Comment

A dose of entrepreneurialism is just the cure for the NHS

With the NHS required to make £20bn of savings, managers need to show some creative flair - but how much business risk will they allow, or are there other ways to save cash?

Tim Care

Entrepreneurial is not a word you would normally associate with NHS management culture. Traditionally risk adverse, management has allowed budgets to spiral to avoid cutting needless costs and introducing efficiency. Yet, should this all change so that an increasing number of trusts are, like the definition of an entrepreneur,: 'organising business ventures and assuming risk for it'?

After all, risking and losing tax payers' money is not something NHS trust board members would want to be held accountable for.

The stark reality is that the NHS will have to make savings of more than £20bn. Health secretary Andrew Lansley recently said that almost every hospital chief executive is saying that they are going to have to achieve something like 4% to 5% efficiency savings each year over the next few years".

Chief executives of NHS trusts are now faced with a £100bn question: Just how can you do more with the service for less?

Clearly nothing should be done which jeopardises patients' welfare, but business risk is another matter. Senior management within the trusts needs to have more of the mindset of entrepreneurs in the corporate world.

That said, we have already seen some evidence of this occurring in the NHS, and with foundation trusts we have the perfect vehicle. With the benefit of financial autonomy and wider powers, these trusts are often larger than the average corporate business. In the north-east of England an enterprising foundation trust has linked up with a US IT provider to develop training software to use in the trust and sell on to other users in the NHS.

In the north-west of England we have seen two foundation trusts join together to form a venture to provide decontamination services. This will slash their own costs and create a service to market to other trusts. Profits from these ventures can be ploughed back into frontline services.

A few years ago in the Midlands, the Heart of England NHS Foundation Trust took over the Good Hope Hospital. Now we are moving to a model of integration, whereby many foundation trusts plan to host the community services arms of their local primary care trusts. This will increase income and help to save trusts as much as 30% of administration costs.

Improve accountability

However, foundation trusts will increasingly need to improve accountability by improving their engagement with their local communities. Some members feel that they are currently not given sufficient opportunity to question the directors, and the process for election of governors does not necessarily result in a board of governors that reflects the diverse membership.

There is also a new breed of entrepreneurialism on the block – the social enterprise. Whether these are set up as co-operatives or mutuals, these will see NHS staff forming themselves as owner managed businesses to compete for and run PCT contracts. We have seen the first wave of these enterprises set up ranging from primary care services for the homeless, to mental health services, dental services and services for children and young people.

The government may say an age of austerity is upon us but an age of entrepreneurialism within the NHS could finally see a change from an ailing organisation to one in good financial health.

Tim Care is a partner in the public services practice at law firm Dickinson Dees

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