Better managed NHS trusts ‘have better medical results’

17 Feb 10
Hospitals with stronger management have better clinical results, according to a London School of Economics study
By Tash Shifrin

18 February 2010

Hospitals with stronger management have better clinical results, according to a London School of Economics study.

The LSE’s Centre for Economic Performance found that management was better where more senior staff had clinical backgrounds – and could communicate effectively with medical and nursing staff – and where there was greater competition from neighbouring NHS trusts.

The centre’s research, covering more than 60% of England’s acute hospitals, was published today.

It notes that: ‘All else equal, hospitals located in marginal [electoral] constituencies are much less likely to be closed than hospitals in safe seats.’ This created a ‘natural experiment’, allowing areas with more hospitals to be compared with ‘near-identical areas’ with fewer neighbouring hospitals.

Competition had ‘a large effect in improving managerial quality in hospitals’, the researchers found. This could be produced by a more competitive labour market for senior staff or through competition for patients in line with the government’s ‘quasi-market’ reforms.

‘Whatever the exact mechanism, having more local rivals does appear to have advantages for management and patient care,’ the study says.

The difference in patient outcomes was marked in hospitals with better management, the researchers say. ‘A one-standard deviation improvement in management is associated with a fall in the death rate from heart attacks from 17% to 16%.’ This would mean around 400 fewer heart attack deaths a year in the research sample.

NHS Confederation policy lead Joe Farrington-Douglas said the research highlighted the need to retain good management practice if the NHS was to ‘make it through the downturn’.

CEP director John Van Reenen told Public Finance: ‘Getting management right might cost a little bit in terms of getting your act together. But it’s not about having more managers. It’s what you do with your managerial time.’

He warned that human resources measures such as appraisal systems, aimed at retaining the best managers, might be squeezed by cost pressures, which ‘would be a bad thing’.

Van Reenen acknowledged that hospitals in rural and isolated areas would always have less local competition. ‘If you want to improve management there, you have to look at the other ways,’ he said.

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