The principles of ‘externalisation’

back officeThe UK Government is encouraging public services to ‘externalise’ aspects of service provision and support.  ‘Externalisation’ is considered, politically, to be completely different from ‘privatisation’ since, crucially, the ownership of the service remains with the State, which simply funds the service as opposed to providing it.

It may be surprising to some people in the UK that this principle is well-established in the public sector, not least, by the General Practitioners’ contract (General Medical Services); GP’s are not employees of the NHS, rather independent contractors to the NHS.  This fact is often overlooked by those who campaign to ‘save the NHS from privatisation’!


Externalisation, therefore, means that aspects of a public service can be provided by organisations not directly controlled by the State, such as:

  • Commercial companies
  • Voluntary groups
  • Charities
  • Other parts of the public sector not normally involved in a particular sector or area

The scope of externalisation can vary from joint enterprises, through to partial or full outsourcing.

The aim of externalisation is to produce:

‘A vibrant, dynamic and innovative service sector, which provides customer focused support and choice to CCGs and the NHS CB and helps them to go the extra mile, by supporting the local focus on improving outcomes and increasing value (outcomes per healthcare pound spent) on behalf of their population’. 

(Developing commissioning support: Towards service excellence, Feb 2012)

A guiding document regarding externalisation is ‘Building high quality commissioning: What role can external organisations play?’  (Kings fund, July 2010).  It concludes that:

  • Providers of external support add most value when:
    • they are used proactively to help commissioners develop towards a long-term strategic vision of how their organisation should function in the future
    • they bring something new – by introducing new skills, tools and processes or by supporting transformational change in terms of organisational structure and culture.
  • As far as possible use external organisations to support strategic development rather than in response to short-term imperatives [and should have] a vision for how commissioning should function in the future
  • External organisations seem particularly well placed to provide support with the analysis and application of data
  • Use external support to do more than increase capacity to do routine tasks.  The goal should usually be to add something new to develop capabilities or to transform the culture or structures of the organisation. Consider entering into longer-term arrangements to achieve more fundamental change
  • Choose the right model for external support on a case-by-case basis, with reference to the different merits and challenges of consultancy, joint delivery and outsourcing models
  • Avoid using external support for long-term substitution of manpower or to cover vacancies
  • Avoid thinking only in terms of technical fixes or silver bullets – external support can also help with the fundamentals, for example the more relational aspects of commissioning.

NHS England, formerly the NHS Commissioning Board, emphasises that support services:

  • need to be reshaped to enable rapid transition and to aid their future sustainability
  • should aggregate demand
  • should work across cluster boundaries to achieve economies of scale where possible as part of developing viable models of commissioning support
  • must be headed up by good leaders and have an articulated plan for delivery
  • are sensitive to local needs
  • think about partnerships that may radically enhance the offer to commissioners, particularly in helping the system move from input/output management to commissioning for outcomes.

Externalisation in the public sector of the UK offers great opportunity for the IT industry.

Further reading:

British Standard 11000 ‘Collaborative business relationships – a framework specification

Building high quality commissioning: What role can external organisations

play?’  (Kings Fund, July 2010)


qualityIf you look for a definition of ‘quality’ in the management literature, you will get many. Quality, it seems, means different things to different people. In healthcare too, there are lots of different definitions. However, the NHS has produced its own, which is ‘official’, in that it is enshrined in the new Health and Social Care Act 2012:

  ‘The NHS is organising itself around a single definition of quality: care that is effective, safe and provides as positive an experience as possible‘. (National Quality Board, 2012)

The reason this is of interest to me, is that it calls for a new approach for supporting collaboration across the system based on ‘the sharing of information and intelligence through a new network of Quality Surveillance Groups’.

So, the information in IT suppliers’ systems will increasingly be used to produce intelligence for such quality groups. There is, therefore, a clear opportunity for business intelligence and consulting, and also provides the opportunity to highlight how such systems help fulfil quality reporting.


pestle 2Political

There is a new Secretary of State in place, Jeremy Hunt, who appears determined to ‘pick a fight’ with the medical profession over, by-and-large, productivity.  A new contract appears likely.  Remember that GPs are not employees of the NHS, unlike hospital doctors, who are.  Productivity continues to fall in the NHS (or, at best, stagnate).

The new CEO of the NHS, Simon Stevens, has also recently been appointed.  He is perceived as an ‘outsider’ and this is a clear signal to the NHS that large-scale change is required.

Commissioning Support Units (CSU’s) are to be ‘externalised’ by 2016.  The IT industry could play a major role in this large-scale outsourcing activity.

Caldicott 2 emphasises the sharing of patient data1.


Whilst the UK economy is growing relatively strongly, there is a public sector lag.  This means that the recession will continue, or increase, as far as public services are concerned for several years yet.  The only game in town at the moment for NHS Trusts is saving money, i.e. cash-releasing activities that address the bottom line.  Upwards of 30 NHS Trusts are, or very close to being, bankrupt.  This means they will require ‘bailing out’ from central government within 12-18 months.  Mergers will increase, as will sharing services.


The ‘Winter A+E crisis’ is a good example of the vulnerability of the NHS to systemic shocks.  Hospitals desperately need to keep patients away in order to avoid breaching waiting time targets.  At the same time, they lose money if they treat fewer patients.  This ‘catch 22’ situation could be addressed by changing the financial model to reward new pathways of care and reduction in re-admissions, etc.  Such ‘care co-ordination’ is a major theme of  global healthcare strategy, but isn’t mature in the UK context yet.

There is still a need to combine financial, administrative and clinical information across organisations.  This could represent at ‘big data’ opportunity for the IT industry.


Business intelligence is woeful in the NHS.  HSCIC has produced a tool to help Trusts recognise where they are on the journey to a ‘paperless’ NHS’, called the Clinical Digital Maturity Index (CDMI)2.  This will be the metric used to assess progress.  Interoperability is essential, and the IT industry must ensure integration, for example, via the Medical Information Gateway (MIG), as well as meeting all ITK standards, etc.

Simplistically, clinicians must be able to view the patient’s record across organisational and technical boundaries.


How can the IT industry help beleaguered Trusts manage their burdensome regulatory compliance?  Many Foundation Trusts are close to breaching their licenses to operate.  The Keogh Review3 has indentified a dozen or so Trusts requiring ‘special measures’.  How will IT solutions and services help?


The ‘Green’ IT agenda has been adopted by the UK Government.  This includes, political imperatives e.g. QIPP, some of which can only be achieved electronically, others which would be extremely difficult to do without electronic systems.  Telehealth could help, but there is little appetite amongst doctors.

Outsourcing: IT departments in hospitals are often low-status and variable quality.  There is the opportunity for the provision of high-quality, reliable, modern IT facilities, especially in ‘cloud computing’ environment.  The ‘cloud’ could probably host all the NHS’s IT requirements!


  1. Caldicott review: information governance in the health and care system
  2. CDMI
  3. Review into the quality of care and treatment provided by 14 hospital trusts in England: overview report

When rules are barriers

a to bI saw a photograph of a hospital outpatients department from 1904.  It looked remarkably similar to my hospital today; lots of sad, bored-looking people waiting patiently to be seen.

When you think about it, very little has change in the basic process of medicine.  The patient identifies that something’s wrong with them and they try to find another person, who might know what it is and be able to help.  You could illustrate it like this:

Patient has a problem

Doctor has a solution

The bit in-between

The starting point is the same as it always been:

  • You notice something’s gone wrong (react to a problem)
  • You search for some help from an ‘expert’ (this could be informal or formal)
  • The ‘bit in-between’ can take a circuitous path, a long time and may never work out

In theory, this process should be amenable to great improvement using information and communication technology.  It’s really just about bringing a problem and a solution together, which IT is great at doing.  So, why don’t we do it?

In short, I think it’s ‘culture’: the way we do things around here.  When you’ve got something wrong with you, you’re vulnerable and tend to default to what you know.  The doctor has a vested interest in your need (he/she has great status and earning power by meeting your need).  So, both parties are in a comfortable relationship.  In transactional analysis terms, it’s like a ‘parent-child’ relationship.  Both parties know what’s expected of their role and there’s no pressure to change.

But, it’s the ‘bit in-between’ that’s the problem.  It’s full of frustration, wasted time and poor outcomes.  The NHS seems to institutionalise these poor processes.  It is incredibly resistant to change, as any effort to change is immediately seen as an attack.

However, ‘culture’ does change, be it ever so slowly, as the way that people interact day-to-day changes.  IT changes the way we interact, think of social media, texting, messaging, etc.  These external social changes will permeate healthcare and slowly shift the status quo.  Doctors, who rely on possessing ‘elite’ information will be particularly vulnerable as patients will be able to garner the same information for free.  GPs will be especially at risk as they represent an intermediary, or ‘middleman’ between patient and expert.  Disintermediation has a proven track-record of making processes more efficient (think of buying insurance, for instance). 

A practical illustration is rectal bleeding.  Algorithms exist for improving decision-making concerning those patients with bleeding from their anus.  A few simple questions sign-posts the patient to the appropriate specialist without the need for a generalist intermediary.  This saves time, money and suffering.

At present, such a system would be ‘illegal’ in the NHS, since there is a rule as old as the hills, which states that no patient can access a specialist without going via a GP.  Such anachronistic rules act as barriers to innovation and until they are changed, they will effectively inhibit process improvement.

The ‘rules’ are created by politicians and advisers at a ‘high’ level, and operationalised by NHS managers at a ‘low’ level.  By the time they reach the ‘frontline’ they can bear little relation to the original intention, having been altered by misinterpretation, misunderstanding, and sometimes deliberate sabotage.

So, the NHS is in need of deregulation, that is, removing unnecessary rules that simply preserve the current, mediocre system.

‘A time to be born and a time to die’ (Ecclesiastes 3:2)

a time for...This may come as a shock to you, but you’re going to die!  From a human perspective, the ultimate outcome of life is death.  The rate of mortality is 100%, i.e. everyone born dies.

It may also come as a surprise, then, that the trendiest quality measures for hospitals relate to mortality:  the Hospital Standardised Mortality Ratio (HSMR) and the Summary Hospital Mortality Index (SHMI, or ‘shimmy’).  The theory goes that hospital quality and mortality rates are inversely related: the higher the quality, the lower the mortality rate.

To be clear, HSMR/SHMI relate to particular cohorts over particular time periods, and they provide a number, which shows whether there are more or fewer deaths than expected.  This, ‘expected’ bit is crucial; it relates to historic data and is the sum of the estimated risks of death.  A HSMR/SHMI of 100 is ‘average’, meaning that 50% of hospitals will have lower than ‘expected’ and 50% will have higher than ‘expected’.  Unfortunately, statistical niceties are lost on most of the public and journalists, so phrases like, ‘worse than it should be’, or ‘2,000 excess deaths’, are commonly heard.

There is huge debate and argument amongst the medical community about the validity and reliability of HSMR/SHMI, but the upshot is that they are here to stay and hospitals are judged on them.  Mortality ratios are to hospital bosses what the share price is to the CEO’s of listed companies; they live or die by them!

I have attached a couple of documents that explain the ratios.

Understanding HSMR


Zero harm

zero harm

Zero harm

It’s fashionable in healthcare management circles to talk about ‘zero harm’.  The phrase implies a zero tolerance of anything that might possibly harm a patient, a kind of guarantee that no patient is harmed in this hospital. At its centre is perhaps the idea that if scrupulous care is taken in everything, including the small things, then the big things will take care of themselves.  If we eliminate the possibility for error then no harm can ensue. It’s a bold claim; can it be achieved? 

In some ways, it’s akin to the old medical aphorism, attributed to Hippocrates, ‘Primum non nocere’, ‘First of all, do no harm’.  There are nice differences however.  First, do no harm, means:

  • Do nothing unless it helps
  • Don’t make the patient worse

The principle is non-malfeasance, not intending to harm.  At medical school, students are taught ‘never say never’, if a patient asks, ‘is this dangerous?’.  There is nothing in medicine that is risk-free.

I like another aphorism from a 16th Century French surgeon, Ambroise Paré, who said:

‘Cure sometimes, relieve often, comfort always’.

In other words, as a doctor, you should always be able to do something that makes the patient feel better, even if it’s just holding their hand.

So, I think what people who espouse ‘zero harm’ really mean is ‘zero preventable harm’.


There are well-described cultures and sub-cultures in healthcare organisations.  The ‘way we do things around here’, always trumps top-down instruction.  As Peter Drucker famously said, ‘culture eats strategy for breakfast’! 

Humans make mistakes.  There are two basic types; slips and lapses.  That is, things I didn’t mean to do, but did, and things I meant to do, but didn’t.  As the Anglican Confession makes clear, all human error is summed up by ‘sins of commission and omission’.

Happily, this is where electronic systems can have real impact, since they change the way people interact with one another day-to-day.  Dysfunctional cultures can be modified by the constraint and discipline that electronic systems impose.  A great example is the simple one of legibility of prescriptions.  Every year, thousands of patients are potentially harmed by adverse drug incidents, some of which are simply due to the fact that the nurse couldn’t read the doctor’s handwriting.  Electronic prescribing eliminates this particular risk from go-live.

Electronic systems that alert the user to potential error (‘do you really want to do that?’), such as drug-drug interactions, or prompt the user to take action (‘the oxygen level is unusually low!’) can really help overcome slips and lapses.


Zero harm is really a cultural change aspiration.  Information can drive the change.  If you want to reduce the amount of alcohol you’re drinking, start by keeping a diary of everything you drink.  By making the issue visible you begin to change.  Model the change you want to see in others.  If ‘zero harm’ is really important, then the senior Executives and medical leaders need to demonstrate it, for example:

  • Executive safety ward rounds, asking questions like, ‘What’s not safe around here?’
  • Staff focus groups, ‘when did a patient last come to harm here?’
  • Stop insisting on activities that we know add little value, such as clinical audit!


The more I think about it, the more I feel that ‘zero harm’ is about quality.  There are dozens of definitions, but, ‘Right first time, every time, all the time’, links the two ideas.  Quality is often cheaper, and quality is safer.  Some healthcare organisations are developing a ‘Preventable Harm Index’, which is simply the sum of all adverse events.  There is no denominator, just an absolute number; the aim is to get to zero.