Business language in a public service NHS is wrong

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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NHS in India - be aware of what it means

This blog post was originally published as a guest editorial at Soumyadeep Bhaumik's Caffeinated Works & Random Musings which is one of the largest healthcare blogs in India

(http://soumyadeepb.wordpress.com/2013/01/04/the-uk-nhs-in-india-be-aware-of-what-it-means/)
Reposted here.

I follow Indian healthcare with some interest.

I have wondered about 'why do doctors who work in India and want to continue to work in India take up exams such as FRCS, MRCS, etc?' Many of these exams are conducted in India. I suppose I should give those doctors the benefit of the doubt and think that they do it as a part of knowledge improvement and knowledge validation with an international perspective. Many though may have commercial marketing motives. I ask myself if the content and the style of these exams are suitable for non-western practice? I think not, but that is purely my view.

Now the news of NHS wanting to go to India. The NHS in UK is a government funded public service healthcare system. Is that the model the NHS will follow in India? The NHS in UK is increasingly outsourcing its activity to the private sector and inviting private sector in to the NHS. However, the NHS in its new wisdom may be choosing to go to India to provide services as a private provider. Which is the exact opposite of what the NHS does here in UK. The policy and strategy confusion seems to be immense and contradictory. The NHS currently does not have any great operational experience of purely private provision.

Why would the Indians allow the NHS to do the exact opposite of what they do in UK in terms of business model, inside India? It is a question that should be asked in the Indian parliament; I am sure it will be asked if and when trouble arose.

More relevantly, why would the NHS itself want to do this? The reasons are not that difficult to fathom. India is a growing market in general, healthcare is a really high growth market, there is a clear need for more high quality providers. The non-commercial UK NHS wants to take commercial advantage of these factors to make money for UK. It is nothing else apart from money making. Money making in itself is not such a bad thing, only to couch it in the language of healthcare improvement, helping populations, transferring expertise, spreading knowledge and other obviously superficial euphemisms reflects poor intentions. I am a believer in the primacy of intentions.

I wonder if the NHS would still go to India if it was required to provide 72% of its Indian services in rural India (that is the percentage of population that lives in rural India) to the same standard and more or less the same price that they provide in urban India? I ask because that is exactly what the NHS prides itself in UK; providing more or less the same standard of service at more or less equivalent costs all over UK. Well, if you want to be an international business thats how you begin to think; Coke and Pepsi do that, produce soft drinks, distribute it to all corners of India at almost the same price; which is exactly what they do anywhere in the world. Will the NHS do in India what their business model does in UK? Would the NHS in India treat the rich and the poor equally as they are required to do in UK?

I suspect that is not what the NHS in India will be about. I sincerely hope the NHS in India will make me eat my words as that will be a win-win for everyone.

The principles of care, content of education, models of care delivery that are needed in India are different. India is perhaps already suffering from a techno-centric, finance driven, western oriented, urban focussed, doctor obsessed healthcare system. As long as we are clear in our minds that whether it is examinations such as MRCP/FRCS/MRCOG/MRCGP which are conducted in India or a possible NHS as a provider in India are simply commercial businesses operating in India for profit making; as long as we recognise and be constantly aware of this its fine. Once we start assigning higher value, philosophical or operational, we will be doing a disservice to the Indian public by deliberately misleading them. Those of you who are highly sensitive amongst the Indians should also reflect on whether this is a form of cultural and knowledge colonialism.

I am British and work in the NHS. I am an admirer of the NHS system and I believe the NHS in UK does a great job in terms of many clinical, operational and cost parameters. It is my vested personal interest that NHS in India is successful commercially. I am of Indian origin and have family in India, hence creating awareness of potential sub-optimisations is probably my broader duty.

M. HEMADRI

Follow me on twitter @HemadriTweets