In a system with many interdependent parts trying to optimise the parts separately doesn't optimise he whole. Local optimisation doesn't lead to system optimisation. This is a lesson NHS management needs to learn in many areas from how emergency care is managed to how the costs of diabetes are minimised.
There is an old (possibly apocryphal) story about the perils of central planning. Stalin issues a demand that factories improve their productivity by producing more output for the same number of hours worked. Some clever factory manager realises that the switch from producing left-footed shoes to right-footed shoes wastes time so he mandates that the factory only produces left handed shoes. Output of shoes rises significantly and he makes his productivity target. But, of course, this is terrible for the people as one left shoe is useless by itself (unless you are a one-legged war veteran who lost his right leg and there are few of those not least because war injuries don't discriminate which leg is blown off).
If your local metrics are wrong, factory productivity is not a good indicator of system productivity.
But this sort of naive focus on local metrics is, even now, a big problem in the NHS (which also suffers many of the other problems inherent to centrally planned systems).
The NHS is short of managers and is particularly short of skilled managers. The system sometimes seems to hate them not least because many politicians seem to regard them as parasites who suck resources away from the heroic front-line staff (even Sumproduct Phil's newfound largesse came with the warning that the extra cash should go to the frontline not the "bureaucrats"). But managers are necessary in any system not least because a poorly organised and coordinated system will function badly however many "front-line" staff it has.
One particular failing of management-lite systems is that there is nobody to do the system-level thinking that makes that coordination work. So, many management decisions are divided up into smaller decisions that can be made locally with no attempt to consider the system-level consequences. This is one factor leading to poor system productivity. The drive to improve system productivity is reduced to a set of local initiatives to drive up local productivity and, like the shoe factory, this doesn't achieve its intended goal.
Optimising A&E doesn't fix the A&E performance problem
Take, for example, the drive to improve A&E performance. It is all too common for this to be seen as a problem for the A&E department. So local managers devise local initiatives to improve staffing, reorganise flow, divert patients, develop clever ways of dodging the 4hr metric and so on. But these don't work. So leaders put more pressure on staff to work harder and do better. But the staff are demoralised from all the previous initiatives and become burnt out, increasing turnover and continuity. The initiatives repeatedly fail; morale and engagement fall. More pressure is exerted and the downward spiral continues.
I've ranted about why this happens plenty of times. But the key point here is that poor A&E performance isn't (mostly) an A&E problem. It is a system problem. Much of the problem is a failure of flow through beds (which are not controlled by the A&E department but by the specialites running wards). In turn, some of their problem is caused because the hospital is not in control of the systems in the community that can get patients the appropriate community care they need.
This problem needs joined up thinking to create any hope of a solution. Trying to fix it by putting more and more pressure on the A&E department is futile and, if anything, makes the overall problem worse.
Local optimisation doesn't lead to system optimisation.
Minimising the cost of blood-glucose testing doesn't minimise the cost of diabetes
In another example recently I heard of some CCG attempting to use RightCare metrics for the cost of diabetes blood-sugar tests to drive lower spending. Now there isn't anything wrong with trying to use the cheapest effective technology as this frees up money to use elsewhere for other treatments. All other things being equal, CCGs should aim to use the cheapest technology that does a good job. But all other things are not equal, and some of those other things matter a lot.
The problem here is that diabetes is a complicated area and what you do with testing affects the need for treatment elsewhere. The background is that diabetics with good blood sugar control have far fewer complications in the future. But it is also important to note that most diabetics do not test their blood-glucose often enough to achieve good control, partially because pricking your fingers 10 times a day in inconvenient and painful. We just don't prescribe enough blood-glucose test strips for all insulin using diabetics to test as often as they should. There is a reasonable case for saying CCGs should encourage more testing (or new technology like the Freestyle Libre continuous glucose monitor which, in effect, allows 24hr continuous testing for the same price as the recommended levels of finger prick tests).
But the easiest way to control the cost of glucose testing is the limit the number of test strips issued to that CCG's population. That is picking the wrong metric for the wrong local optimisation. Sure, if you limit the number of test strips issued you will look good on the spending metric compared to other CCGs. But your diabetics will do fewer tests, will have worse glucose control and will end up with more diabetes complications.
And this is really, really bad for the system as a whole. To see why look at the overall costs of diabetes. A recent estimate puts the cost of diabetes to the NHS at around £10bn/year. Drugs alone are only about 10% of this, costing a smidgen under £1bn in 2017 in England. Blood-glucose monitoring costs <£200m out of that total. Most of the rest (certainly 75% of it) is spent dealing with the complications of diabetes (in the long term many amputations, many cases of blindness for example, are caused by diabetes but, even in the short term, poor glucose control leads to many hospital admissions for high or low blood sugar which can be life threatening if not treated promptly).
So trying to limit the testing spend (the <£200m) might be good if considered in isolation. But it doesn't look so good if it involves any risk at all of increasing the multiple billions spent on complications. Which it does.
So far I don't know many CCGs trying to limit the spend this way. But most of them are guilty of making a similar sort of choice when it comes to new technology for testing blood glucose. Abbott's Freestyle Libre is a wearable monitor that tests blood glucose every few minutes to give a complete 24hr profile that provides the sort of insight that enables diabetics to achieve much better control. Libre would cost about £900/yr if CCGs made it widely available. This is about the same cost as conventional testing for diabetics who test 10 times/day (which is what they need to do to get good control as NICE advises). But most diabetics don't test that much so moving to Libre would cost more and CCGs are resisting that switch (and inventing incoherent clinical reasons to justify that stance). None of the CCG documents justifying this stance even mention the other costs of diabetes or how they could be improved by more blood-glucose testing leading to better control.
Their local optimisation of the cost of glucose testing is a catastrophe for the total cost of treating diabetes across the whole NHS. Even a modest improvement in average blood-glucose control would yield a huge gain in the cost of complications. This will never happen if all CCGs consider is the local cost of testing.
In a complex system like the NHS local optimisation is dumb
The point uniting these two, very different, examples is they both involve local optimisation and a failure to think how one part of the NHS is connected to other parts. Trying to fix the whole NHS by telling its parts to maximise their productivity or minimise their costs doesn't work.
Every part of the NHS needs to understand how it fits into the system and how it interacts with the other parts. And everyone's goal should be to make the system work better not just their little, local part of it. Productivity in the NHS won't improve if we don't