Waste not, harm not: The moral case for efficiency and productivity in healthcare (part 2)

Summary

This is the second of three articles where Professor Clive Deadman argues that driving modernisation and productivity improvements in clinical care is a moral necessity. Clive examines why unwelcome change is so difficult to implement and considers solutions for our NHS. It contains extracts from the recently published ‘Risk, opportunity & Performance: The art of taking worthwhile risks'.

Content

What makes healthcare so different from everything else?

In my first article, I looked at the fundamental characteristics of patient care and acute medicine that make it different from all other aspects of human activity. A survey of 650 business leaders from all industries from across the world indicates medicine has one of the highest levels of un-managed complexity of all human activities.[1] This make it extremely difficult to supervise and drive performance. I discussed the lack of good management information, which is needed to justify difficult clinical business decisions, such as the reallocation of resources. Adding funding is easy but taking it away from anywhere is difficult to justify. This makes value management and optimum decision making exceptionally hard. This issue affects healthcare systems worldwide, not just our NHS.

Why does this matter now?

Worldwide national tax burdens, debt, and the rising cost of essential services, defence and climate change are creating irreconcilable pressures. Historically, healthcare has been considered a special case and one of the highest priorities. However, it must eventually demonstrate efficiency and effectiveness if it is to continue to attract the funding and public support it needs.

What does this mean for our NHS?

The NHS’s size and scope are both its greatest strength and its greatest weakness. In September 2024, Lord Darzi published the results of a thoughtful review into the state of the NHS. He concluded that it was "in serious trouble" and that, despite significant increases in funding and numbers of clinical staff, there had been a long-term decline in public health outcomes and productivity.[2] But let us be clear, this is not due to a lack of effort by staff. Most staff are hardworking and compassionate, but also driven to become disengaged and worn down by a system that seems to be designed to make it hard for them to do their job or punish them for the slightest error.

Lord Darzi’s report details 28 excellent findings and recommendations. These recommendations call for a redirection of resources, for backlogs to be addressed and for workforce improvements. The recommendations are widely accepted as the right ones. The purpose of these recommendations is to improve the productivity, efficiency and effectiveness of the NHS and make it a better and happier workplace. But implementation will be hard.

Previous reviews by Lord Darzi and other commentators have already recommended many of these changes, but implementation has repeatedly failed and performance has continued to deteriorate. Let’s look at how other simpler, less complex industries modernised and formalised themselves and see if there are any ideas of merit we can use.

The three stages of improvement

Modernisation and improvement in all industries started with productivity and industrialisation, before focusing on quality control and, finally, requiring compliance with legal and regulatory standards. Modern progress started in Italy in the renaissance period in high-value industries, such as banking and insurance, where information was good and supervision of individual transactions was possible. In the last two centuries the industrial revolution transformed manufacturing and, more recently, an information revolution is changing all aspects of commerce and leisure.

Modernisation and improvement has inevitably been resisted by vested interests. The automation of manufacturing was transformational for customers but has resulted in craftsmen losing prestige, power and wages. The work of F.W. Taylor, one of the most visionary thought leaders of the industrial revolution, illustrates the challenges that faced large-scale modernisation and change. Taylor undertook meticulous time and motion studies of productivity and demonstrated simple improvements at the Bethlehem Steel Works could quadruple productivity.

In practice, implementation of these new ways of working was only possible if workers shared in the benefits of increased productivity. In 1903, attempts to introduce performance-related wages made him unpopular with union leaders and led to Taylor being dismissed from the steel works. In 1912 a strike at one of his client’s factories would later lead to a congressional inquiry.

The cumulative benefits of these productivity improvements have been enormous. In his book “Enlightenment Now”, Steven Pinker describes the exponential increase in global wealth, driven by automation and industrialisation, as humanity’s "great escape from poverty".[3] This wealth has doubled human life expectancy: 80% of this increase has resulted from better food, housing and social conditions. The remaining 20% increase in human life expectancy has been provided by advances in clinical and medical care, itself wholly funded by automation and industrialisation.[4]

Need for a greater focus on productivity

Discussions about improving productivity often make people uneasy. Some conclude, unfairly, that it is a classic ‘zero sum game’—more work for less pay. Instead, let us think through what this can mean for patient care and safety, and our own well-being and job satisfaction.

A ‘word cloud’ of NHS England’s 2024/25 priorities and operational planning guidance[5] is shown here:

These ‘word clouds’ are not a robust analytical tool, but several matters cause pause for thought. It is good that inequality management is clearly a major priority. The frequent use of management consulting words, such as ‘support’ and ‘collaboration’, may be helpful if it leads to improvement. But given the significant and recent decline in productivity identified by Lord Darzi’s recent report, a lack of emphasis on words such as ‘productivity’, ‘innovation’ and ‘change’ is disappointing. Furthermore, the greatest focus in our word cloud appears to be on the ‘NHS’ itself. In 1992, John Kotter and James Heskett published a ground breaking analysis of the cultures and long-term financial performances of 207 corporations.[6] They observed great organisations had an authentic, strong and balanced purpose to serve all their stakeholders. In contrast, poorly performing and unhappy businesses were unable to keep a powerful and balanced focus on serving customers, staff and funders. Those organisations became more interested in themselves.

Pot banging and public support for our NHS institution is all very well, but we need our NHS to be even more successful and productive than is the case now. There are dangers if the NHS believes it is more important than its purpose. Such thinking will make necessary change and modernisation even harder to achieve.

In my final article, I will look at how we might support those visionary NHS leaders who wish to cut through the administrative and cultural barriers that hold back productivity improvements and modernisation.

References

1. Deadman C. Risk, Opportunity & Performance: The Art of Taking Worthwhile Risks. Troubador: 2025.
2. Summary of Lord Darzi Letter to Secretary of State for Health & Social Care: November 2024.
3. Pinker S. Enlightenment Now, 2018; Chapter 8; Wealth: Penguin 2018: ISBN: 978-0-141-97909-0.
4. Kaplan RM, Milstein A. Contributions of Health Care to Longevity: A Review of 4 Estimation Methods. The Annals of Family Medicine, 2019; 17(3): 267-72. DOI: https://doi.org/10.1370/afm.2362.
5. NHS England. 2024/25 priorities and operational planning guidance. April 2024.
6. Kotter JP, Heskett JL. Hewlett-Packard case study: Corporate culture and performance. Chapter 5.The Free Press, 1992: ISBN: 978-1-4516-5532-2.

Blogs in the 'Waste not, harm not' series:

• Part 1
• Part 2 
• Part 3

About the Author

After starting work as an engineer in Africa, Clive spent 9 years in private equity/corporate finance and then 20 years with United Utilities and Electricity Northwest.

In recent years Clive has worked as and Chair, Audit & Risk Chair and Non-executive Director for a range of organisations, including the NHS and several social housing providers. He is continually researching and writing and is a Professor of Water and Energy at Cranfield University.