The NHS isn't over-managed

The NHS needs more money. But the belief that it needs less management or administration is nonsense. It won't spend any new money well unless it improves its ability to spend that money well. That means it needs more management not less.

The FT has a well-deserved reputation for balanced and factual commentary on the big issues. So I was surprised to see this cliche repeated in an editorial on January 5: "There are too many administrators and not enough front-line medical staff."

Other commentators constantly repeat similar untrue cliches. On Radio 5's "good week bad week" on Sunday I heard someone claim "the NHS has more managers than nurses".

It isn't true. The reality is that the NHS is one of the most undermanaged organisations on the planet. Here are the numbers from the NHS staffing system.

There are ten times more nurses than managers and three times more doctors than managers.

And the number of managers has been falling. The numbers were cut by about 30% by the Lansley reforms because he believed the cliche ("more resources to the front line" which I've argued before is one of the stupidest in the debate on NHS policy). It hasn't obviously worked.

Just for reference here is the relative numbers of different types of staff compared to their levels before the coalition government took over in 2010:

What is notable is the steady and then sharp decline in manager numbers (with a subsequent slow increase as the system realised it had drastically overdone the cuts). Also notable is that consultant numbers are rising a lot but nursing number are steady (which suggests that recent complaint that medical productivity is limited not by doctor numbers but by the lack of nurses and support staff has significant support in the actual data).




When the bill was being debated and proposed a sharp cut in manager numbers, I tried to find some benchmarks for how many managers an organisation like the NHS might need. One crude one would be to compare the NHS against other organisations in the UK. Unfortunately the ONS only counts managers in the economy as whole and not by industry or sector (about 11% of the workforce are managers according to them). So I looked elsewhere (see the original BMJ letter reporting this here and the longer version here).

In the USA charities have to declare how much of their budgets are spent on three separate categories: money spent fundraising, money spent on their projects and money spent on deciding how the run the charity and allocate their spend. That last category is the one that might help us estimate the money an the organisation spends on management. It isn't a perfect proxy but it isn't bad. Charities, like the NHS, are not in the business of enriching their chief executives and they are under pressure from supporters and regulators to be frugal so as much of their spend should go on their purpose not on overheads. But frugality has to be balanced by the need to spend money well. Spending too little on good decisions is just as bad as spending too much.

Most charities spend more than then the NHS; medical charities often spend 3 time the proportion of revenue as the NHS. If the NHS were a charity they would risk investigation by regulators for a lack of management capacity.

There is one important caveat to this analysis. When I was looking for benchmarks I was focussing on the very heavy cuts to managers in commissioning (this was the focus of the Lansley cuts). CCGs and national bodies are the groups responsible for deciding how to configure services across the country or in a particular area. They are the people who have to decide whether it might be better to spend more in the community and less in hospitals (which traditionally dominate everything in the NHS). If they don't have the capacity to make good decisions, then the NHS is in trouble as it will be stuck with the way things currently are whether that is good for the population or not. The charity vs commissioning analysis is particularly stark for commissioners who now have so little management capacity it is hard to see how they get anything done by themselves (this, perhaps, explains their extensive use of management consultants which is often complained about by people who don't seem to understand the lack of management capacity that drives it).

But the lack of management in hospitals is also a problem. Manager jobs there should be to design effective systems, to coordinate the work of front-line staff and to do the analysis that drives and sustains improvement. This should lower the burden of paperwork and admin on doctors and nurses. If there are too few managers doing the right things then bad and inefficient processes will persist, lowering the quality and productivity of all the work done by front line staff. Improvement won't happen. And the doctors and nurses will spend too much of their time on administration instead of treating patients. IT is very obvious from the overall staffing numbers that hospitals, not just commissioners, have far too few managers.

This should be more obvious than it seems. The big NHS problems are problems of coordination and operational effectiveness. The NHS has a big issue with knowing where to spend money to make the whole system better and struggles to consistently improve or to spread best practices quickly. These are managerial in any organisation and management failure or lack of capacity makes extra spending, even when it arrives, a lot less effective than it should be. If you just spend more without knowing where the big problems are, you may well not improve the problems at all. This is abundantly illustrated by the persistent failure to analyse the real reasons for the decline in A&E performance (see my analysis).

Weak management also leaves the service incapable of resisting stupid ideas coming from the political centre. For example, Jeremy Hunt's proposal to put GPs at the front door of all A&Es is an idea that any competent analyst or manager would resist because it couldn't possibly work. Lack of management capacity leaves front-line nurses and doctors working with badly designed processes and many end up spending far too much time on administration when they should be treating patients.

There is plenty of evidence that the NHS needs more money. But even if the extra money arrives it will yield far fewer improvements than it should if the people spending it are short of management capacity. It is time to kill they myth that the NHS is overmanaged. In fact a lack of management capacity is one of its biggest problems.