Guest blog: Lessons on how you self-regulate across a health economy vs a large trust

Allocate are proud to introduce guest blogger Andrew Corbett-Nolan, Chief Executive of Good Governance Institute. GGI support better governance practice to ensure organisations develop a focus on leadership and strategy. In this blog Andrew shares some of the key methods, tools, and people in your organisation you can utilise to achieve effective integrated governance in light of the new challenges, structures and ways of working that 2017 will bring.

The evolving landscape

In the last few years we have seen a dramatic and significant change in not only how healthcare is managed and provided for a given population, but also in how we conceive universal healthcare. Responding to large-scale governance failings such as at Mid-Staffordshire NHS Foundation Trust, the Sir Francis Keogh report in 2013 aimed to dramatically alter the systems approach to delivering healthcare services. A need to elevate reports focusing on quality and safety rather than simply monetary metrics was proposed and a war cry for whole system integration was made. Secretary of State Jeremy Hunt has rightly stated that the primary directive of NHS bodies was to put patients needs first and to “hear the patient, seeing everything from their perspective, not the systems interests”, consolidating the idea that NHS boards have a duty to prioritise the interests of service users over those of their organisation.

Andrew will be presenting on this topic in London in January, register to attend

While commendable and necessary, this shift in thinking presents numerous structural and governance challenges. There must be a strong clarity of purpose that allows transformation to take place effectively, and the role of partnering organisations such as NHS Improvement, NHS England and the Care Quality Commission in supporting this will be paramount. Demography and history tells us that people want to experience one health and care system, not two, and moving beyond the bifurcation between health and social care will require the national architecture, including regulation, to be responsive to this. The leadership of healthcare services spanning whole geographical regions will rely on building partnerships that are able represent all services. A singular vision emanating throughout boards of commissioner, provider, community and regulatory bodies will require astute governance management and clear strategic insight. A host of methods and tools must be utilised to achieve effective governance between organisations and we explore these later.

Initially, we must be clear about how we are to meet the needs of the health economy given the immediacy and scale of acute challenges. The first priority must be to define whether institutional reputation is fundamentally dictated by monies and financial targets or safety and quality of the provided service. A fully integrated Accountable Care Organisation would remove the need for specific board autonomy. It is therefore essential to have an emphasis placed on the need to build an agreed mandate to act on health need rather than political expediency: we need political consensus on behalf of the public, rather than a party political and ideological debate that uses the health service as a vote-shifting tool in every major election.

GGI has often remarked on the detrimental impact that short-term political imperatives can have on the health sector by forcing knee jerk reactions that confound rationale and prevent transformational progress. A detailed methodology must be provided from the centre that defines an approach to joint working and  can one that be replicated at local level, right down to the clinical frontline is crucial. All parties must agree and invest into this and it needs to clearly promote the value and necessity for the building of better models of prevention and self care.

A dynamic whole system approach to healthcare, cannot be realised unless the severe problems within social care, an area that remains chronically underfunded, are addressed and managed. Indeed, as we move to whole system thinking we must place other services such as housing under this umbrella and stop examining issues in isolation; all healthcare services operate are interlinked.

Regulators

With the creation of NHS Improvement in April this year, we have seen a push towards innovative ways to transform healthcare that encompasses the abilities, networks and support base of community resources. The challenge for regulators is to move away from the traditional focus on individual performance, instead promoting an environment in which providers and commissioners align to look across a whole system of healthcare provision. Regulators should provide clarity and guidance as to what good looks like with a clear, concise and aligned regulation framework. This must be developed in partnership with commissioners and providers.

Similarly, we are currently in a place where provider organisations are rewarded for what they do and not for what they achieve. Going forward, it is our view that the primary financial incentive across the health system must be focused on how we keep patients healthy and out of hospital. This will require a change in how performance is rewarded; we need to be rewarding outcomes as opposed to activity.

Equally important will be the way that NHS Improvement works alongside NHS England and the Care Quality Commission. In the past, criticism of Monitor and the Trust Development Authority included a lack of clarity around competition and procurement regulation or conflicting messages acting as an inhibitor rather than a support mechanism, as they were intended. This must be avoided this time round.

Of course the role of the regulator can only have so much impact when the delivery of this service will primarily be placed at the hands of commissioners, providers and third party organisations. Positive intentions will only take us so far and we must not forget that the changes envisaged in Sustainability and Transformation Plans will see multiple boards, all of a different make-up and style, having to coordinate and behave in a way they have not had to in the past. The regulatory environment must be supportive and understanding of this.

Understanding a whole system approach

For new models of care to stand a realistic chance of success there will need to be a robust and credible financial plan that provides extensive assessment and clear guidance into the constraints faced. This is especially important given the challenge and confusion amongst staff that is likely to emerge when integrating work between differing sectors. This reflects a system that currently places £9 of every £10 spent in healthcare in an acute setting. One example of a cultural difference that will need to be bridged, is that of Local Authorities facing severe organisational and sometimes legal consequences for neglecting budget issues, whereas NHS organisations are allowed to operate within a deficit with limited repercussions.

This will be a learning curve for all and will require the board to maintain a double-running development process that will allow them to implement their transformation programme as well as manage the day to day housekeeping of their organisations.

Integrated Reporting

A fundamental role of the board is to ensure that any risks to its strategic objectives are managed and addressed, and that the management / clinical workforce has the capacity and flexibility to deliver. To do this requires sophisticated levels of challenge and scrutiny. With more supports involved, committee structures becoming more complex and the potential for duplication of effort more prevalent, the ability to achieve good governance at organisational as well as local level has become increasingly challenging. GGI recommends the adoption of the integrated reporting method championed by The International Integrated Reporting Council as a means of clearly reporting value to stakeholders.

The annual cycle of business should be managed and planned in a similar fashion to that was recommended by GGI and Allocate Software’s guidance for Primary Care Trust’s clusters in 2011/12.  The overall pattern is still relevant to health bodies and board members but will need to be redefined to match the current integration agenda. Properly planning the cycle of business will help boards manage their own affairs whilst also creating space for the leadership to focus on the broader strategic challenges of implementing a new model of care.

Governance support

NHS Improvement currently recommends NHS organisations to undertake a governance review every three years and this approach should be sustained so as to ensure that new models of care have fit for purpose governance arrangements. Here we outline some core governance considerations that should inform the review of new models of care.

Regular review is vital to ensuring that committee’s remain relevant and useful. Barring audit, remuneration, mental health and charitable funds, GGI would recommend giving all committees of the board a lifespan of six months to conclude business, before reviewing their purpose and if deemed surplus to requirements, retiring them. Boards should also consider the introduction of an integrated governance committee at which finance, performance and quality indicators are looked at to ensure these areas are not considered in isolation.

As part of an organisation’s self review we would recommend the use of a Maturity Matrix. This tool allows a board to quickly assess their current performance, to gauge expected levels of achievement in the short-term and to benchmark against organisations of a similar size and kind. The need for board members and supporting partners to identify individual perceptions of achievement and then debate will be key in agreeing what needs to be done, how to limit the timescales and mitigate risk.

GGI are not fans of the traditional Cadbury / Monitor ‘comply or explain’ approach to governance, preferring Professor Mervyn King’s (Chairman of The International Integrated Reporting Council) ‘apply and explain’. We believe this carries a more thoughtful and empowering application of good governance principles. You may still have to comply / explain, but from a basis or knowing you have sought to do the right thing and you understand why. GGI utilise this approach and these tools for nearly all of our new topic discussion papers and believe it will be equally as beneficial during the transformation of health economies.

Role of the board secretary

As we step into unchartered waters, trusts’ should utilise their board secretary as an invaluable base of knowledge of community services and the context of the operation. Their ability to develop health economy networks must not be overlooked. It should be remembered that all boards have different styles, behaviours and etiquettes or as our International Associate David Goldberg eloquently put it, “once you’ve seen one board, you’ve only seen one board”. We believe that board secretaries can be effective advisors when suppliers and partners have less effective assurance systems or if in local government there is a differing of understanding and appetite for risk. For this reason we recommend better understanding their role within your organisation.

Governance between organisations

All health-centric organisations need to demonstrate they have strengthened their governance arrangements in a way that will actively develop further integration between the entirety of the health community. Governance between organisations (GBO) require a movement towards common not partisan goals. GGI’s Integrated Governance Handbook 2016 is a useful tool for boards to understand how to apply integrated governance. The pressing need is for whole health economy systems that not only deliver but that demonstrate accountability for public funds and joined up services. Perhaps the greatest incentive to engage with GBO is the introduction of STP’s.

Conclusion

It is clear that the new challenges for the future and any promotion of governance between organisations must be principle based and recognise how systems and behaviours are intrinsically linked. If we are deliver good governance and that there are a number of practical approaches that can and should be adopted as early as possible. Over the coming decade there are some key features that must be faced. GGI believe that it is necessary to be brave in both setting out and applying new ways of working but that guidance should develop into practical application. Notable advice to all of us embarking on this great governance odyssey is to remain informed of the challenges this ever changing landscape presents us. We hope that you will engage with us in developing good governance by doing as well as thinking.

You can hear more from Andrew and join this debate at the HealthAssure Directors Briefing, 31st January 2017 at The Kings Fund London, register your place