Response from NHS Lothian – 18.10.10
“FUTURE APPROACH TO GOVERNANCE”: Response to Scottish Government Health Directorate Discussion
Introduction
NHS Boards already have responsibilities that are consistent with the Principles of Good Governance, and the refreshed approach to governance as set out in the discussion paper. The Board’s Chief Executive (Accountable Officer) has a duty to deliver Best Value, which has the concept of continuous improvement embedded within it. Furthermore the QIS Standard on Clinical Governance & Risk Management is also concerned with systems of continuous improvement in healthcare.
The approach as described in the discussion paper is therefore a logical expansion of a well established theme, with a stronger emphasis on improving the use of data.
The 4th Good Governance Principle highlights the need for an effective risk management system. Effective risk management is about managing risk at the right level of the organisation. Therefore it is important that the focus of assurance on the Quality Strategy is not just about what is reported upwards to Boards and Committees, but also having assurance that there are systems to ensure that staff in operational areas have the information and the capability to manage risks and respond to issues in their area in a timely manner.
The 4th Good Governance Principle also requires Boards to make good use of information, and consider health outcomes. This is consistent with the NHS Scotland Quality Strategy.
It is helpful that the Principles of Good Governance are expressed in generic terms. Corporate governance can be expressed in simple or complex terms, a simple one being:
“the system by which companies are directed and controlled” – Cadbury, 1992.
Corporate governance is a holistic concept, looking at the whole organisation.
Within the NHS separate strands of governance have been created: – “clinical”, “research”, “staff”, “financial”, “information” and “educational”. The discussion paper mentions another one – “care”.
Continued/
Introduction (continued)
With respect to “care” governance, Box A of the discussion paper, includes the following sentence:
“This is intended to ensure coherence in the understanding of governance in the delivery of frontline care and is not intended to be in any way separate from organisational governance arrangements.”
Whilst this statement is welcome, it is equally important that care governance is not viewed as something that exclusively applies to nurses, AHPs and others directly involved in front-line care. If a Board is required to observe governance principles, then the Board is responsible for ensuring that all of its employees are made aware of what is required, and have the information and resources to ensure the delivery of those principles.
e.g. “assuring and accrediting the standards and quality of services and individual practice.” This needs to be supported by clinical and non-clinical departments, to draw together the evidence base, research, conduct audits, provide information to employees, ensure that the organisation has the resources to achieve the necessary standards and quality.
The solutions to problems and improvements to quality, both depend on organisations working effectively, and differing functions and departments working together. By using a common set of Good Governance Principles, the simplicity and consistency of the language to be used by all, can only be helpful. In this light, it is worth considering whether it is necessary to add another category of governance (“care”) into NHS Scotland.
The Financial Reporting Council (FRC) has just published (June 2010) an updated “The UK Code of Corporate Governance”. The FRC has commissioned the Institute of Chartered Secretaries and Administrators to review the Higgs recommendations to develop revised guidance to support the implementation of some of the principles of the new Code. This is currently in consultation, and is called “Improving Board Effectiveness”.
The “Comply or Explain” approach associated with the UK Corporate Governance Code is equally applicable to the “Principles of Good Governance”. The Principles are not meant to be a rigid set of rules, and are drafted so that Boards use them to consider whether they have been followed in their area of responsibility. It is not a checklist approach. This allows for local flexibility in determining how to apply the Principles in practice.
This approach would support what is proposed in paragraph 3 of the discussion paper, i.e. a move away from the resource intensive assurance of prescribed standard processes. It would give scope for innovation, and thereby support the duty of Best Value.
Introduction (continued
Whilst compliance with this Code is a listing requirement for listed companies, it is applicable to all organisations. It would be sensible for any new guidance on corporate governance for NHS Scotland to be consistent with these publications.
The NHS Lothian Executive Management Team received an analysis of the Board’s current arrangements to implement the NHS Scotland Quality Strategy on 1 September 2010. This is attached for your information at Appendix 1. This does cover issues such as strategic and operational fit, and strategic and operational integration. Rather than repeat the content of that paper, this response shall focus on the questions raised by the discussion paper.
1. In order to strengthen assurance on the quality of care, does the Board need to revise its governance structure? (organogram to be provided)
2. In order to strengthen assurance on the quality of care, does the Board need to improve the information/ intelligence that it uses for governance purposes?
3. In addition to the response to the earlier questions, what further steps should the Board take to minimise the risk of serious incidents?
These questions are discussed in the following sections.
1. In order to strengthen assurance on the quality of care, does the Board need to revise its governance structure? (organogram to be provided)
The Board reviews its governance structure on a continuous basis. This is informed by experience of the existing structure, the needs of the service, and any legal, regulatory, or best practice recommendations that may present themselves.
In recent times the governance structure has been amended in the following ways:
· Revised Standing Orders, Standing Financial Instructions, Scheme of Delegation, and other governance documents were approved (March & May 2010). A chart summarising the Terms of Reference of the Board’s Committees is provided. (Appendix 2)
· The Spiritual Care Committee and the Equality & Diversity Steering Group have been replaced by a Mutuality & Equality Governance Committee. (March 2010) (see Appendix 3)
· The Healthcare Governance & Risk Management Committee had the phrase “Patient Focus & Public Involvement” within its remit. The Board agreed in March 2010 to delete this, to clarify that the Healthcare Governance & Risk Management Committee’s focus is the delivery of person centred care (which was already stated in the terms of reference). The public involvement element transferred to the new Mutuality & Equality Governance Committee.
· The Board and West Lothian Council approved a Framework of Governance for the West Lothian Community Health & Care Partnership (February 2010).
· The Board approved the establishment of an Organ Donation Committee in May 2009.
· The Board had previously approved a revised terms of reference for the Healthcare Governance & Risk Management Committee in January 2009. This review was primarily concerned with making the delegated authority and responsibility of the Committee more explicit.
All Board Committees are expected to review the adequacy of their terms of reference on an annual basis. The Board has a standard template for the annual reports of Committees (which inform the Statement on Internal Control), and this prompts the Committee Chairs to provide the details of any review of the terms of reference.
Continued/
1. In order to strengthen assurance on the quality of care, does the Board need to revise its governance structure? (continued)
The governance structure is not the only relevant factor to the assurance process on the quality of care within the Board. Assurance should not be limited at the Board/ Committee level, but should be sought at every level of the organisation.
Regardless of what the governance structure looks like, the Principles of Good Governance should be observed at every level of the organisation. This needs be supported with robust systems of internal control, which can lead to:
· Delegation of responsibility, so employees are empowered to make decisions and act immediately.
· Clear processes throughout the organisation, so employees know what to do. This should include when something needs to be escalated upwards, and who needs to be notified. Whilst it is preferable to manage issues at a delegated level, some matters can be of a national or organisational-wide interest.
· At all levels, performance information should be readily available to decision-makers, and tailored to meet their requirements.
As has been explained, Lothian NHS Board regularly reviews its governance structure, and has already factored in the Quality Strategy to its assurance systems.
The remit and membership of the Board Committee structure will be continuously reviewed.
The Board intends to use LEAN methodology over the next 6 months to review the processes in place to support its governance arrangements, particularly in relation to the information available to assist Board members to focus on strategy, performance, and constructive challenge.
The Chairman and Chief Executive are already considering the draft guidance from the Financial Reporting Council, Improving Board Effectiveness, which expands on the principles of Leadership and Effectiveness that are within the UK Code of Corporate Governance.
Further detail on the structures for healthcare governance is provided within the NHS Lothian Quality Improvement Strategy 2008-11 (Appendix 7).
Continued/
2. In order to strengthen assurance on the quality of care, does the Board need to improve the information/ intelligence that it uses for governance purposes? (continued)
The Board is improving the information it uses for governance purposes.
NHS Quality Improvement Scotland assessed the Board against the Clinical Governance & Risk Management Standard in January 2010. Whilst the Board was assessed at Level 3 on the standard (“Monitoring”), the following was recommended:
“develop a systematic approach to documenting the evaluation activity taking place across a range of areas.”
The ability to systematically evaluate the effectiveness of systems, and thereby lead to improvements in quality, does depend on the availability of outcomes data.
Lothian NHS Board considered this issue on 24 March 2010 (see Appendix 4). The subject was considered in light of the imminent publication of the NHS Scotland Quality Strategy. The Board supported the introduction of a system wide quality of care indicators and reporting structure, and has started to receive reports on quality. The latest report received by the Board (22 September 2010) is attached for your information (Appendix 5). It is recognised that this system of reporting is still in its infancy, and the Board shall continue to review the reporting and the quality of the data therein.
The Board has adopted the approach outlined in Paragraph 3 of the discussion paper, namely:
“Arguably, there is a need to move to a governance approach that focuses to a greater extent on outcomes, which is more risk-based and proportionate.”
The scrutiny of quality data is not limited to governance committees. The Board has also improved the outcomes data that is routinely provided to operational management. The data is drawn from both clinical areas (bottom-up) and corporate information systems (top-down).
The Executive Management Team receives a comprehensive performance report, which considers data from a range of different sources. This includes a position statement against all of the NHS Scotland Quality Improvement Standards. There is therefore a combination of monitoring outcomes, and the quality of processes. An extract from the August 2010 report is at Appendix 6. The same report is also presented to the Board’s Finance & Performance Review Committee.
Continued/
2. In order to strengthen assurance on the quality of care, does the Board need to improve the information/ intelligence that it uses for governance purposes? (continued)
Quality scorecards are in development at strategic level. At operational level, Senior Charge Nurse scorecards are being developed, which will cover performance against local and national HEAT targets.
Data on complaints is routinely received at CHP/ Clinical Management Team/ Senior Management Team level. The clinical areas also generate data on patient experience, and this also feeds into the overall system of quality monitoring. The Board is currently examining how to make the reporting of patient experience more systematic.
With respect to safety, the performance on Hospital Standardised Mortality Rates is discussed at operational risk management groups, and local Senior Management Teams. The Board has requested data on Standardised Mortality Rates by specialty to be provided by ISD, so as to develop this process further.
Reports on Hospital Acquired Infection and incidents are made available from ward to Board.
In the area of clinical effectiveness, disease-specific outcomes are discussed at directorate level, and within Managed Clinical Networks. The Board has recognised that this is an area where the reporting requires further development.
As this new system of monitoring develops and matures, there is the opportunity to review what Committee receives the information, and what information is presented to the full Board. Issues that could be considered include:
· The Board routinely receives reports on delayed discharges, waiting times, and healthcare acquired infection. Should the detailed scrutiny of these items only be done at Committee level, along with other outcomes? What should the Board be looking at if the same outcomes data is scrutinised at Committee level, and every level of management?
The Board could monitor whether the whole system is working, e.g. the speed and quality of response to adverse incidents, considering whether the change to the system of monitoring is leading to improvements in quality, providing oversight to the performance of the Committees themselves.
· As the quality outcomes are also being considered by the Finance & Performance Review Committee, how does this impact on determining whether Best Value is being delivered?
Continued/
2. In order to strengthen assurance on the quality of care, does the Board need to improve the information/ intelligence that it uses for governance purposes? (continued)
Improvements may not necessarily come from changing the structure, but rather changing the way that Board business is conducted.