Managing healthcare risk: Out with AS/NZS 4360 – In with ISO 31000

Few people concerned with managing ANY kind of risk in the NHS will not have heard of AS/NZS 4360 – the Australian/New Zealand risk management Standard. The Standard was licensed for the NHS in England in 1999 as part of the Department of Health’s NHS Controls Assurance Project. It introduced to the NHS the concept and practice of risk registers and risk matrices. AS/NZS was subsequently licensed by the rest of the UK NHS and also by the public healthcare system in Ireland.

AS/NZS 4360 is about to be consigned to risk management history. In December 2009 it will be replaced by ISO 31000 – a truly international risk management standard that, essentially, is the next revision of AS/NZS 4360.

Watch a presentation given by Kevin Knight, chair of the ISO working group on the ISO risk management standard, and the driving force behind AS/NZS 4360, on the new Standard and its links with AS/NZS 4360. 

Watch Kevin’s presentation here.

Charity Commission disputes Department of Health ruling on NHS charities’ accounts

According to an article in ThirdSector (27 October 2009), The Charity Commission appears to be heading for a showdown with the Department of Health (DH) over accounting procedures for NHS charities in England and Wales.

Senior Department of Health official Janet Perry has told health authorities that any NHS body that is the sole trustee of a charity must move that charity’s assets onto its own balance sheet.

Her position relies on a recently introduced international public accounting standard that says public sector bodies must consolidate the accounts of any organisations they control that have an income above a certain level. The DH estimates this to be about 30 of the 282 NHS charities that have NHS bodies as sole corporate trustees.

But the Commission is planning to write to the health authorities telling them they must not consolidate NHS charities’ accounts. Its official guidance says it is “wholly inappropriate” that charitable funds should ever appear on the balance sheets of public sector organisations, because it gives the impression that charitable assets are controlled by government.

Nick Brooks, head of not-for-profit at accountancy firm Kingston Smith, called the DH position “accounting dogma gone barking mad”. He said: “Consolidation should occur only if there is ownership. If you would not own the funds if the other organisation was wound up, you should not consolidate those funds into your own accounts.”

Jonathan Brinsden, a partner at specialist charity law company Bircham Dyson Bell, said he believed the commission was right to take a stand against the DH, but that corporate trustees would now be left in an invidious position.

“If I was in this situation, it would be impossible to know which authority to listen to,” he said. “Nor do I know how this conflict can be managed.”

A spokeswoman for the Commission said: “We don’t agree with the interpretation in the Department of Health’s letter. We will be following up with the Department of Health on this issue accordingly, and will also be writing to strategic health authority directors of finance to make our position clear.”

Source: ThirdSector – click here.

NHS governance related courses from ICSA

The Institute of Chartered Secretaries and Administrators (ICSA) is running three governance related one day courses for NHS participants during November 2009. Detailed are as follows. ICSA says if all three courses are booked you save 20% on total price – a saving of £237.

The NHS Trust Secretary

Price: £395 Date and location: 10 November, London CPD: 6 hours

Click here to view a detailed programme

Understanding Finance in an NHS Trust

Price: £395 Date and location: 17 November, London CPD: 6 hours

Click here to view a detailed programme

Effective Governance in an NHS Trust

Price: £395 Date and location: 24 November, London CPD: 6 hours

Click here to view a detailed programme

Note: This post is provided for information only. Unless specifically indicated to the contrary, Healthcare Governance Review does not endorse advertised training events.

One in 50 episodes of NHS care result from ‘complications’

According to provisional figures released by the NHS Information Centre this month, one in 50 episodes of care commissioned by the NHS, in NHS hospitals or the independent sector, in England resulted from a complication between July 2008 and June 2009.

This equates to 326,000 (two percent) of the 16.3 million episodes during this period, a slight rise compared to the previous 12 month period when 295,000 (1.9 percent; or one in 53) of the 15.6 million episodes resulted from a complication.

A hospital episode relates to a patient’s period of care under one consultant during their hospital stay.

Complications relate to four areas of medical and surgical care in hospital. Between July 2008 and June 2009:

• 95,930 complications (29 per cent of all complications) involved an adverse affect on a patient from drugs used in their treatment.
• 5,050 complications (two per cent of all complications) involved misadventures to the patient during surgical and medical care.
• 3,690 complications (one per cent of all complications) involved an adverse incident relating to medical devices used for diagnosis or therapy.
• 221,150 complications (68 per cent of all complications) involved an abnormal reaction by a patient some time after a surgical or medical procedure, where misadventure was not mentioned at the time of the procedure.

NHS Information Centre chief executive Tim Straughan said: “This is the first time The NHS Information Centre has published a special topic about complications during a patient’s hospital stay. Provisionally it appears one in 50 hospital episodes involve a complication and two thirds of those arise at some point following a surgical or medical procedure.

“It is important to note that complications can occur as a result of patient’s physical reaction to treatment that was not able to be predicted, rather than arising due to any fault of the medical professionals involved. Trends may also include effects of any changes in data recording and clinical coding practices. This information will be useful however to help the NHS examine possible reasons for complications and improve the quality of patient care.”

For further information, click here.

Notable quote: Governance in healthcare

“Governance lives at board level, but its effects should be felt from board to ward.”

Linda Abolins, Lesley Adcock, Juliet Hardcastle, Andrew Jackson, Keith Peskett. Postgraduate programme in healthcare governance, Loughborough University, October 2009.

Getting (more) women on boards

Harriet Harman, minister for Women and Equality, has told the Treasury Select Committee that the Britain’s boardrooms must have more women on them.

Speaking on Tuesday 20 October in relation to how boards of City firms could improve Britain’s economic performance through boardroom diversity, she told the Committee “If you want to make sure you don’t have the nightmare of men-only boards, you actually have to change the terms on which men and women participate, you have to change the culture and working practices because the greater good you are aiming for is to make sure you have diverse boards and a proper meritocratic approach.”

Interestingly, the Department of Health published, on 13 October, the report of the Chair of the National Working Group on Women in Medicine. Titled Women doctors: making a difference, the report aims, amongst other things, to encourage women in leadership.

In particular, the report recommends that “There should be increased access for women to the committees and boards of major medical institutions, including the medical schools, postgraduate deaneries, medical Royal Colleges, NHS trusts and other NHS bodies. The Equality and Human Rights Commission should consider auditing the appointments process for all such posts at these institutions, as they consider appropriate, to assess whether sufficient opportunity has been created to increase access for women to these respective organisations’ committees and boards.”

Download Women doctors: making a difference here.

Readers with an interest in women on NHS boards might be interested in the following Health Service Journal (HSJ) articles:

Anne Watts on women in the non-executive workplace (16 May 2008)
Few women doctors have board-level responsibilities, says RCP (4 June 2009)

Governing the NHS 2010 and beyond – consultants appointed to write the new guidance

Readers may recall that the 2003 Department of Health guidance Governing the NHS: Guidance for boards is being ‘refreshed’ (see the following post).

According to Elisabeth Buggins, Chair of NHS West Midlands and the Board Development lead for the National Leadership Council “The National Leadership Council has recognised the critical role boards play in addressing the challenges of the modern NHS and I want to make sure that the whole board will benefit from up to-date guidance on governance issues.”

Working with the Appointments Commission and other partners including Monitor, the NHS Confederation and the NHS Institute, Elisabeth has established a vision that the new guidance will be ‘compelling not compulsory’.

Foresight Partnership in association with the King’s Patient Safety and Service Quality Research Centre have been appointed to develop the new guidance. According to Adrienne Fresko of Foresight Partnership “We will be looking at the extensive literature on governance to underpin the guidance but we are also keen to make sure that we are responding to the issues that Boards sometimes find difficult.”

Adrienne and her colleagues are working to a tight deadline as the new guidance will be launched at the Chairs Conference organised by the Appointments Commission on 23 February in Central London.

According to Elizabeth Buggins “We hope that the final document will assist boards in reaching the highest standards of governance, which we know is so important in achieving world class commissioning and excellent service delivery.”

Healthcare Governance Review endorses Elizabeth’s hopes and looks forward to reviewing the new guidance when it is published early in 2010.

Further information can be found in the autumn 2009 edition of Bulletin – News from the Appointments Commission, downloadable here.

Governance of health and safety – the need to ensure safe systems of operation and to carry out risk assessments

David Halcki MBE (David.Halicki@btinternet.com), independent health and safety consultant and former NHS safety professional, believes that NHS boards and managers should learn lessons from the following industrial laundry incident. In particular, he is urging boards to ensure that NHS organisations have safe systems of operation in place and carry out risk assessments both in relation to any laundry services they might have, and in relation to wider organisational health and safety matters.

The Health and Safety Executive (HSE) is urging laundry companies to ensure that they have safe systems of operation in place and carry out risk assessments after a worker was left in a coma, following an incident at a factory in Balham, Wandsworth. This follows the successful prosecution (Thursday 24 September) of a major UK laundry company at Southwark Crown Court, following an incident in October 2007. OCS Group UK Limited of Limpsfield Road, Sanderstead in Surrey was fined £80,000 and ordered to pay costs of £33,059, after pleading guilty to breaching section 2(1) of the Health and Safety at Work etc Act 1974, after Joseph Pathmananthan, a worker at the site, was injured in a serious incident.

OCS Group UK Limited provides commercial laundry services at industrial processing plants across the UK, including Balham. This plant had approximately 150 workers. 

On 2 October 2007, Mr Pathmananthan, a 61 year-old employee from Sutton in London, was working at the company’s Boundaries Road site in Balham. He was repairing the hopper unit which loads roller towels into the top of a continuous batch washer, which is an industrial washing machine costing more than one million pounds. The hopper unit needed repairing after a towel had become entangled in a lifting belt. After several different methods had been used by Mr Pathmananthan and four other colleagues to dislodge the towel, he entered the hoist’s protective cage to continue to try to remove the towel. Mr Pathmananthan was standing underneath the suspended large steel hopper. As the towel became free the hopper fell two meters onto the victim, crushing him. He suffered from multiple broken bones and internal injures and was in a coma for 19 days.  He stayed in hospital for three months and has not been able to return to work for two years since the incident.

OCS Group UK Ltd carried out an internal investigation into the incident and almost all the blame fell on a number of employees on the Balham site, including the victim who was disciplined. Despite the HSE subsequently prosecuting OCS, the company’s own internal investigation made little criticism of the company’s policies or of senior management. The HSE investigation showed that OCS Group UK Ltd did not have a sufficiently effective system for ensuring the machinery was safe to be operated and maintained, and that there were no checks on the machinery after its repair.  Also, the Balham site engineering team had not been provided with a manual which would have clearly shown how to raise the hopper safely for someone to work beneath it.  The court heard that two years prior to the incident, an HSE Inspector had attended the site and had identified that Mr Pathmananthan needed more support.

The HSE gave direction on necessary improvements including the need to risk assess the continuous batch washer, but there was no evidence this had been followed by OCS Group UK.  The HSE also found the site had inadequate controls in place to stop people slipping and tripping and that the movement of vehicles at the busy site was disorganised and dangerous.

While sentencing the company, Judge Taylor criticised OCS Group UK Ltd for what she said was a systemic failure and its complacency during monitoring. If the company had not pleaded guilty at the earliest opportunity Judge Taylor, said the fine would have been £40,000 more. Andrew Verrall-Withers, Health and Safety Inspector, said: “I was pleased the company co-operated with the investigation and made good efforts to improve after the incident, but I was surprised and disappointed that their own internal investigation failed to identify so much of what the company had got wrong.  “I hope this case sends out a message to other companies, including large ones, that it is vital they make sure that they are protecting their employees effectively. It is no good to anyone if problems are only found after it is too late.”

Healthcare Inspectorate Wales publishes 2008-09 Healthcare Standards Reports

In May 2005 the Welsh Assembly Government published Healthcare Standards for Wales, setting out a common framework to support the NHS and partner organisations in providing effective, timely and quality services across all healthcare settings. The standards are focused on improving the experience of patients and service users and placing them at the centre of the way in which services are planned and delivered, thus providing a basis for continuous improvement. The 32 standards include 15 concerned with ‘healthcare governance.’

This is the third year in which each of the Welsh Local Health Boards and NHS trusts, together with Health Commission Wales has been required to self assess its progress in delivering the highest level of performance against each of the 32 standards and to submit its assessments to Healthcare Inspectorate Wales (HIW) for testing and validation.

All of the Healthcare Standards reports for 2008/09, together with archived reports for the past two years, can be downloaded here.

South Tees FT needs Deputy Director of Healthcare Governance and Quality: Closing date 23 Oct 2009

Following a major Trust-wide review of their Governance structures, South Tees are looking for someone to provide the strategic leadership and corporate management of Clinical Governance within the Healthcare Governance Directorate. This will involve working closely with the Medical Director and Director of Nursing and Patient Safety. It will also involve working with the Head of Corporate Affairs and the Head of Financial Governance and Control to ensure that the Trust achieves integrated governance. The successful candidate will deputise for the Executive Directors on Governance issues and be part of the Trust’s senior management team. He/she will lead a team covering a comprehensive range of associated functions: NICE and NPSA guidance, Clinical Audit, NHSLA and CQC compliance.

Educated to Masters Degree level the successful candidate will need to have significant experience of working in a senior management position in a complex organisation. He/she will possess a comprehensive understanding of clinical governance and the requirements of the External Regulators and will need to be a dynamic and transformational leader with experience of developing corporate policy, strategy and preparing and presenting Board papers.

Successful candidates will be required to attend the selection process on Monday 16 November 2009.

The post is advertised as 37.5 Hours Per Week and Agenda for Change terms and conditions Band 8D with Salary Range: £63,833 – £79,031 pa plus Pension and Staff Benefits

For informal enquiries, or to arrange a visit, please contact Sue Wooding on (01642) 854697 or email Sue.wooding@stees.nhs.uk

Closing Date: 23 October 2009

Developing an effective, forward-looking NHS board to drive the organisation to success

One of the presentations at the Health Service Journal’s (HSJ) Leadership Forum 2009 (30 November in Central London) is titled Board level leadership: Developing an effective, forward-looking board to drive the organisation to success

Led by Elisabeth Buggins, Chair NHS West Midlands, and Mike Cooke, Chief Executive, Nottinghamshire Healthcare NHS Trust, the presentation will aim to:

1. level leaders to look out at the commercial landscape, and not up;

2. examine the role of executive coaching, and understand where it adds value; and

3. Empowering board members to understand what information they require to respond to the needs of their trust and the community

For further information on the HSJ Leadership Forum 2009, click here.

 

Mid Staffs – “It is the job of boards and board members to make choices and balance priorities”

The Health Service Journal (HSJ – 8 October 2009) has reported on the publication by Mid Staffordshire Foundation Trust of a report into the conduct and performance of its previous chief executive Martin Yeates. Mr Yates resigned in May this year after the Mid Staffs board received the report.

According to the HSJ, the report says leadership and management of the trust had improved after Mr Yeates arrived, but confirms the massive failures reported by the Healthcare Commission.

It says: “….we have not seen or heard evidence to subvert the [Healthcare Commission’s] findings that there were significant failures in the leadership and management of the trust over the period of care, and these contributed to poor clinical care.”

The report further states that “Safety and quality of care are clearly of paramount importance in any NHS trust and would therefore need to be given priority in any consideration of the conduct and performance of a chief executive. They are not, however, the only measure of performance and the trust appears to have performed well against some other targets and priorities in recent years and we make reference to some of these later in the report. But performance in one area cannot be at the expense of performance in another, especially where patient care is concerned. It is the job of boards and board members to make choices and balance priorities.”

Readers can download the report on the HSJ’s website here.

Audit Commission ‘High Performing Board’ events for existing and aspirant foundation trusts

Following the success of their high performing board seminars in 2007 and 2008, the Audit Commission is holding a series of seminars between 22 October and 26 November dedicated to foundation trusts and aspiring foundation trusts across England.

Continuing the theme of the high performing board while focusing upon quality, the seminar will support executive and non-executive directors to enhance their understanding of the right level of information required to discharge their duties.

The seminar will focus on three themes:

Quality Improvement

This presentation will enable you to learn from others by sharing the experience of delivering quality improvements in patient care and re-shaping local health services to respond to the needs of the local community.

Quality and Costs

This presentation will explore how boards ensure that they can safely reduce costs and advance quality at the same time. It will also explore successful NHS productivity and efficiency schemes.

Quality NHS leadership

This presentation will discuss and explore the benefits of creating and embedding a quality leadership culture. The seminar will allow for presentations, time for discussion and reflection. It will enable you to meet and network with colleagues working in diverse roles across the health economy.

For further information, including dates, venues, speakers and booking form, click here.

Auditors’ Local Evaluation and Use of Resources 2008/09

Each year, the Audit Commission assesses how well NHS trusts and primary care trusts manage their resources and deliver value for money. For 2008/09, these assessments have been based on the Auditors’ Local Evaluation (ALE) for NHS trusts and Use of Resources (UoR) for primary care trusts. The Commission has published a national report outlining the scores and how they should be viewed in the context of the overall financial performance of the NHS in 2008/09, which is one of a continued improvement in financial stability. NHS foundation trusts are assessed by Monitor.

Auditors make assessments in a number of themes using key lines of enquiry. There are five themes for ALE and three themes for UoR:

ALE

• financial reporting
• financial management
• financial standing
• internal control
• value for money

UoR

• managing finances
• governing the business
• managing resources

2008/09 was the first year that PCTs were assessed using the new UoR methodology. UoR differs significantly from ALE, although the process and scoring system are similar. The UoR assessment is more demanding than the ALE assessment. It is broader, with a greater focus on outcomes.

The UoR results are a building block in the new Comprehensive Area Assessment to be published in December 2009. The Care Quality Commission, Ofsted, the Audit Commission and the police, probation and prisons inspectorates are preparing a joint judgement on the quality of public services in England’s 152 local areas, geared to public opinion surveys and the needs and priorities of different places.

Key areas for improvement highlighted by the Audit Commission include:

Risk management and assurance

Although arrangements are generally adequate in this area, the ALE assessment for 2009/10 will cover what NHS trusts have done in response to the Audit Commission’s report on how boards of NHS trusts get their assurance, Taking it on Trust. The report found that although most NHS trusts have the right processes in place, the rigour with which these are applied varies considerably. In light of this, NHS trusts should review their risk management and assurance arrangements to ensure that they are robust and working effectively and that the recommendations contained in the Audit Commission report have been considered.

Demonstrating outcomes

Difficulty in demonstrating outcomes, and uncertainty over what constitutes an outcome, appears to have prevented some PCTs from scoring higher in relation to the ‘governing the business’ and ‘managing resources’ themes. Outputs demonstrate the effectiveness or impact of processes and arrangements – for example, improved sickness absence levels might be an outcome of implementing staff well-being initiatives. PCTs need to consider carefully how they can evidence outcomes and link outcomes to processes and arrangements.

The Commission also warns NHS organisations that “If high-quality services are to continue to be maintained and developed as funding growth slows down, the challenge will be to ensure that NHS trusts and PCTs plan and successfully implement efficiencies and service modernisation in advance of expected financial pressures.”

Both summary and full versions of the Audit Commission report Auditors’ Local Evaluation and Use of Resources 2008/09 can be downloaded here.

The Banking crisis: what lessons for NHS governance?

In the October 2009 issue of Healthcare Finance from the Healthcare Financial Management Association (hfma), there’s a short article by Peter Reeves, NHS non-executive director and former finance director, setting out his views on what lessons NHS governance can learn from the banking crisis.

The hfma article is based on a longer article submitted by Peter. Healthcare Governance Review is grateful to Peter for allowing us to share his longer piece with readers.

In his article, Peter succinctly compares and contrasts the differences, and similarities between governance in the banking sector with that of the NHS. He concludes that “the banking failures do indeed provide clear governance lessons for the NHS centred on the understanding of risk, the imperatives of sound information, individual board members’ responsibilities and the need for an ethos of rigour and continuous challenge, especially in areas lacking historic corporate expertise or demonstrable management capacity.  Not new lessons, perhaps, but a reinforcement of where priorities always need to lie – but too often don’t.  NHS boards, and Finance Directors individually, should not miss the opportunity to reassess their own situations accordingly and in light of increasing funding pressures.”

Read Peter’s full article here – Article_for_Healthcare_Finance

U.S. health board rubber-stamps CEO ‘corruption’

Board members at MetroHealth Medical Center in Cleveland, Ohio, USA, are wondering how they missed several warning signs that something was wrong with the conduct of former executive John Carroll.

Carroll pleaded guilty earlier this month to taking more than $600,000 in bribes over nearly 10 years in exchange for inflated construction contracts that the board approved.

According to Rick Wade, a spokesman for the American Hospital Association’s Center for Healthcare Governance, communities in the USA have raised their expectations of hospital boards and expect them to demand the necessary information from management so the trustees can properly oversee operations. “Overseeing and managing a hospital has become ever more complex,” Wade said. “You are in command of a huge amount of community resources that have to be spent wisely.”

As reported on www.cleveland.com a few of the trustees of the board of MetroHealth Medical Center are grappling with how they missed the signs. “You depend on one another. What you don’t know, you hope that somebody else can figure out,” said Polly Clemo, who has been on the board since 1995. “I don’t know that we knew what to ask,” she added.

For further information on this story, click here.

Mutual governance in action at South Staffordshire NHS foundation trust

Readers may be interested in the South Staffordshire Healthcare NHS foundation trust’s ‘mutual governance’ approach to governance.

The trust has been implementing mutual governance since 2005 and has produced a handbook on mutual governance, which can be downloaded here.

KPMG view on the board’s oversight of risk

An interesting article by Henry Keizer, Global Heald of Audit, KPMG International, considers the board’s role in the oversight of an organisation’s risks.

According to Keizer, “…we’ve reached an inflection point for corporate governance, and that effective oversight requires the exercise of healthy skepticism…..[and]….the ability—and willingness—of directors to ask that second and third follow-up question about a risk, or about the risk-management process, is a vital sign of how healthy the board’s risk conversations are—and how firm a handle it has on risk oversight.”

He believes that a key question for every board is “whether any single committee— such as the audit committee, or even the full board—has the time, resources, and expertise to effectively oversee the full range of risks that the [organisation] faces.”

Keizer suggests that strengthening board oversightof risk should include:

- being clear about the board’s oversight objectives

- working with management to agree on the types of risk information a board requires

- ensuring that the culture encourages directors to question, challenge and test management

- invite the right people to the board’s conversations about risk

- ensure that risk oversight responsibilities of teh full board and its committees are clear.

Read the full article here.

World Class Commissioning Assurance Handbook – Year 2

The Department of Health has published its assurance handbook for year 2 of World Class Commissioning.

It is disappointing to note from the handbook contents that the Department of Health continues to fail to understand governance and the role and function of boards as governing bodies.

The handbook states that “The principle [sic]  functions of the PCT board are to set the strategic direction for the PCT and to exercise effective oversight and management. At all times the board members are accountable to the NHS and their local population for how they oversee investment and prioritisation and manage clinical, operational and service performance to drive better health outcomes, improve quality and reduce inequalities. The overriding objective of the board assessment is to understand the board and its sub-committees’ grip on the organisation, and their ownership and control of the commissioning agenda.”

In summary, the Department sees PCT boards as management boards – not governing boards, although they do talk of boards ‘oversight’ role.

Download the Year 2 World Class Commissioning handbook here.

Policy Governance in the NHS

The Association of Certified Chartered Accountants (ACCA) has published an article on Policy Governance in the NHS.

Policy Governance is a highly organised approach to board efficiency. Policy Governance starts from directors’ agreement about their board’s purpose and culminates in a set of standing controls that the board constantly uses and improves upon to get its job done. 

Using Policy Governance equips boards to:

- display leadership – from their own agenda, not the executive’s
- think as many; act as one
- secure their organisations within rigorously monitored bounds of safety and ethics
- make purpose number one
- find time and space to focus on the future
- have one concise living document that integrates all they need to say
- empower their executives to be their best
- have brief clear regular information about all they need to control.

Policy Governance is described by Sir Adian Cadbury as the most conceptually coherent model of board governance that currently exists. BPs board governance principles (see www.bp.com) are based on Policy Governance. Several NHS organisations are currently implementing the Policy Governance approach to board governance, including Southend University Hospital NHS foundation trust, Hereford Hospitals NHS trust and Leicestershire Country and Rutland Community Health Services.

Read the article Policy Governance in the NHS click here.

For further information on Policy Governance click here.