One of the first things to get right in the NHS is the
language. Perhaps the use of wrong language is the expression of some
fundamental misunderstanding of the way the NHS works.
First thing to understand is that the NHS is not a business.
It is a publicly funded and mostly publicly delivered service. So the NHS has
to stop using the terms and language of business.
Let us look at the terms profit and loss. Why would the NHS
use those terms? The terms to use are surplus and deficit. NHS uses things like
trading account, when it actually does not trade in anything. NHS staff
including clinical staff in their ‘management’ courses are taught how to write
a business plan. Why? Why should people in an organisation that is actually not
doing business know or write a business plan? They should be writing a service
development or service improvement plan which is totally different from a
business plan. The aim of a business plan is to generate a profit. The aim of a
service development or service improvement plan is self-explanatory. A primary
aim of business is to be profitable – get a return on investment. A secondary
aim of a public service healthcare organisation is to stay within budget.
A private company’s money is from its sales, the NHS does
not sell anything, NHS money is derived from a budget. Technically when sales
generate more money than how much the product or service costs then the private
company makes a profit and in theory the profits are unlimited. The NHS money
is from an allocated budget, if less money than the allocated budget is spent
then a surplus is generated – by definition the surplus is limited, very
limited.
When a private company sells less or at a price less than
what it takes them to make the product or deliver the service then the company
makes a loss. By definition this loss is limited to the capital of the company
(for limited companies). When the NHS spends more money than its allocated
budget then a deficit (not a loss) happens, this money is spent for keeping the
health of the population and hence in theory it is unlimited (as a public
funded service the government can print money) though in practice a line will
be drawn somewhere when the service is delivered differently, perhaps
inadequately.
For a private company the theoretical profits are unlimited
and for a public service like the NHS the theoretical surplus is limited. For a
private company the losses are limited and for a public service like the NHS
the deficit in theory can be unlimited. Some NHS managers many not know or
understand this, many do – yet the language of profit and loss are used. Wrong
language leads to wrong attitudes and wrong expressions.
Sales for a private company can be very variable from day to
day, week to week, month to month, yet to year. Budgets vary too but not that
much. In fact budgets are assured though the amount can vary. Every NHS
clinical organisation can be assured that they will get some budgeted amount
next year, simply because their catchment population’s need remain,
irrespective of what the organisation is called, how it is structured or who
runs it.
The fundamentals are different between a business and
government organisation. The reasons, attitudes are different, the methods are
different, the language should be different. Yet the business language is used
in the NHS. When a business language is used, business attitudes kick in. When
a public service is run like a business yet the funding/accounting principles
are different people do not know where to stop. People think by making a
surplus they are getting bigger and better, they often do not. People by not
calling it a deficit and not call it a loss when they make a loss and yet they
do not really go out of ‘business’ or ‘existence’ they do not realise when to
stop. The ability to recognise a good or a bad idea gets distorted at the best
or lost. That is exactly what has happened to NHS managers – wrong language
leading to wrong thinking leading to an inability to recognise good, bad,
right, wrong. It is like a hypoxic pilot in free fall.
Let us get the language right. The language influences
understanding which impacts on attitudes. Get the language wrong and the path
towards disaster is established with the inability to recognise it till it is
too late.
©M HEMADRI
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