Funding Research

[This article originally appeared in the British Journal of Healthcare Management, Volume 10, number 4, 2004, pages 118-120. Permission from the publishers to reprint this in PolicyInsider.com is gratefully acknowledged. www.markallengroup.com/healthcare/bjhcm/]

With the announcement that the Department of Health proposes to shut the doors on the Modernisation Agency (and replace it with “ModAg Lite), can we assume that modernization has been embedded in the NHS? With a staff of some 760 people and a budget of £230 million, one might have expected such muscular resources to lead to similarly muscular changes and a massive revolution of modernization. More modest expectations though have evidently been the focus through a change management agenda, skill development and classic business process reengineering. But is this modernization?

1.1 The Never-ending story

While others may wish to feast on the bones, I would like to propose a way forward, since modernization (and we simply must find a better word!), innovation, improvement, responsiveness to the public, and responsible service development will be the never-ending story for the NHS. For these objectives are not New Year’s Resolutions, which for a change we try to keep. Health services suck up huge amounts of taxpayers’ money, and are, as has recently been recognized, one of the engines of any economy. Therefore, we need to develop approaches that recognize the importance of this, and use methods that draw on individual and collective entrepreneurialism to drive service improvement, continually, forever.

So, let us begin with a key Department of Health change objective, namely to “continue making things as straightforward and streamlined as possible and transfer some of our work to other parts of the new system to avoid duplication”.

I think this offers an opportunity for fresh thinking to encourage innovation, generate reform and advance change, without the weight of government.

1.2 Where we are, and do we want to stay here?

Structural and organizational reform of the NHS such as we have seen are likely to be eclipsed by Foundation Trust status along with more comprehensive movement toward greater local autonomy linked to patient choice. For many this is a welcomed depoliticisation of health service delivery; others may need to look at retraining, as the tub-thumping opportunities the NHS has presented are progressively eliminated. If there was anything we should have learned from the 20th Century is that centralized, highly politicized systems are monsters that spawn bureaucracies at the expense of real public service delivery and value for the tax-payer.

Let’s consider the departing Modernisation Agency. Named after the results it was supposed to achieve, it works through others, a difficult task at the best of times, requiring considerably abilities to execute strategy, not something the NHS has been very good at. Resources include money, people, and energy on the one hand, and an NHS needing to feel its way toward service improvement on the other. Perhaps the most difficult challenge facing the Agency was how to align itself with modernization in health service delivery rather than being part of the policy implementation machinery and without adding to the fog of projects, targets and performance indicators.

1.3 Where should we be?

Can we move beyond this traditional thinking and find ways really to engage with the creative energies of thousands of people, in a way that also moves the NHS away from a focus on internal change to external reform focused on the needs of citizens, using citizens to drive changes in service development? It is time to create approaches to modernization that are anchored in the system of health care service delivery and structure, and which can further enable a trustworthy devolution of power and change.

The NHS Foundation is a proposal to move innovation forward; it is all about doing more with the money!

I would like to suggest that all the current modernization funds be placed within a charitable Foundation, to be established with responsibility for funding innovation within the health sector, in the name of the people. The “NHS Foundation” would take over all the current funds that are available from the NHS (which are legion: Section 64 funds available to charities, various grants to providers and other competitive funds, plus the Agency’s substantial pot).
The real value will be to move the responsibility for health service innovation into the service delivery arena by more clearly associating change with programmes initiated at the grass-roots level. This appears to be one of the reasons for the Department’s current position on the Agency.

With the redistribution of Agency expertise, the NHS Foundation would provide financial support to innovative projects in the field. There are of course other sensible sources of expertise to achieve innovation, such as in our many underfunded institutions of higher education, which can offer the multiple benefits of knowledge transfer and knowledge utilization in addition to researching knowledge-based practice.

I would suggest that the NHS Foundation receive an initial endowment from the government, with additional resources provided on an annual basis as appropriate. Certainly, the initial endowment should be a one-off donation of no less than £200 million, which should generate enough annual income to fund the start-up phase. And all this would begin with a “founders’ conference” involving all stakeholder groups, to write its charter of social objectives, and establish the founding board.

Given that the NHS Foundation would operate under existing rules for charitable organizations and foundations, it would enjoy the accountability that all such organizations are required to demonstrate. How to do this is well-established and offers excellent guidance on governance, objectives, and operations. One advantage here is that this is a familiar approach that does not need to be invented, and reflects what is seen by many as an appropriate approach to social problem-solving and innovation.

NHS organizations seeking funding for projects would apply to the Foundation which would, in turn, have various funding programmes – e.g. small grants, major projects, multi-year, infrastructure, R&D, innovation grants, etc. – all designed to fund innovation and change. As a Foundation, it would be able to receive funds from other organizations, as well as support any projects that would enable health service objectives compatible with its founding social objectives.

The Foundation would also support the development of the multiplicity of providers that are increasingly becoming part of the NHS. It is inconceivable that as the NHS moves toward a plurality of providers that only certain types of providers would be eligible, as clearly this would inhibit the fullest development of innovation and change across the delivery system. Eligible organizations should encompass all current NHS organizations, PCTs, GPs, other professional groups, Foundation Trusts, and independent sector providers with state (NHS) contracts, and other contract providers to the state such as hospices, nursing homes, residential care homes, etc. This level-playing field will offer an additional spur to the development of innovation.

Organizations committed to the furtherance of modernization and innovation in health could align their own objectives to that of the NHS Foundation, thus opening up links to wider communities of interest.

The benefits are many, timely, and should be welcomed

1. A single organization assumes responsibility for funding to offer long-term, endowed, financial stability, removing the risk of short-term budgetary adjustments that arise governmental funding. The funding of the modernization and innovation agenda is stabilized and established as a mainstream element of health service delivery and development, across the whole health system. An administrative benefit would be to regularize application and award procedures for the existing diversity of Departmental funds.

2. A Foundation is consistent with initiatives taken elsewhere within the NHS (and other parts of government) to regularize the health service through new entities such as the new oversight and regulatory organizations.

3. The Department of Health can focus on policy development in health, and not on “NHS health service policy development”, a much-needed step in a mixed economy of health provision.

4. And most importantly, it embeds modernization and innovation in health service delivery as activities with public accountability, with public scrutiny of both funds, and programme activity.

We must all become entrepreneurs if public services are to reform to meet the needs and expectations of citizens. Health is not an exception.

This proposal outlines a new way to achieve that objective.