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Strategic Management of the NHS Case Study

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Updated: Jul 20th, 2019

Introduction

The main objective of the NHS is to ensure that all residents of the UK are able to access medical services irrespective of their demographic, social, cultural or economic background (NHS 2014). One of the major advantages of the NHS is that it enables the residents of the UK to receive healthcare free of charge. In addition, it provides a variety of services to all patients. This has resulted into improved health outcomes in the country.

However, the NHS has faced serious challenges in the last few years. These include limited funding from the government and inadequate capacity to handle rising demand for medical services (Schmid et al. 2010, pp. 455-486). In addition, patients have complained about declining service quality standards, whereas physicians are concerned about deteriorating terms of service.

This has forced the government to intervene by implementing new policies and strategies to improve the performance of the NHS. This report will provide a detailed analysis of the NHS, with the aim of proposing recommendations to the government to improve its performance. The report will begin by highlighting the current state of the UK’s healthcare system. This will be followed by analysis using various tools and models.

Problems

First, secondary care institutions are facing sustainability challenges. This is illustrated by the fact that nearly 15% of the country’s hospitals that provide specialized care have been declared unsustainable in the recent past.

As more institutions become clinically and economically unsustainable, access to high quality healthcare will reduce significantly (Rothgang et al. 2008, pp. 132-146). Second, the government believes that it should reduce its expenditure on healthcare by 20%. This need arose as a result of the country’s poor economic performance in the last five years.

Third, there is no effective integration between hospitals and community services. Some of the factors that hinder integration include poor communication, conflicting objectives among care institutions, and competition among care providers (Williams 2011, pp. 100-113). Fourth, the public has lost trust in general practitioners (GPs). The GPs have focused on pursuing their interests at the expense of providing improved and accessible services to the public.

Aims and Objectives of the Healthcare System in the UK

First, the government intends to cut its expenditure on healthcare without compromising quality and access. This objective is meant to improve efficiency in the healthcare system. Second, the NHS intends to distribute the existing workload between primary and secondary care institutions.

A fair distribution of the workload will enhance capacity optimization in existing care institutions, thereby improving access. Third, the integration between care institutions is to be improved. This objective will facilitate effective and efficient cooperation among care providers (Williams 2011, pp. 100-113).

Fourth, the NHS intends to increase the range of local services that are provided by the GPs. This will restore public confidence and trust in GPs (Costigliola 2012, p. 42). In addition, the demand for secondary care will reduce if improved services are provided at the local level. Finally, the process of commissioning healthcare is to be improved by increasing the representation of clinicians in the CCGs. Improved participation of clinicians will ensure that quality medical services are available in every region in the UK (Costigliola 2012, p. 52).

Stakeholders

The stakeholders include the Care Quality Commission (CQC), National Health Service (NHS) England, Clinical Commissioning Groups (CCG), Health and Wellbeing Board, the government, the National Treasury, and Monitor (NHS 2014). The CQC monitors the health sector by ensuring that care institutions are providing safe, effective, and high quality medical services. NHS England facilitates access to healthcare by providing adequate care facilities, medical supplies, and qualified physicians.

The main role of CCGs is to plan and design the process of providing medical services at the local level (NHS 2014). This involves purchasing medical services such as planned hospital care and rehabilitation care. The Health and Wellbeing Board collaborates with the commissioners and the community members to facilitate equitable access to healthcare at the local level. Monitor regulators the health sector by ensuring that the services provided meet the varied needs of the citizens (Monitor 2014).

Analysis of Major Provider Sectors

The government of the UK provides healthcare at different levels. These include primary care, secondary care, community care, and social care. Primary care is mainly provided by general practitioners and nurses as a first response to various health conditions. Primary care “provides universal and comprehensive access to all citizens” (Greener 2009, p. 76).

The services include diagnosing diseases, prevention of diseases, and encouraging healthy behaviors (NHS 2014). The main strengths of the country’s primary care system include high access rate and effective coordination of services. However, the system is underfunded and the demand for services keeps rising (Appleby et al. 2014).

Secondary care in the UK is provided by consultants who are hired by the NHS. The consultants are doctors and health professionals who specialize in specific areas such as cardiology and physiotherapy. Generally, the consultants provide their services in hospitals that are owned by the government (NHS 2014).

The main strength of the UK’s secondary care system is that it provides high quality medical services. In addition, it is less expensive than those of most developed countries. However, access to secondary care in the UK has reduced tremendously in the last decade due to limited capacity. Patients have to wait for a long time to be attended to by specialists such as neurologists. In addition, poor coordination between primary and secondary care institutions limits access.

Community care is mainly provided at the local level to specific groups of people such as the disabled and the elderly. The aim of community care is to enable beneficiaries to receive care while maintaining their independence in their residential homes or care homes (NHS 2014). The services provided by the community care system include meals, helping with domestic chores such as cleaning, personal tasks such as bathing, and recreational activities.

Community care enables the government to reduce the strain on health facilities since the services are provided in the patient’s home or in a care home (Appleby et al. 2014).

The main weakness of the community care system is that the criteria for selecting the beneficiaries is often complicated and time consuming. Social care is also provided at the local level to help citizens and their families to cope with the life challenges that are attributed to disability and illnesses. Social care is also negatively affected by the complexities associated with selecting the beneficiaries.

Analysis of the NHS

SWOT Analysis

SWOT analysis highlights the strengths and weaknesses of the NHS. It also identifies the opportunities that are available to the NHS and the threats in the health sector (Gerlinger 2009, pp. 145-175). Table 1 summarizes the strengths, weaknesses, opportunities, and threats.

Table 1: SWOT

Strengths Weaknesses
NHS has been rated as an excellent healthcare provider by CQC Operating costs are rising beyond the sustainable level
NHS has expertise in developing appropriate clinical content and processes to deliver healthcare Long waiting lists due to limited capacity in public hospitals
NHS has extensive infrastructure and personnel at the local and national level (NHS 2014) Poor coordination between primary and secondary care institutions. This prevents access to healthcare at the local level
NHS is the only public provider of healthcare on a large-scale basis. Thus, it does not face high competition from private hospitals Low public confidence due to the declining quality of the medical services that are provided by the GPs
Opportunities Threats
NHS 111 provides opportunities to serve more customers Poor economic growth may reduce funding from the government. This will negatively affect service delivery
The market for long-term conditions is underdeveloped. This is an opportunity to provide more services to the underserved The rise in chronic diseases such as cancer and diabetes will increase the strain on the limited resources
Collaborating with private care providers provide opportunities for cost reduction Insufficient supply of specialized personnel to treat chronic diseases in public hospitals

The main strength of the NHS is its ability to provide medical services on a large-scale to the residents of the UK. Moreover, it has an extensive infrastructure and well trained medical personnel. The threats facing the NHS include limited funding and the increase in the number of patients with chronic conditions. The opportunities that are available to the NHS include using NHS 111 call service to enable more patients to access healthcare. Moreover, the NHS can address its capacity constraints by collaborating with private providers to deliver healthcare.

PESTEL Analysis

The PESTEL analysis highlights the external factors that are likely to influence the performance of the NHS in future. These include political, economic, social, technological, environmental, and legal factors (Greener 2009, p. 213). The influence of these factors is summarized in table 2.

Table 2: External Factors

Political Economic
Government is committed to improving efficiency by reducing costs Reduction of spending in healthcare due to poor economic performance
NHS reforms will reduce inequalities in access, improve transparency, and enhance citizens’ participation (House of Commons 2011, pp. 1-40) More citizens will opt for the free services provided by the NHS due to low purchasing power
Allowing more private sector organizations to deliver healthcare is expected to improve access and quality Rising cost of private health insurance will increase dependence on the NHS
Social Technology
Improvement in e-learning and digital inclusion is an opportunity to reduce costs through technologies such as telehealth High penetration of web and mobile phone technologies (NHS 2014). This will enhance provision of remote care via the internet and mobile phones
Increasing and aging population will strain the resources for community care (Farnsworth 2012, pp. 146-151) DH/NHS transaction engine enhances access to care through digital channels
Increase in long-term conditions will increase demand for secondary care Government is committed to enhance use of ICT in the health sector
Legal Environment
All trusts are required to achieve NHS foundation trust status to promote sustainability (House of Commons 2011, pp. 1-40) NHS has to reduce greenhouse gas emissions

The main external factors that pose significant threats to the NHS include increase in the prevalence of long-term conditions and rapid aging of the population, as well as, reduced funding. These factors will lead to resource limitations, thereby causing failure. However, improvements in e-learning and digital inclusion provide opportunities for cost reduction through technologies such as telehealth.

Competition: Porter’s Five Forces Analysis

Porter’s five forces analysis highlights the nature of competition in UK’s health sector (Costigliola 2012, p. 115). Table 3 summarizes the main forces in the competitive environment that are likely to influence the competiveness of the NHS.

Table 3: Market Forces

Buyer’s bargaining power Supplier’s bargaining power
Self-pay patients have high power due to their low switching cost NHS is the dominant supplier
Commissioners have high power due to their dominance Consultants in the private healthcare market have high bargaining power due to their limited number and ability to jointly set prices
Threat of new entrants is low because of Threat of substitutes
High entry costs Services provided by the NHS perform better than substitutes in terms of accessibility and cost.
Difficulty in introducing a model that is superior to the NHS Threat is moderate and is attributed to patient empowerment and medical tourism (Gilardi, Fluglister & Luyet 2009, pp. 549-573).
Intensity of competition is low because of:
Dominance of the NHS
Private providers lack national coverage
Limited availability of specialists

Table 3 shows that the NHS is able to overcome competition in the market. This is explained by the fact that the NHS is the largest provider of healthcare and its services perform better than those of the competitors in terms of accessibility and costs. However, the NHS should improve the quality of its services to overcome the threat attributed to alternative services such as medical tourism.

7S Analysis

The 7S analysis is a strategic management model that states that an organization must align and reinforce its soft and hard elements to achieve success (Sadler 2003, p. 56). The soft elements include staff, skills, shared values, and style. The hard elements include structure, strategy, and system (Sadler 2003, p. 56). These elements are summarized in table 4.

Table 4: The Soft and Hard Elements of the NHS

Soft elements Hard elements
Shared values
The values used by the NHS are respect,
improving lives, compassion, commitment to quality, and working together for patients.
Strategy
The strategy of the NHS is to improve healthcare by designing and commissioning care programs. The programs focus on five areas namely, prevention of premature deaths, safety, acute care, experience of care, and long-term conditions.
Skills
Employees are provided with learning and development opportunities to improve their skills. Staff are required to achieve accreditation after formal training (NHS 2014)
Structure
A hierarchical organizational structure with various management levels is in place. Directors and officers have been appointed to various positions.
Style
NHS promotes leadership development and staff involvement. It also promotes the culture of teamwork, public service, accountability, quality, and safety.
System
NHS provides healthcare through several organizations. These include CCGs, NHS foundation trusts, ambulance trusts, and care trusts.
Staff
NHS has a workforce of over 1.3 million people. This consists of medical and non-medical personnel. NHS conducts regular review of its workforce to identify and to address emerging staffing needs.

The organizational values that have been adopted by the NHS include compassion, improving lives, commitment to quality, and working together for patients. Compassion and commitment to quality will enable the employees of the NHS to provide the best healthcare, thereby improving patients’ health.

In addition, teamwork will facilitate effective coordination of healthcare services. Professional development will improve the employees’ skills. As a result, they will be able to satisfy patients’ health needs. The NHS delivers healthcare through several organizations, which include CCGs, and NHS foundation trusts. The organizational structures of these organizations should be streamlined to improve efficiency in healthcare delivery.

Stakeholder Analysis

Stakeholder analysis identifies the individuals and organizations that are likely to influence the activities of the NHS. Generally, stakeholders with high interest and power/ influence on delivery of healthcare are likely to have a great impact on the strategy and activities of the NHS and vice versa (Sadler 2003, p. 73). Table 5 sheds light on the stakeholders.

Table 5: Key Stakeholders

High power Parliament
Government
National directors of the NHS
Union leaders
Medical staff
CQC
CCGs
NHS foundation trusts
Monitor
Low power Non-medical staff Patients
Public Health
Patient representative groups
Low interest in healthcare High interest in healthcare

Stakeholders with high interest in healthcare are the main consumers of medical services. Thus, the NHS must align its strategy to the needs of stakeholders with high interest (patients) to achieve success. Non-medical personnel have low interest because they are not directly involved in the provision of healthcare. Thus, they are not likely to have a significant impact on the strategy of the NHS.

The union leaders and the government have high influence on healthcare provision. Thus, the NHS must satisfy their needs, which include cost reduction and maintaining acceptable quality standards. Medical staff, Monitor, and CQC have high interest and influence. Thus, the NHS must actively manage them to ensure long-term cooperation. The patients and Public Health have high interest and low influence. Thus, the NHS should keep them informed about its activities to facilitate access to care.

Recommendations

The government should adopt the following recommendations to reform the NHS. The main objective of the recommendations is to address the weaknesses of the NHS so that it can overcome external threats and take advantage of existing opportunities. The recommendations will also meet the objectives of the healthcare system in the UK.

Reduce Spending by 25%

Reducing expenditure is the major strategy that the NHS needs to reduce its budget deficits. Expenditure should be reduced by adopting the following strategies. First, the organizational framework of the CCGs should be decentralized. One of the major weaknesses of the NHS is high operating costs, which are partly attributed to centralization of CCGs’ organizational framework.

Significant cost reductions can be achieved by decentralizing CCGs. This will involve increasing the participation of the local communities in commissioning healthcare. The local communities will have high involvement in the ownership and management of healthcare facilities. This will promote cost reduction at the local level.

Second, specialized services should be merged. Services such as treatment of chronic diseases should be centralized or merged to reduce costs. This strategy is justified by the fact that specialized services are very expensive to provide. Centralizing the services will lead to cost savings through sharing of scarce resources (Wilstow 2012, pp. 5-13). For example, accessing specialists such as cardiologists who are in short supply will be easy and cost-effective if their services are centralized.

Reorganization of the Workforce

Reorganization of the workforce through professional development is required to improve the quality of healthcare. In this regard, the NHS should adopt the following strategies. First, the NHS should train more specialized medical personnel. The NHS has a long patient waiting list because of the limited availability of specialized medical personnel. Thus, it is important to train more specialized personnel to improve service provision (Charlesworth, Smith & Thorlby 2014).

Second, the NHS should focus on on-the-job training of non-specialized medical personnel (Hall, Miller & Millar 2012, pp. 49-62). Improved skills will enable the personnel to provide high quality services, thereby restoring public confidence in GPs.

Third, the NHS should deploy personnel to underserved areas. Increased influence of politicians in commissioning healthcare in the country has led to unbalanced access to care. To address this situation, medical personal should be redeployed from overstaffed to understaffed hospitals and clinics to improve health outcomes (Hall, Miller & Millar 2012, pp. 49-62).

Disease Prevention

The NHS should focus on disease prevention to reduce demand for healthcare, thereby reducing its capacity constraints. Thus, staff and patient education programs should be introduced to increase the information that is in the public domain about disease prevention. If the information is utilized appropriately, infection rates will reduce (Lombardo & Buckeridge 2012, pp. 7-20). This will reduce expenditure on healthcare and improve the health of the citizens.

Regular screening of members of the public should be conducted to facilitate early detection of various illnesses. As a result, it will be possible to provide timely interventions to prevent premature deaths (Gerlinger 2009, pp. 145-175). Moreover, chronic diseases such as cancer can be treated at a low cost if they are detected early.

Quality of Healthcare

Improving the quality of healthcare is the major strategy that the NHS should adopt to improve patient outcomes and to win the trust of the public. The NHS should introduce effective care pathways to improve the quality and safety of healthcare. Care pathways will use evidence-based clinical interventions, thereby reducing chances of medical errors. The resulting improvements in health outcomes will reduce readmission rates and strain on healthcare resources (Gerlinger 2009, pp. 145-175).

Monitor and CQC should provide guidelines and technical assistance to improve compliance. Moreover, Monitor should improve supervision of healthcare providers. This will ensure that only accredited institutions are providing medical services, thereby improving quality.

Use of Technology

Use of advanced information and communication technologies is one of the main strategies that the NHS should adopt to improve access to healthcare. The NHS should focus on using telehealth, websites, and mobile phone applications. Since majority of the population already has access to the internet and mobile phones, telehealth and websites will be convenient and cost-effective channels for delivering healthcare (Ramena & Staggers 2013, p. 14).

Furthermore, care providers should use text reminders to encourage patients to attend medical appointments. Empirical studies indicate that SMS text reminders motivate patients to attend all clinical appointments, thereby improving their health (Mitchell & Selmes 2007, pp. 423-434).

Participation of the Private Sector in Service Provision

The participation of the private sector is required to increase the capacity to provide healthcare to all citizens. The government should provide incentives to private insurers to provide affordable health insurance. As the cost of health insurance premiums reduce, more citizens are likely to pay for their healthcare. As a result, the budget deficits that the NHS is grappling with will reduce.

The government should also deregulate establishment of private hospitals and clinics. By eliminating regulations that prevent entry, the participation of the private sector will increase, thereby enhancing access and quality.

Capacity Change

The capacity of the healthcare system should be increased to meet future increase in demand for healthcare. The NHS should establish additional hospitals, care homes, and clinics to address the expected increase in demand for care. Moreover, the NHS should improve availability and functionality of medical equipment. One out of five public hospitals is not sustainable partly because of inadequate equipment (Appleby et al. 2014). Thus, the existing medical equipment should be improved to enhance clinical sustainability.

Integrated Care

The NHS should focus on providing integrated care to eliminate fragmentation of medical services, which often leads to poor patient outcomes. There should be improved collaboration among commissioners to facilitate pooling of resources at the local level to provide more services to citizens (Currie, Finn & Peters 2007, pp. 406-417).

Additionally, healthcare for the elderly and patients with long-term conditions should be centralized. Evidence from the Veterans Health Administration in the US shows that patient outcomes often improve if the services needed by specific groups such as the elderly are centralized.

Conclusion

The NHS is the leading provider of healthcare in the UK. Its main strengths include access to an extensive infrastructure and well trained personnel. Furthermore, it is capable of developing and implementing improved healthcare solutions. However, its effectiveness is threatened by several factors. These include rising demand for healthcare, reduced funding from the government, and declining quality of healthcare.

Despite its weaknesses, the NHS can still be reformed by taking advantage of the opportunities in the healthcare sector. These include the use of telehealth and partnering with private care providers. Moreover, the NHS must improve its internal efficiency to reduce operating costs. This calls for centralizing specialized services and decentralizing the organizational framework of CCGs. Furthermore, the NHS must improve the quality of its healthcare services in order to regain the trust of the public.

References

Appleby, J, Humphries, R, Thompsons, J & Jabbal, J 2014, . Web.

Charlesworth, A, Smith J & Thorlby, R 2014, The coalition government’s health and social care reforms. Web.

Costigliola, V 2012, Healthcare overview: new perspectives, Oxford University Press, London.

Currie, G, Finn, R & Peters, M 2007, ‘Spanning boundaries in pursuit of effective knowledge sharing within networks in the NHS’, Journal of the Health Organization and Management, vol. 21. no. 4, pp. 406-417.

Farnsworth, A 2012, ‘Unintended consequences: the impact of NHS reforms upon Torbay Care Trust’, Journal of Integrated Care, vol. 20. no. 3, pp. 146-151.

Gerlinger, T 2009, Competitive transformation and state regulation in health insurance countries, Edward Elgar Limited, Cheltenham.

Gilardi, F, Fluglister, K & Luyet, S 2009, ‘Learning from others: the diffusion of hospital financing reforms in OECD countries’, Comparative Political Students, vol. 42. no. 1, pp. 549-573.

Greener, I 2009, Healthcare in the UK: understanding continuity and change, Sage, London.

Hall, K, Miller, R & Millar, R 2012, ‘Jumped or pushed: what motivates NHS staff to setup a social enterprise’, Social Enterprise Journal, vol. 8. no. 1, pp. 49-62.

House of Commons 2011, Achievement of foundation trust status by NHS hospital trusts, Stationary Office, London.

Lombardo, J & Buckeridge, D 2012, Disease surveillance: a public health informatics approach, Palgrave, London.

Mitchell, A & Selmes, T 2007, ‘Why don’t patients attend their appointments: maintaining engagement with psychiatric services’, Advances in Psychiatric Treatment, vol. 13. no. 1, pp. 423-434.

Monitor 2014, What we do. Web.

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Ramena, N & Staggers, N 2013, Health informatics: an inter-professional approach, John Wiley and Sons, New York.

Rothgang, H, Cacace, M, Frisina, L & Schmid, A 2008, The changing public-private-mix in OECD healthcare systems, Palgrave Macmillan, London.

Schmid, A, Cacace, M, Gotze, R & Rothgang, H 2010, ‘Explaining health care system change: problem pressure and the emergency of hybrid health care systems’, Journal of Health Politics, Policy and Law, vol. 35. no. 3, pp. 455-486.

Schmid, A & Gotze, R 2009, ‘Policy learning in health care system reform: the case of diagnosing related groups’, International Social Security Review, vol. 62. no. 1, pp. 21-40.

Williams, S 2011, ‘Safeguarding adults at risk in the NHS through inter-agency working’, Journal of Adult Protection, vol. 13. no. 2, pp. 100-113.

Wilstow, G 2011, ‘Integration and the NHS reforms’, Journal of Integrated Care, vol. 19. no. 4, pp. 5-13.

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