Why consultants need more natural predators

Without natural predators, growth in consultant numbers is uncontrolled.  This is the conclusion you reach when you look at the training numbers of doctors through an "ecological" prism: where doctors are the fertile mothers, and registrars in training are the juveniles who will grow to become future doctors.

Replacement fertility measures "the total fertility rate at which newborn girls would have an average of exactly one daughter over their lifetimes" who would go onto have further children. In more familiar terms, women have just enough babies to replace themselves.  It is a bit sexist to define this in terms of women alone, but as 50% female, Militant Manager does not mind.

In a stable ecology, replacement fertility is determined by a number of factors.  First is annual survival rates - the chance that you may die each year (predators, lack of food, disease etc).  Second is the age at maturation (the age at which a female can have children).  The lower the rates of survival each year, and the greater the age at maturation, the greater the replacement fertility.  And this equilibrium is stable because if numbers increased, then survival rates would drop as the population became easier to hunt, or they exhausted their food supplies.  A picture of a cow with an element of its replacement fertility is included for completeness below.

  

On this basis the replacement fertility for hospital consultants is 1 - i.e. consultants only need to have one registrar in their career.  And given 30 years of consultancy (which may increase if retirement is pushed back), and 6 years of training, the stable ratio of consultants to juveniles is 5 (this is 30 years of fertility in the consultant, divided by 6 years of maturation in the registrar).  The child bearing years are so long, the maturation age is so early, and the survivorship is so good, that in a stable population there would be 5 consultants per registrar.

And what ratio do we have today?  We have 5 times what we need, as illustrated in this spreadsheet, and summarised in the table below. 

Of course, the model needs to be adjusted for the more complicated reality.  People retire early, or change career.  There are some who go part-time (often the case for women); and others who go "private" entirely or in part.  There are even some who go to the dark side and become managers.

But these complexities only change things at the margin.  The replacement fertility ratio in humans is higher than the theoretical 2 (the theoretical figure).  This replacement fertility ratio ranges from 2.1 to 3.4 depending on country.  And similarly - though Militant Manager has not seen such an analysis - the stable ratio of consultants to registrars may be around 3 to 5:1.

Yet, we have a ratio of 1:1.  My spreadsheet is based on numbers published by the Information Centre.  This shows how the numbers have deteriorated over the last few years.  One can also see that vacancies for consultants are at negligible levels - the levels at which changes in recruitment practices in Trust will affect the numbers.

The more astute amongst the readers will be pointing out that I have not considered the growth that would be required.  That is by design.  The reality is that in a stable advanced economy, one cannot increase the workforce engaged in a sector without also saying in the same breath that that sector will also account for an increased share of GDP.  The UK already spends 8-9% of GDP on healthcare, and I do not see a groundswell to increase this further.  In fact, national policy is to reduce the share of GDP healthcare absorbs by keeping public spending on it constant as GDP grows.  So there are no grounds to independently plan for rapid growth in doctor numbers.

So what does this all mean.  I have four main thoughts:

1.  NHS Workforce leads should be sacked.  Not only have they allowed this to arise, they are asking the wrong questions.  Militant Manager has searched for years for strategic analysis of training numbers - what numbers do we need; and what drives the replacement ratio.

2.  There is going to be a lot of pain for trainees.  There was - not so long ago - a role for "senior registrars."  They were effectively registrars who had all the requirements for consultancy, but had to do "their time" waiting for a job to come up.  It was not unusual to be in such a stage for 5 years.  Those days are coming back.  And the 5 years will be used to erode, demoralise and reduce the registrar base.  Many will leave the profession, and lots of others will seek other ways to burnish their CVs to distinguish themselves in an the increasingly competitive process of becoming a consultant.

3.  We need a better plan.  Juniors now do a lot of activity in hospitals; and many rotas require them.  So in some respects there is a requirement for this number of registrar level doctors.  But we do not need those numbers "training" and aspiring to consultancy - an aspiration we cannot meet.  That will require a reduction in training throughput, and a change in the stable workforce mix in hospitals - away from "training" posts.  This is a task that will have to be picked up by the new HR directors who replace the sacked ones.

4.  We need more natural predators for consultants. Ideas include taking consultants and leaving them in the serengeti; encouraging more to go camping in Siberia; and introducing diving in the shark infested waters of South Africa as a training requirement.  

Readers will have better ideas, and I would welcome those.

The wrong call for the Ambulance Service

The National Audit Office produced another report this month.  This time it was on the Ambulance Service.  And its headline finding was that the focus on response times had caused inefficiency in the system.  This is such a muddled finding, that Militant Manager does not even know where to start.

But let me try.  I think you can justify response times in three ways.  Firstly, it is a common sense target.  Secondly, its robust and meets all the criteria for targets.  Thirdly, the "inefficiencies" that the NAO finds are due to an incomplete analysis.

First, let's try the common sense approach.  Response times is what Joe Public expects from his ambulance service.

I can demonstrate this through a thought experiment.  We are going to ask somebody what they feel is an appropriate target for the ambulance service in this experiment.  Imagine we are in Sheffield city centre on a Saturday morning - shopping time - bound to find lots of people.  But wait - those idiotic 1980s town planners thought it would be a good idea to open a huge shopping centre near the M1 - Meadowhall.  So we cannot find anybody.

Luckily those town planners tried to cover up their idiocy by commissioning the Winter Gardens, and that is where we find Aron Ralston (not Joe Public unfortunately).  We ask Aron the simple question: "If you had to think of a target for an ambulance service - a target that they would then pull all stops to meet - what do you think it would be?"  Aron is a bit strange, saying "The key target should not be response time - I do not mind if it takes 127 hours; what I want as the target is the handover time and information sharing at the hospital?"

The difficulty of imaging proves my point that response times is the common sense target, and you need to go to the Winter Gardens in Sheffield to find anybody who does not think so.
Secondly, the target meets all the criteria that you would want a target to have.  Better people than me have worked this out as SMART targets.  Specific, Measurable, Attainable, Relevant, Timely.  Response times fits all those criteria to a "T."

The third issue is the key one.  The NAO analysis is incomplete.  It focuses purely on the unintended consequences of the policy - more than one ambulance scrambled for Category A calls, and then stood down; but not on the other aspects - the intended consequences; and what would have happened under an alternate policy environment.

There are many aspects to every policy and its effects.  Militant Manager has created a handy two-by-two matrix to illustrate all the aspects (MM should have been a management consultant).  You can find this matrix here.  Causes are split into "Policy" and "Other factors" and Effects are split into "Intended" and "Unintended."

All policies will have unintended consequences.  And the NAO has focused on the unintended consequences of the policy, quantified them and published them as avoidable inefficiencies.  It is a bit like looking at a football match, identifying all the shots that missed the goal, and then figuring out the "points lost" as a result of those missed shots.  Yes, that is interesting and difficult analysis, but in itself it tells you little: what you can control is the shots; not whether it misses or not.

The true answer lies in looking at both the unintended and intended consequences, quantifying both; and then comparing all of this to an alternate policy environment.

One would well argue that the dual scrambling of ambulances is caused by this response time target, but so is better response times (the intended consequence) - which would have resulted in greater public satisfaction benefits, as well as clinical benefits.  You need to consider them all in the round.

And then you need to consider them against at alternate policy.

The NAO's alternate policy is a bit weak.  Some amorphous set of indicators, which may not comply with public expectations, be SMART or result in pure good effects.

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My main quibble is what the NAO has decided to lead with in its public announcements: the response time target - which is robust, SMART, well accepted, and, on balance, desirable.  The actual report has some other very interesting findings which do point to the inefficiency of ambulance services: 5-8% sickness rates, increasing costs per trip, reducing labour productivity . . .  None of these are caused by or cause the dual scrambling.

Monitor's regime will create mini "Enrons"

There is something wrong with Monitor's regime.  For a Foundation Trust to maintain adequate financial performance (as measured by Monitor's Financial Risk Rating published in its Compliance Framework), it has to carry on investing in capital to unsustainable levels.

This is best illustrated by a worked example.  Let us take a Foundation Trust.  Let us call it Smug, Cocky and Overly-Aggressive NHS Foundation Trust, or  SOFT for short.  Some change the "Overly" in SOFT's name to "Ultra" and get a new acronym.  Being a family friendly blog, we do not use such language.

SOFT is pretty typical DGH: serving a population of 350,000 people; 600-700 beds (depending on whether you count ICU beds, cots, day wards etc); 60-70,000 inpatient and day-case spells; 3,000 staff.  In terms of finances, it has an income of £200m; and an asset base of £142m - £100m in terms of land and buildings which do not depreciate; and £42m in terms of assets that need renovation, which depreciate.  This latter category - let us call it Plant & Equipment for simplicity, depreciates over 12 years - and since £42m is the net book value not the gross book value, the depreciation charge each year is £7m.  SOFT is an acute trust; but that is academic- the principles apply to mental health trusts as well.  There are those who maintain SOFT is a bit mental.

It is also assiduous about maintaining its Financial Risk Rating (see figure 1).  It tries to achieve a safe "3" by targetting the mid-point between the 3 and the 4 on each financial criterion.  The first financial criterion is "Achievement of plan" as measured by proportion of planned EBITDA actually achieved.  For this criterion, an achievement of 70% would qualify for a 3 and an achievement of 85% would qualify for a 4.  So SOFT targets 77.5% (mid-way between the thresholds for 3 and 4).  The second financial criterion is "Underlying performance" as measured by EBIDTA margin.  For this criterion, an achievement of 5% would qualify for a 3 and an achievement of 9% would qualify for a 4.  So SOFT targets 7% (mid-way between the thresholds for 3 and 4).

Figure 1: Derivation of Monitor's Financial Risk Rating (from Pg 23 of Compliance Manual)

And so on.  For the two criteria measuring "Financial efficiency," SOFT targets 4% for Return on Capital Employed, and 1.5% for Income & Expenditure Surplus margin net of dividend.  For "Liquidity"  SOFT's Director of Finance - let's call him Mr Mohs - targets 20 days.

All of this calls for a spreadsheet.  The summary of the worked model of SOFT over 10 years is presented in figure 2, and the fuller model is available here.  Please note that some further assumptions had to be made to complete the analysis, e.g., SOFT's income growth rate; other balance sheet items.  They are not critical to the analysis, and SOFT has some generic numbers.

Figure 2: SOFT Financial History - 10 year summary

Mr Mohs does not like cash accumulating on his balance sheet and authorises all excess cash to be spent on plant & equipment (line 25 on the spreadsheet); maintaining cash balances (lines 29-30, in the fuller model).  In fact, spending this excess cash on excess capital is the only thing he can do, as if he spends excess cash on operational items - it messes up his criteria for the following year, making it hard to achieve the target.

One issue that needs to surfaced is that both EBITDA margin and I&E Surplus margin cannot be independently controlled by anyone - let alone Mr Mohs, who is often a passenger in a boat he is meant to be steering.  He is a bit passive-aggressive and is prone to sulking; but I suspect that you are not reading this for a character description, so we will continue.  Mr Mohs, therefore, tries his best to trade off between the two.  And as depreciation increases over time, he works hard to increase the EBITDA margin.  You will agree that Mr Mohs has done a good job walking this tight-rope.

So, now we come to the key problem.  Under this scenario, SOFT keeps accumulating capital.  Within 10 years, its plant & equipment capital base has almost doubled from £42m to c. £75m (line 34 in the fuller spreadsheet); and as a ratio to its income, plant & equipment has gone up from c. 23% to c. 32%.

And this is where the parallel to Enron comes.  Soon SOFT and Mr Mohs run out of solid capital projects to fund; and in any case operational issues are piling up.  Slowly, the line between capital and expense begins to get blurred, and things begin to get capitalised that would/ should not be capitalised.  i.e. like Enron, balance sheet games are driving P&L performance.  And like Enron, soon SOFT would not be able to withstand a forensic balance sheet review.

And that is how Monitor's financial regime may end up creating mini "Enrons."

The problem gets much worse if Mr Mohs and SOFT target a 4 on Monitor's financial criteria.  That is the problem Cancer and Arrogance NHS Foundation Trust (CANT) face.  Given their heavy capital investment e.g., in LinAcs, and their arrogance, they have a much higher EBITDA than others, and target a 4.  I hope to return to this micro-topic of why Monitor considers EBITDA a better indication of underlying performance than EBIT at a later date in the blog.  It may be because Monitor is a bit dominated by pseudo private -equity types.  See - I am getting into that already.  We will return to CANT's problems at a later date.

I would also like to address what the solution to this problem is at a later date.  But to do that - I need your comments.  Does this chime with the way your Foundation Trust works?  And have you eroded the capital/ expense thresholds?

Chair of the Royal College in practical demonstration of danger of the reforms

I originally posted this blog as a comment below the original article in Dr Grumble's blog.  It relates to Dr Clare Gerada being knocked off her bike, and suffering extensive injuries as a result.  That is clearly dreadful, and I hope she gets better, and gets back on her bike.  My sympathies are with her.


That said, now let's get down to the blog.
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I am very sorry for Clare.  I too am a cyclist, and can sympathise with her for the unfortunate events.

But I have a thought: maybe Clare was trying to show by method acting the dangers of competition.  Whereas her critique has generally been of those dangers in healthcare, maybe she was trying to illustrate the parallels in competition for road-space.  The vulnerable get squashed.

Maybe that also explains why Clare's own GP Practice/ Partnership (The Hurley Practice) have been so aggressively competing for contracts. This may be another selfless act by Clare and her partners to illustrate the dangers by personal sacrifice.  So when they are trying to partner with foreign companies or wearing down the shoe-leather by meeting with any hospital or PCT in London that will listen, with a view to opening urgent care/ walk-in centres, they are actually doing another altruistic act.  (You can see their map of world domination on their website). This time they are not only illustrating the dangers of competition, they are also illustrating the dangers of fragmentation of care.

I look forward to Clare and her partners' practical demonstrations of further dangers of the health reforms.  Perhaps, next time they may chose the potential dangers in practice boundaries being eroded.  This they could do by signing up patients from adjacent practice areas.

All this profesional critique aside, I hope Clare gets better; and gets back on her bike.  After all, the Royal College have a lot of criticisms of the white paper.

More Del boys will become GPs

The following story from Martin Beckford, The Telegraph's health correspondent, based on a survey of GPs by the BMA illustrates an important, and often overlooked, aspect of reforms.  Changes to incentives and processes not only change the way people behave (often the intended consequence) but also the type of person that opts for those positions (the unintended consequence).  So it will not only make GPs behave more like Del boys, more Del boys will become GPs.

The survey's headline finding is that 1 in 7/8 GPs responding to the Survey intend to retire in the next two years.  So the reforms are driving out a large number of GPs.

One question to jump out is whether that is really a startling statistic.  Assuming that every GP has a 36 year working life, and that GPs have an even distribution in terms of age, then one would expect 1 in 18 to retire in the next two years.  However both the term "next two years" and "intention to retire" are sufficiently vague for many with a general intention to wind down over the next few years to answer "yes."  In addition, self-selection may also be an issue: the survey findings are based on 10,000 responses from a population of nearly 50,000.  Lastly, one needs to consider whether individuals' responses were aligned to strengthen the political point they and the BMA may wish to make - and whether the responses were designed to sandbag in that way.

Ignoring those issues and taking this statistic at face value, this finding illustrates the secondary consequences of reforms - which are often overlooked.  A group of people will be driven away from primary care by this change, and a group of people will be attracted to it.  These two groups of people will be very different, and over the years the character of GPs as a whole will change from the former to the latter - more conversant with financial flows, more commercial, and - dare one say it - more at home in a competitive market.

The question this raises for the reforms is: who do you want running your GP practice in 20 years time?  Trotters Independent Trading Co. New York - Paris - [Insert name of your town]