As the NHS turns 70, eager anticipation is gathering around Theresa May’s pledge of a ‘10-year funding settlement’. Even if all sensible analyses are pointing to the higher end of 3–4% real spending growth per year, will the actual investment come close to that? And where should the cash be spent?  It is a critical moment for all concerned in the health community with key figures suggesting new options for where investment could focus. But what is clear is that the Treasury will need to be convinced that any investment will result in a visible improvement in services.

With the economy and productivity limp, the causes likely to be structural rather than temporary, and a decade of flatlining wage growth, the prospect of extra investment to match that of the Labour government in 2000 (over an extra one third of the NHS budget in real terms over 5 years) is remote. Workforce shortages and difficulties sourcing new staff are acute. The backlog of capital and revenue investment in the NHS is high, and the state-funded social care offer more threadbare.  Despite this, arguments for extra cash will need to pass a higher bar than usual.

That means harder evidence to link investment with tangible outcomes. Who would argue with that?

Except it is easier to link outcomes to some forms of investment than others. Investments in some key services can be shown to have results, for example care for cancer, heart disease, diabetes, even primary care. But investments in more basic and generic ‘infrastructure’ that makes the NHS tick, such as boosting management skill, new facilities, looking after staff, skilling clinicians up in quality improvement, digital infrastructure and data analysis, are less easy to track into specific outcomes. As any industry knows, these are the right things to do and on which future success is built - they are largely a given.

As I discussed recently in the NHS Confederation’s inaugural lecture in Parliament, there is some evidence on the effectiveness of boosting management.  Two academics, Nick Bloom and John van Reenen, over the last decade examined thousands of industries and found that management is the single most important factor which influences productivity and value – above technology. If good management were a technology, everyone would be investing in it. In the NHS, the management asset is underexplored, undervalued and does not get enough air time in policy debates.  Without it, investments in new innovations will lack impact and fail to spread, and attempts to standardise practice will be too anaemic to close the gap on the variations we increasingly know exist. Recent analysis from the Health Foundation demonstrates that to spread innovation, the focus must be less on the intervention, and more on the context.

There is still no strong view as to how best the UK’s largest and most high-profile ‘industry’ (let’s frame it like that for a second) should best be managed. For example, ‘this is how we approach management in the NHS and why; this is what we’ve learned from high performers and from twinning; this is how we are going to learn from other countries, other industries, and so on’.

At least, that normative view hasn’t been articulated well or loudly enough to shape investment and reform. Government can hardly be expected to know the answer – politicians and civil servants haven’t generally managed anything as complex as the NHS. That’s why, in moments of frustration, they’ve turned to senior business figures to advise them, from Roy Griffiths of Sainsbury’s, to more recently Stuart Rose from M&S.

The lack of a firm consensus on what makes good management and what is a robust case for more investment could be linked to the fact that for the last 30-odd years, until very recently, we’ve considered the NHS less as one public service or ‘industry’ and more as a collection of semi-autonomous units (hospitals) or private small businesses (GP practices). Or it could be that managers are just working too flat out to develop a collective view and voice it convincingly.

As we go into a possible next round of investment and reform, could NHS managers develop into a stronger force and develop a convincing case? What would it take to build a stronger consensus as to what works in management to speed up improvements, in particular productivity? This would mean working up a practical strategy for boosting quality improvement at the front line, building the networks and data analysis to support it, and demonstrating the leadership style to match. It would mean developing more evidence to push back at government when needed, using the examples from high performing organisations. It would mean understanding more about good management and challenging poor management, less through regulation and more through stronger peer networks. Investment will surely help, but that may be the lesser part of the story.

Jennifer Dixon is the Chief Executive of the Health Foundation

This blog was first published in the HSJ

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