NHS should adopt new ways of working, such as joint ventures and collaboratives with private providers, Dalton report says

BMJ 2014; 349 doi: (Published 10 December 2014) Cite this as: BMJ 2014;349:g7565
  1. Matthew Limb
  1. 1London

The NHS looks set to extend the ways it runs services, including issuing more contracts to private companies to manage hospitals, after a review carried out for the Department of Health for England.

The review’s author, David Dalton, said it was “perplexing” that England had not adopted new organisational forms seen in Europe that could raise the standards of care and reduce cost overheads. He said that models such as “hospital groups” and the use of management contracts might become more widespread, along with other forms: provider collaboratives, joint ventures, integrated care organisations, and service level or multiservice chains. He said that top performing healthcare providers should share their systems and expertise to help those in difficulty.

“There will be risks in taking this agenda forward, but I am confident that the NHS is capable of managing these. The prize will be a sustainable NHS for the long term,” Dalton said. The so called Dalton review, published on 5 December,1 has 22 recommendations for national and local NHS bodies and urges them to take steps to streamline processes and speed up change.

The health secretary, Jeremy Hunt, who commissioned it, welcomed the findings and told parliament that the government would look closely to see how they were implemented.

The review looked at potential options for running NHS organisations that would deliver the financially and clinically sustainable models of care signalled in the NHS’s Five Year Forward View, published at the end of October.2 3 Dalton, who is chief executive of Salford Royal NHS Foundation Trust, led an expert panel that comprised senior NHS and independent sector figures. These included Steve Melton, chief executive of Circle Healthcare, which won a contract to run the NHS Hinchingbrooke Hospital, and Jim Easton, chief executive of Care UK’s healthcare division.

The review said that many of the current 93 NHS acute care trusts that are not foundation trusts would not reach the required quality standards for foundation status in their current organisational form. Equally, some financially and clinically challenged foundation trusts would not, if judged today, meet the requisite standards for authorisation.

But the review found that there should be no national organisational blueprint for solving problems of widely variable standards. It said that a “one size fits all” approach would not work, as there were no “right” or “wrong” organisational forms. Dalton said that what mattered most was achieving the greatest benefit for local populations, which meant “shifting the mindset” of boards away from institutional self interest towards systemwide sustainability and joint ownership and governance with other organisations. “Safeguarding reliable, high quality care to patients is more important than preserving organisations,” he said. Dalton added that ambitious organisations with a proven track record should be encouraged to “expand their reach and have greater impact.”

The review recommended that a new “credentialling system” should be developed by July 2015 that would “kitemark” the most successful organisations, so commissioners could identify those most equipped to tender successfully for contracts. It said that the healthcare regulator Monitor should be responsible for the process and that the first wave of credentialling should be completed by October 2015.

The review panel visited five countries and examined case studies from nine different hospital groups. The report highlighted a successful federated model used by UCL (University College London) Partners to deliver service commissioners’ requirements to improve the care of patients with stroke. It described how in Spain the country’s first privately run public hospital, La Ribera, had expanded across the Valencia and other regions into primary health services. Ribera Salud Grupo operates a concession under contract with the government and is held to account through a commissioner for quality standards and outcomes.

The report said that the management structure of the for-profit German hospital group AMEOS had enabled it to operate very successfully over a large geographical area, running 68 facilities in Germany and Austria and undertaking a “significant proportion of publicly funded health provision on the same terms as the public healthcare.” The group’s business model was “to identify and acquire failing hospitals and invest in their facilities and services to provide long term value.”

Dalton suggested that the slow take-up in England of these European models “may be due just as much to leadership mindset as to some of the system impediments and weak incentives. This must be addressed,” he said. His review said that the “buddying system” in the NHS should be expanded so that high performing providers could provide support to others beyond the trusts placed in special measures. Dalton called on boards of ambitious organisations to help take the review forward by volunteering to be demonstrator sites and sharing their experience.

Jennifer Dixon, chief executive of the Health Foundation, welcomed the idea that trusts who were performing well support those that were not, whether through a peer to peer buddying role or more formal acquisition, if appropriate. But she said that there were two caveats. “First, the key lies in how strong performers are identified or ‘credentialed.’”

She said that trusts were not likely to be performing well in every area and may not be skilled in the large scale change needed to achieve new models of care. Also, poor performers could be struggling for reasons that were hard to control.

Dixon added, “Second, buddying may be a stretch too far for trusts that are performing well and lead to a dip (temporary or longer) in performance. The evidence on the impact of mergers, for example, is not very positive. Implementing Dalton’s suggestions will need very close monitoring, particularly in areas of quality not included on the usual dashboards.”


Cite this as: BMJ 2014;349:g7565


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