Guest Blogspot: The NHS needs outstanding management as well as a legal framework, for example, to unlock the potential of the property portfolio.

The potential for improved efficiency in delivering effective healthcare within the framework of the Health and Social Care Act 2012 is enormous.  However, there will be no benefit without the management skills needed to take up the challenges. Many future decisions will involve matters where the Act gives little guidance. Past layers of bureaucracy have held back the swiftness and clarity with which historical progress has been made. Lessons from past mistakes should be at the forefront of the new way forward. In some fields medical professionals simply do not have the required expertise. What is needed is the very best advice available. If necessary, specialist areas may be best covered by engaging people of the seniority of board members of leading public companies as employees or paid consultants acting in an official capacity. The formation of expert teams is very different from creating layers of middle-management bureaucracy. Instead the experts can offer ideas and advice without having the power to implement decisions. The vision should be clear and communicated in a way that aligns the advice of the experts with the goals of the NHS.

An example of an area where medical professionals generally have limited expertise and experience is property development. The NHS is a huge organisation. It is close to being Europe’s largest employer and biggest property owner, depending on the way in which the calculations are done.  In order to preserve NHS ideals for the next generation every effort must be made to increase efficiency. The management of the property portfolio is a key part of financial planning within the NHS. The importance of the subject can easily be overlooked because the relationship with patient care is often indirect and therefore not uppermost in the minds of medical professionals, managers and politicians.

A wide range of important decisions requiring specialist knowledge will have to be taken over how to get the best value from NHS properties. Some of the many property considerations facing the NHS that will need a specialist input are considered below.

The NHS property portfolio was valued at about £36 billion in 2008. The estate comprises buildings with around 28 million square metres of floor area standing on about 7.5 hectares of land. The value of the portfolio is larger than that of Europe’s largest pure property companies (Unibail-Rodamco, Land Securities and British Land) and of its biggest retailers (Tesco and Carrefour). In fact, the estate of the NHS is similar in value to that of Walmart, the US company owning the most property. European property owners that can be argued to be significantly larger than the NHS generally relate to national governments or to special situations where property valuations are highly debatable (e.g. the crown estate such as the royal parks which are in name the property of Queen Elizabeth II; Network Rail, which owns land used for railway lines that could generally not be made available for sale for other purposes). The NHS deserves advice on property at least as good as specialist European property companies, which all have smaller estates and simpler businesses. Shops and office blocks are easier to design than hospitals.

Around 80% of NHS property relates to hospitals with the remainder relating principally to general practice. The keys to efficient management of the NHS property portfolio are therefore the design and location of hospitals and the avoidance of wasted space in them.

The right solutions need to be formulated according to local needs and to take account of what is already in place and the cost of change. Where there is no valuable property to sell, the best decision may be to keep existing buildings. What follows are examples of relevant considerations and not a universal blueprint.

As a generalisation hospitals should be located where they are most accessible to patients, staff and visitors. They should ideally be accessible by public transport and have ample available parking space. Hospitals also benefit from being in areas where land and property are cheap and where traffic jams are rare. In a small city the best location may be on the ring road. In a large city like London or Birmingham it may take too long to get from the centre to the outskirts in rush hour and so there is a need for some more central hospitals. Areas with tight planning restrictions or historical buildings may be best avoided because the most efficient hospital buildings are large and modern. Some of these considerations may not apply in all circumstances. For example, London teaching hospitals may benefit from being close to one another and to relevant London University colleges, from being in attractive locations for students and from being geographically well placed to earn revenue from private patients from abroad. There may, however, be a case for merging inner London hospitals in order to have more expertise on one site and better utilisation of facilities.

Many hospitals have buildings that are only two or three storeys high. In older hospitals there may be steps between services on different levels of the same floor which can prove problematical when moving patients either in wheelchairs or on beds. As a generalisation tall, modern multi-storey buildings are preferable. Patients in beds or with mobility limitations can be moved up and down by lift more easily than over long horizontal distances. Patients and visitors are less likely to get lost when the hardest aspect of finding their way is getting to the right floor. Finally, a tall building makes the best use of land. The design of multi-storey hospitals does, however, need to benefit from past experience. For example, the lift system needs to be fast and efficient like those in the most prestigious modern office blocks. The lifts should have the back-up of stand-by generators. Adequate fire precautions are essential because sick patients often have reduced mobility.

Hospitals should not overlook the possibility of releasing cash by relinquishing valuable sites or of reducing running costs with better designed buildings. The possibilities for renting out unneeded space must be examined. Possible tenants cover a wide range including, for example, small biotechnology companies establishing medical laboratories; consulting rooms for private patients; GPs’ surgeries; and shops of interest to patients. Very large inner-city hospitals might look at the idea of releasing land for development in return for a share of the development profit, particularly if something helpful to the hospital can be built. There are many possibilities depending on the circumstances of the hospital. Some options include a hostel for paying parents with a child in hospital; a nurses’ home; university facilities; student accommodation; a multi-storey car park; and a bus station.

The vast potential of the NHS property portfolio is great enough to justify the best support. The failures in designing a new IT system demonstrate how important good advice can be. It is essential to have some of the very best managers or advisers on the case. The sums of money are vast particularly compared to when the NHS was formed. Another major mistake in the NHS has been trying to develop in-house expertise without recruiting leading experts. The financial stakes involved justify drawing from expertise at the highest level in this country. The overriding brief would be only to do things that benefit NHS patients by making more money available for their care, increasing their comfort in hospital, improving the facilities available or making hospitals more accessible.

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About Barbara Arzymanow

Barbara Arzymanow is a Research Fellow at 2020health and is a founding director of an independent healthcare consultancy firm. She has been an investment analyst specialising in Pharmaceuticals for 25 years, prior to which she carried out academic medical research in university laboratories. Her experience, obtained entirely from outside the pharmaceutical industry, gives her a unique, political perspective independent of commercial lobbies. She has extensive experience in financing the biotechnology industry, which is vital for the long-term standing of medical research in the UK. She has always been inspired by the scientific excellence within the UK and would like to see collaborations between industry, the NHS and academia strengthened. For more information about Barbara's research and writings including submissions to Government Departments please visit http://www.researchideas.co.uk . Barbara also tweets as @barbararesearch .
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2 Responses to Guest Blogspot: The NHS needs outstanding management as well as a legal framework, for example, to unlock the potential of the property portfolio.

  1. Barbara, Your blog identifies many of the current arguments around the need for more active and indeed proactive strategic and operational management of NHS estate (owned and operated) and appears to be in general support of the recentralising of estates expertise, management and strategic development. I am not clear from reading it, however, what recommendations or suggestions you are offering to take the debate forward, although there is undoubtedly further debate to be had, and would be interested to read your ideas about future options and likely outcomes.

    • Susan. Many thanks for your support. As the Health and Social Care Act 2012 has only recently become law, my comments are directed towards operating within the Act. There is not likely to be any relevant new legislation for several years.
      Under the Act decisions over NHS property will essentially be taken locally. This approach ties in with the general policy that decisions should usually be taken at the most operationally involved level where there is sufficient expertise. The problem is that medical professionals and other local decision-takers are not normally experts in the field of property development, hospital location and design and estate management. My main messages are that the NHS property portfolio is really important financially, that the very best advice is needed on a case-by-case basis and that more debate is appropriate. The best way to achieve these objectives would be to have a central, national team employing people of the calibre of directors of large property companies or to have a panel of such people on tap within an established structure as paid consultants. The idea is that this central body would only give advice and make suggestions to local decision-takers, who would then take the decisions. The central team or panel would not add layers of bureaucratic management because it would not have any executive powers.
      The concept of an advisory team or panel that does not itself have any binding management role has worked in a number of different settings around the world. For example, the Food and Drug Administration (FDA) in the USA has a number of Advisory Committees. These comprise some of the leading experts in their fields such as practising doctors at the height of their professional speciality. New drugs are rarely approved in the USA without a positive vote from a majority of the relevant Advisory Committee, who review the evidence in detail. However, the final decision is made by the FDA, who have the statutory authority to decide differently from the Advisory Committee advice or even not to consult an Advisory Committee at all.
      The basic objective of my proposals is to have the best of both worlds: local decisions to suit local needs but access to the best advice available nationally. Local decision-takers could take advice elsewhere but the central unit should be more expert, experienced and unbiased than any alternative adviser. Advice from local estate agents, building and hospital supply firms, architects and surveyors is unlikely to be fully independent or to take full account of all relevant issues.
      It would be nice if I had all the answers but unfortunately I do not. Every case is different. The policy objective is to make sure that decision-makers are aware of all possibilities, that they have access to the best advice applying in their circumstances and that the importance of reviewing property portfolios does not get overlooked. To these ends I have set out to list some considerations that may not be obvious to everyone and to suggest a framework for the provision of advice. A secondary benefit of a central adviser is that integration within the NHS as a whole should be improved.
      I am happy to try to answer any specific questions but do not have the resources to suggest detailed proposals relevant to individual hospitals. Each one requires its own case study.

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