc., a hosptal chan produces effcences that can then be appled to future acqustons wth even greater beneft. 4 The consoldaton of sklls n clncal support servces and the standardsaton of clncal protocols and pathways throughout the network of clncans n the chan enables the relable delvery of servce standards and mproves outcomes. 1 Operatng as a chan delvers greater economes of scale, contrbutng postvely to the chan s bottom lne. 63% of the costs of the average UK hosptal can be attrbuted to people costs, at the chan we vsted people costs represent only ~55% of the total. 2 Indvdual stes wthn a chan recognse that they are unable to provde a servce to the requred qualty standard themselves. Outsourcng partcular servces to another hosptal n the chan provdes access to dfferent sklls, expertse, new technology and helps resolve gaps n clncal workforce. 5 Collectve procurement strateges enable large savngs to be made through reducton n the number of product lnes and greater guaranteed volumes, partcularly when addng new hosptals to the chan. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

24 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Hosptal Our vewchans delver greater economes of scale provdes the opportunty for some loss makng or lower proft servces to be subsumed Economes of scale wthn the wder chan. Ths sort of approach when Defnton: Economes adopted of n scale the are UK the as cost a potental advantages soluton that to enterprses falng obtan due to sze, servces output, can or scale often of be operaton, too readly wth dsmssed cost per unt as of output generally hdng decreasng the problem. wth ncreasng In Germany scale as however, fxed costs we are spread out over more observed unts that of output. falng hosptals were fundamentally transformed upon jonng a chan. Often the multple stes of a chan wll be geographcally dspersed. Chans provde the potental to share staff across dfferent stes however we saw lttle of ths n place except for back offce functons and more tradtonal radology servces. There are real staffng and skll range dffcultes wthn the NHS. The hosptal chan we vsted n Germany evdenced that hosptal chans could allevate the pressure posed by a lmted and largely statc workforce. A chan helps to facltate economes of skll, movng around of resource to where t s most needed. Further dgtal adopton by healthcare provders would provde the opportunty and catalyst to moblse staff across stes and drve productvty amongst the workforce. Chans could more readly support a flexble and agle workforce who can work 24/7. 3 By centralsng functons, A flexble workforce would reduce the n the relance frst on nstance temporary, locum and bank and agency staff mprovng focusng contnuty back of care, offce patent qualty and reducng costs. Gven the functons extent to such whch as IT, the HR, NHS defct s beng drven by egregous Fnance, spend on Payroll, agency Comms, staff n the words of Smon Stevens, the noton PR, of a Meda, dynamc Procurement workforce etc., that can adapt to patent flow pressures a s hosptal a partcularly chan produces attractve one. Ths can be enabled by a hosptal chan. effcences that can then be appled to future acqustons German hosptal chans have been able wth to even drve greater a greater beneft. economy of scale n the more tradtonal mddle and back offce channels such as: Procurement, HR, Fnance, Comms, Legal, Meda, PR. Successful 2 chans Indvdual rapdly stes deploy wthn standardsed systems and processes and manage a chan recognse adopton that carefully. The NHS doesn t make use of ths opportunty they are unable at scale to at present and there remans a lmted number of examples provde a of servce sharng to the mddle and back-offce resources across Trusts. requred qualty standard To captalse on scale and skll opportuntes wthn a chan, an themselves. Outsourcng mportant consderaton s the way n whch staff (and n partcular partcular servces to front-lne healthcare delvery) are contracted, ether to a set ste or another hosptal n the to the chan. In the NHS, staff wll often be contracted to a partcular chan provdes access to ste (rather than Trust), lmtng the ablty to flex requrements across dfferent expertse, new multple localtes. Ths requres further exploraton wthn an NHS technology and helps context, and agan could be better enabled through dgtal servces, resolve gaps n clncal partcularly as demand ncreases n lne wth seven day workng. workforce. 4 The consoldaton of clncal support servces and the standardsaton of clncal protocols and pathways throughout the network of clncans n the chan enables the relable delvery of servce standards and mproves outcomes. 1 Operatng as a chan delvers greater economes of scale, contrbutng postvely to the chan s bottom lne. 63% of the costs of the average UK hosptal can be attrbuted to people costs, at the chan we vsted people costs represent only ~55% of the total. 5 Collectve procurement strateges enable large savngs to be made through reducton n the number of product lnes and greater guaranteed volumes, partcularly when addng new hosptals to the chan. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

25 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Hosptal chans enable the standardsaton of practce and consequently ncrease effcency Effcency Defnton: Effcency s defned, for the purposes of ths document, as (1) the state of achevng maxmum productvty wth mnmum wasted effort or expense; and (2) workng n a well-organsed and competent way. 4 A standardsed approach to the mprovement methodology allows falng hosptals to be added to the group and turned around n accordance wth an establshed blueprnt for success. Ths encompasses due dlgence processes, legal processes, nterm staffng and project management. The burden of the strugglng ste and the fees assocated wth the acquston can be shouldered by the chan as a whole untl the performance of the falng hosptal has been mproved. 1 Hosptal chans enable the standardsaton of practce and consequently the delvery of ths at a lower management cost overhead. 2 Due to the standardsaton of practce, the chan leadershp can demand hgher fnancal and qualty expectatons of ts subsdares. Targets can be dfferent at each hosptal wthn the chan. 3 A chan encourages a standardsed approach to the adopton and spread of nnovaton, partcularly for new technologes and devces. Good practce s dentfed and communcated upwards to the leadershp and can be dssemnated across the other subsdares of the group. 5 Effcences are further derved from another beneft of hosptal chans: Scalablty. Addng another ste to the chan only adds margnal cost as the fxed costs le n the corporate hub and shared functonalty. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

26 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Hosptal Our vew chans enable the standardsaton of practce and consequently ncrease effcency The standardsaton of practces and servces, and Effcency back offce processes (such as Procurement, HR, Defnton: Effcency Fnance, s defned, Comms, for Legal, the purposes Meda, PR) of ths was document, common as (1) the state of across achevng the stes maxmum we vsted. productvty However, wth there mnmum was wasted effort or expense; lttle and evdence (2) workng of effectvely n a well-organsed standardsed competent clncal way. delvery, and clncal varaton stll exsts. 4 A standardsed approach to the mprovement methodology As emphassed by the Dalton Revew, allows form falng follows hosptals to be added to the group and functon. Organsatonal form should turned always around be n accordance wth an establshed blueprnt desgned to support the practcal for delvery success. of Ths care encompasses and due dlgence processes, should not be an end n tself. Whlst legal processes, a partcular nterm model staffng and project management. of care such as a chan may be approprate The burden n of one the strugglng ste and the fees assocated nstance, t mght be wholly napproprate wth the acquston n another. can The be shouldered by the chan as a effectve meetng of patent need whole must untl always the reman performance the of the falng hosptal has uncompromsng red lne n these been consderatons. mproved. 1 Hosptal chans enable the standardsaton Relablty of clncal of practce standards and s affected by ssues ncludng consequently governance, the leadershp delvery and of ths fnancal vablty and, whle a chan at model a lower can management address some cost aspects overhead. of these ssues, t cannot be consdered a panacea. There are several ways that chan-style arrangements could 2 operate Due to n the the UK whch stop short of a full takeover. For example, trusts standardsaton could set up buddyng arrangements for partcular medcal specaltes, of practce, or the local hosptals could have ther back-offce servces taken chan over leadershp to cut admnstratve and procurement costs. 3 A chan encourages a can demand standardsed approach to hgher fnancal the adopton and spread and qualty of nnovaton, partcularly expectatons of ts for new technologes and subsdares. Targets devces. Good practce s can be dfferent at dentfed and communcated each hosptal wthn upwards to the leadershp the chan. and can be dssemnated across the other subsdares of the group. The dea behnd hosptal chans plays to the pecular algorthm of publc servce mprovement: f you lump together a good nsttuton and a bad one you end up wth two good ones. The noton of synergy mergers have been attempted recently n schools n the UK wth mxed results. Smlar examples of ths n UK health have also demonstrated however that success s not always the outcome. The most notable examples nclude: 5 Effcences are further derved from The takeover eght years ago of Good Hope another Hosptal beneft by Heart of hosptal of chans: England Foundaton Trust (HEFT); and Scalablty. Addng another ste to the chan only adds margnal cost as The struggles Bart s have undertaken snce ther merger and the fxed costs le n the corporate enterng Specal Measures. hub and shared functonalty. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

27 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Hosptal Our vew chans enable the standardsaton of practce and consequently ncrease effcency Heart of England Foundaton Trust perhaps best demonstrates how long, hard and expensve t can be to shft to a successful operatng Effcency model. Should the NHS pursue a chans style organsatonal model or somethng akn to that whch stops short of a full takeover Defnton: these Effcency are fundamental s defned, lessons for the that purposes must be of learned. ths document, as (1) the state of achevng maxmum productvty wth mnmum wasted effort or expense; and (2) workng n a well-organsed and competent way. A German chan experence of fnancal turnaround s partcularly nterestng n the context of 1 Hosptal chans turnaround enable and the sustanablty. The hosptal chan standardsaton we vsted of practce brought nto and the chan a hosptal wth a consequently EUR the 50 delvery mllon of defct. ths Wthn two years, as a result at a lower management of nvestment cost from overhead. the Strategc centre the hosptal was generatng a proft and showng growth of 10%. 2 When Due studyng to the the German experence as a blueprnt for success n ths standardsaton regard, mportant caveat to consder s that the motvatons behnd of practce, a hosptal s the takeover and turnaround are vastly dfferent due to chan the nature leadershp of the compettve German healthcare market. 3 A chan encourages a can demand standardsed approach to hgher fnancal the adopton and spread and qualty of nnovaton, partcularly expectatons of ts for new technologes and subsdares. Targets devces. Good practce s can be dfferent at dentfed and communcated each hosptal wthn upwards to the leadershp the chan. and can be dssemnated across the other subsdares of the group. 4 A standardsed approach to the mprovement methodology There s varaton n terms of the extent to whch NHS Trusts are allows falng hosptals to be added to the group and performng fnancally and operatonally. NHS England have recently turned around n accordance wth an establshed blueprnt announced that they wll be drectng provders strugglng both for success. Ths encompasses due dlgence processes, fnancally and operatonally towards new care models as part of legal processes, nterm staffng and project management. a success regme of whch hosptal chans may form part of the The burden of the strugglng ste and the fees assocated soluton. wth the acquston can be shouldered by the chan as a At the prvate chan we vsted, success whole and sustanablty untl the performance of servce of the falng hosptal has provson dd not appear to be on the same been knfe mproved. edge that UK publc health provders mght fnd. Whle German publc hosptals may share smlartes wth the NHS experence of turnaround, the provson of a prvate servce n Germany appears to be justfed more by proft than by the prncple of altrusm, one that s so mportant to the NHS. Whle the German hosptal chan experence can shed lght on executng a successful turnaround of a falng hosptal (e.g. the detaled due dlgence processes, the robust contractual agreements, the effectve post-merger ntegraton), realstc expectatons need to be set as to how far the NHS (as we know t) could boast smlar achevements. 5 Effcences are further derved from another beneft of hosptal chans: Scalablty. Addng another ste to the chan only adds margnal cost as the fxed costs le n the corporate hub and shared functonalty. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

28 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS An overall set of values and a cooperatve culture permeates at the level of each chan hosptal Defnton: s a system of shared assumptons, values, and belefs, whch governs how people behave n an organsaton. 1 A hosptal chan operates wth an overall set of values and a sngle strategc framework whch permeate at the level of each local provder. Culturally, ths makes for a very cohesve and unfed workforce. Ths can manfest tself n a can do atttude or a cooperatve sprt. 2 The culture of a provder s derved from a number of factors over many years. Local geography, hstorcal servce changes and local demographcs all play ther part. In spte of the standardsaton of practce that comes wth beng a chan, nuanced cultural values of ndvdual stes are retaned and not lost to a franchse. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

29 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS An Our overall vew set of values and a cooperatve culture permeates at the level of each chan hosptal One of the most strkng features of the chan hosptals we vsted was the sense of order and control that permeated at every level. Everythng had ts place, the non-clutterng of walls wth sgns and papers, offce fllngs, and medcal equpment consumables Defnton: stacked away s neatly. a system It s of was shared the uncompromsng assumptons, values, norm and on belefs, every whch ward, governs n every how people clncal behave area and n an non-clncal organsaton. area we vsted. From Board to ward, there was seemngly an expectaton of organsaton and competence, beneftng staff and patents n equal measure. 1 A hosptal chan operates wth an overall set of values and a sngle strategc framework whch The Carter permeate Revew descrbes at the level the of need each local to create a culture of relentless provder. cost contanment Culturally, wth ths a makes forensc examnaton of every pound spent for n a very delverng cohesve healthcare. and unfed Wthn a hosptal chan, ths can develop workforce. much more Ths easly, can manfest begnnng from the top down wth a vson and tself framework n a can set do out atttude by the or chan s a strategc leadershp. cooperatve sprt. In , the NHS spent 2.5bn on nurse bank staff and 720m on agency nursng. Ths s due to an ncreased focus on safer staffng and a 29% ncrease n the rate of nurses leavng the professon. The Secretary of State has announced measures for addressng ths spend and the Carter Revew also emphasses the need to address the workforce productvty challenge. An often overlooked addtonal mpact of the heavy dependence on temporary staff s the negatve mpact on staff morale. Tensons can exst between the permanent workforce and temporary staff passng through. A hosptal chan can mtgate ths, however, as staff come to collectvely dentfy wth the greater good culture and values of the group, whle stll recognsng the cultural nuances of the ndvdual stes. An agle and dynamc workforce as called for by the Carter Revew s not only normalsed wthn a hosptal chan model, but welcomed. 2 The culture of a provder s derved from a number of factors over many years. Local geography, hstorcal Whle jonng a chan can have potental postve cultural mpacts on servce changes and local demographcs all play ther partcpatng stes, the scale of the ntal challenge to jon together part. In spte of the standardsaton of practce that multple staff bodes and ways of workng cannot be underestmated. comes wth beng a chan, nuanced cultural values of The Workforce and Organsatonal Development (OD) leads at NHS ndvdual stes are retaned and not lost to a franchse. Trusts and Foundaton Trusts enterng nto a chan have an enormous task ahead of them. Both clncal and management staff need to feel not just engaged wth, but actvely nvolved n the transton to beng part of a chan; shftng ther collectve mnd-set to one of proactve cooperaton for the good of the patent. Ths wll nvolve sgnfcant OD and workforce plannng nvestment as well as routnely workng to desgn and confgure servces n a way that nvolves patents and health professonals alke. NHS nsght Clck here for the PwC pont of vew Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

30 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Conceptually, hosptal chans have now ganed sgnfcant tracton n the UK and nternatonally. Clck the cons below to explore three of the most fundamental practcal obstacles to effectve hosptal chans adopton facng the NHS. Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Obstacles What s meant by a hosptal chan? Leadershp Commssonng Regulaton Ownershp Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

31 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved facng qualty the NHS. outcomes and addressng operatonal and fnancal sustanablty ssues. Clck the cons below to explore three of the most fundamental practcal obstacles to effectve hosptal chans adopton Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Commssonng and fnancal sustanablty ssues. Obstacles The creaton of hosptal chans s potentally an mportant step to What s meant by a supplantng hosptal chan? decades of NHS polcy by replacng competton between separate hosptal trusts wth wdespread collaboraton. Ths s undoubtedly a commendable and mportant ntatve to lnk the best performng hosptals wth networks of others to help rase standards. To what extent, however, can Clncal Commssonng Groups (CCGs) keep Leadershp pace wth a renewed polcy appette for collaboraton and a renewed mpetus for transformatve change, drven by the Vanguard programme? Effcency As the customer of care delvered to a certan geography and populaton, the commssoner must defne the ask or the wsh lst for provders to provde as they see ft wthn the parameters set. However, the momentum behnd hosptal chans, and ultmately the convncng ratonales of qualty outcomes and resource sustanablty, have up to now been provder drven. To what extent, therefore, can provders be confdent that ther nterventons as part of a chan wll be approprately funded by the CCG? Are commssoners and provders on the same page here? There s no blueprnt for ths at scale and there s legtmate concern that CCGs mght not get as quckly to the mnd-set of collaboraton as they have to. Outcomes-based commssonng models that commsson at a hgh-level, encouragng provders to fll n the detal, as long as they delver on patent outcomes and fnancal targets, wll be crucal enablers of the nterventons of hosptal chans or foundaton groups. To what extent wll CCGs be content to absorb any rsk assocated wth such nnovatve models of commssonng? Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

32 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved facng qualty the NHS. outcomes and addressng operatonal and fnancal sustanablty ssues. Clck the cons below to explore three of the most fundamental practcal obstacles to effectve hosptal chans adopton Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Regulaton and fnancal sustanablty ssues. Obstacles Part of NHS England s new care models programme, the applcaton What s meant by a perod hosptal for chan? Vanguard stes to develop new care models closed at the end of July Selected hosptal chan vanguard stes referred to as foundaton groups were announced. The successful hosptal chan vanguard applcatons are Salford Royal and Wrghtngton, Wgan and Legh foundaton group, Northumbra Healthcare foundaton group and Leadershp Royal Free London FT and work s already underway. Effcency The new care models programme were ntally backed by a 200m Transformaton Fund. Followng the 2015 Spendng Revew, NHS England announced the establshment of a Sustanablty and Transformaton Fund, of whch 340 mllon wll be nvested n the Vanguard programme and other areas of the Fve Year Forward Vew n Montor and the Trust Development Authorty now called NHS Improvement as well as NHS England, wll support provders of acute servces develop new models that can be replcated across England at scale to mprove qualty, productvty and effcency. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

33 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved facng qualty the NHS. outcomes and addressng operatonal and fnancal sustanablty ssues. Clck the cons below to explore three of the most fundamental practcal obstacles to effectve hosptal chans adopton Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Ownershp and fnancal sustanablty ssues. Obstacles The prvate hosptal chan we vsted n Germany was qute candd What s meant by a about hosptal ts prvate chan? owners and ts proft motve. Wthn publc health and the NHS, the ownershp queston s more complcated and hghly poltcal. Hosptal chans, conceptually, wll be shrouded n suspcon and plans for collaboraton wll nevtably be dsmssed by some as an excuse to make cuts or close servces. Gven the hstory of mergers n Leadershp the NHS, the fear may be that smaller trusts wll be gobbled up by larger ones n the name of effcency, leavng servces much less accessble for local people; or that chans wll end up squeezng out competton and actually compromsng care n the quest to maxmse proft. Effcency The hstory of mergers n the NHS, and n the wder world of ndustry, s by no means one of predctable success. In fact, some of the Vanguard collaboratons are wrestlng wth non-mergers from the CMA. Equally, there sn t the resource for even hgh-performng Trusts to complete acqustons n the current fnancal context. To what extent, therefore, wll NHS England and the Department of Health nvestgate alternatve ownershp models to ncentvse hosptal chans? Could a shared ownershp model work, whereby government and Trust equty s pooled and autonomy s ncrementally earned? Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

34 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved hosptal qualty chans outcomes adopton and addressng the NHS operatonal and fnancal sustanablty ssues. Clck the cons below to explore the steps that stakeholders should consder to ensure effectve Clck the cons to explore the key features of the hosptal chan model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal and fnancal sustanablty ssues. Next steps What s meant by a hosptal chan? Leadershp Department of Health NHS England NHS Trusts and Foundaton Trusts Effcency Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

35 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved hosptal qualty chans outcomes adopton and addressng the UK operatonal and fnancal sustanablty ssues. Clck the cons below to explore the steps that the relevant stakeholders wll have to take to ensure effectve Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal Department and fnancal of Health sustanablty ssues. The Department of Health have lad down the gauntlet What s for meant new models by a hosptal of care, chan? wth the 2015 Spendng Revew announcng nvestment of 120 bllon a year by to drve forward the NHS Fve Year Forward Vew. Leadershp Equally, the commssonng of the Dalton Revew marked central government s serous ntentons to engage wth nnovatve models of care. Effcency Next steps Contnued ncentvsaton: The Department of Health must contnue to fnd the money to ncentvse the new models programme. The appette for change begns wth central government. Prvate sector nvolvement: The NHS does not have a wealth of experence n ths area and the experence at Crcle wll only bolster the clams for nerta. The Department of Health may be requred to look to prvate hosptal sector nvolvement to kck start a plot at scale. The prvate hosptal sector may have the experence, the capablty and the tolerance to rsk that the publc sector does not have at present to front the ntal costs and rse to the challenges of a new model of care. Learnng from nternatonal experence: A new organsatonal model undoubtedly comes wth rsks that can be mtgated by learnng from pror experences natonally and nternatonally. To accelerate the pace of change, the Department of Health must make every effort to learn the practcal lessons of hosptal chans adopton and apply these learnngs approprately. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

36 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved hosptal qualty chans outcomes adopton and addressng the UK operatonal and fnancal sustanablty ssues. Clck the cons below to explore the steps that the relevant stakeholders wll have to take to ensure effectve Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal NHS England fnancal sustanablty ssues. Part of NHS England s new care models programme, the applcaton perod for Vanguard stes to What develop s meant new care by a models hosptal closed chan? at the end of July Selected hosptal chan vanguard stes referred to as foundaton groups were announced. The successful hosptal chan vanguard applcatons are Salford Royal and Wrghtngton, Leadershp Wgan and Legh foundaton group, Northumbra Healthcare foundaton group and Royal Free London FT and work s already underway. The new care models programme was ntally backed by a 200m Transformaton Fund. Followng the 2015 Spendng Revew, NHS England announced the establshment of a Sustanablty and Transformaton Fund, of whch Effcency 340 mllon wll be nvested n the Vanguard programme and other areas of the Fve Year Forward Vew n Montor and the Trust Development Authorty now called NHS Improvement as well as NHS England, wll support provders of acute servces develop new models that can be replcated across England at scale to mprove qualty, productvty and effcency. Next steps Developng a shared narratve across the NHS: The last 12 months represents one of the most ntensve perods of mposed change n the hstory of the NHS. Much of ths s comng from NHS England and the extent of the nformaton push can result n change fatgue, dsllusonment and gnorance around what hosptal chans actually mean for the NHS. A key challenge facng NHS England, therefore, s conveyng clearly that hosptal chans are not just an dea that wll come and go. The NHS workforce should be made aware that a shared narratve has now been bult across the entre NHS system around hosptal chans, culmnatng n plot programmes becomng prmed and ready for adopton. Testng the concept at scale: The NHS n ts current poston, has to take rsks f t s to fnd a route to sustanablty. Hosptal chans are promsng deas that offer the potental to spread clncal excellence and delver cost reducton. The test wll be whether they can be delvered wth the speed, scale and effectveness to change the natonal pcture. Therefore, an ambtous, large-scale plot may be requred to properly test the deas offered by hosptal chans conceptually. Learnng the lessons from the vanguards: Wth the vanguard programme now launched, there wll be a feelng wthn NHS England that the baton has now been passed and that the success or falure of the hosptal chans model les wth the successful applcants far from t. NHS England should constantly be lookng to learn from these plots, draw on nternatonal experence, and to be sharng the knowledge that comes out of them proactvely. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

37 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Call to acton what now for hosptal chans? The four key features of hosptal chans hghlghted below are the foundatons for drvng mproved hosptal qualty chans outcomes adopton and addressng the UK operatonal and fnancal sustanablty ssues. Clck the cons below to explore the steps that the relevant stakeholders wll have to take to ensure effectve Clck the cons to explore the key features of the hosptal Call chan to acton model. These are the foundaton for drvng mproved qualty outcomes and addressng operatonal NHS Trusts and fnancal and Foundaton sustanablty ssues. Trusts For Trusts and Foundaton Trusts plotng a chan-style What arrangement, s meant by a board hosptal members chan? wll be requred to shft ther collectve mnd-sets towards one of jont ownershp and governance wth other organsatons. Ths should hopefully change the unhelpful percepton Leadershp of servce change by boards of wnnng or losng for ther organsaton to one of wnnng for ther patents and wder communty. Patents wll also need to be assured that hosptal chans adopton wll not compromse qualty of care or access to servces. Every level of the provder organsaton Effcency needs to engage wth the publc n the benefts the new model brngs. Next steps Invest n sklls and capabltes: Staff wll need to be equpped wth the sklls and capabltes to make the grand plans of ths new model of care a realty. The experence of the foundaton group vanguards wll be crtcal here to nformng what the lessons are for staff to make chans a success. Translate the poltcal rhetorc to somethng meanngful for patents and staff: The responsblty wll be on NHS Trusts and Foundaton Trusts to translate the poltcal rhetorc around hosptal chans for ther patents and staff. Chans have been mooted under many names for 18 months now (buddyng agreements, provder collaboratves, shared servces etc.) but enough momentum has now bult to make fully-fledged hosptal chan arrangements a realty. For hosptals that become parts of a chan, there wll be a requrement to clearly and concsely convey how the lves of patents and staff wll be mproved or at least changed wthn a hosptal chan. Share what s workng, share what sn t workng: Organsatonal form should always be desgned to support the delvery of models and standards of care, and should not be an end n tself. The Vanguard programme should not be so wedded to hosptal chans conceptually that t loses sght of what works practcally, the responsblty s on Trust leadershp to be contnuously communcatng what s workng and what s not workng to allow the model to adapt and terate. Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

38 A tmelne The buldng hosptal chans narratve Drvers transformatonal change German hosptal chans Facts and fgures Key fndngs Call to acton Hosptal chans ther role n the future of the NHS Authors Publc sector health our people Health overvew Authors Ian Baxter Partner an.baxter@uk.pwc.com +44 (0) Davd Thorpe davd.o.thorpe@uk.pwc.com Nel Woodngs Partner nel.woodngs@uk.pwc.com +44 (0) Jack Tabner jack.a.tabner@uk.pwc.com Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

39 A tmelne Drvers The buldng hosptal chans narratve transformatonal change German hosptal chans Key fndngs Call to acton Facts and fgures Hosptal chans ther role n the future of the NHS Authors Publc sector health our people Health overvew Publc sector health our people Quentn Cole Karen Fnlayson Yvonne Mowlds Partner, UK Health Industres Leader Partner, Rsk Assurance, North Regon Lead Drector, Health Forensc Lead quentn.r.cole@uk.pwc.com +44 (0) karen.fnlayson@uk.pwc.com +44 (0) yvonne.m.mowlds@uk.pwc.com +44 (0) Mke Farrar Alson Breadon Heather Ancent Publc Sector Health Board Char Partner, Rsk Assurance, Mdlands Regon Lead Partner, Assurance, Wales & West Regon Lead mke.farrar@uk.pwc.com +44 (0) alson.breadon@uk.pwc.com +44 (0) heather.c.ancent@uk.pwc.com +44 (0) Davd Morrs Bran Pomerng Kalee Talvte-Brown Partner, Busness Recovery Servces Lead Partner, UK Health Consultng Lead Partner, Consultng, South East Regon Lead davd.x.morrs@uk.pwc.com +44 (0) bran.d.pomerng@uk.pwc.com +44 (0) kalee.talvte-brown@strategyand.uk.pwc.com +44 (0) Andrew McKechne Raj Bhamber Dr Olver Bernath Partner, Prvate Health Sector Leader & Deals Lead Drector, Human Resource Servces Leader Partner, Consultng, Health Analytcs andrew.mckechne@uk.pwc.com +44 (0) raj.bhamber@uk.pwc.com +44 (0) olver.bernath@strategyand.uk.pwc.com +44 (0) Anna Blackman Ian Baxter Partner, Health Assurance Lead Partner, Corporate Fnance Lead anna.blackman@uk.pwc.com +44 (0) an.baxter@uk.pwc.com +44 (0) Hosptal chans offer strategc leadershp, greater economes of scale, skll and effcency, whlst provdng operatonal and cultural autonomy

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