Lejos de la parroquia

This chapter has presented the first of the empirical results and has examined the extent to which a range of covariates impact on risk management levels in acute NHS trusts. An ordered probit estimator was used to model this relationship and the effect of applying this estimator to pooled and panel data was presented in Table 7.4. The main conclusions to emerge from this output were as follows:

(a) Achieving foundation trust status is significantly linked with higher risk management levels

Both the pooled and panel data columns reveal significant positive coefficients for foundation trust status, which implies that trusts that become foundation trusts are significantly more likely to achieve higher risk management levels. This suggests that the governance structures which are put in place as part of acquiring FT status (public interest governors, staff governors, and the trust board) do facilitate improved risk management practices within trusts. The findings of the exploratory interviews also support such a relationship – Joanne Sims of the Royal Bournemouth and Christchurch trust outlined how the achievement of FT status gave the trust an impetus to apply for a risk management level increase, Alison Martin of the Camden and Islington trust felt that achieving FT status led the board to think it ‘should be taking risk assessments seriously and seek to move to level two’, while Neil Gibson of the Northumbria trust felt that obtaining FT status gave the trust ‘a good governance structure which

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helped when applying for risk management level increases’. Given that the acquisition of FT status and

higher risk management levels are both demanding processes which require extensive organisation-wide efforts, it can be summarised that having achieved a positive outcome to the FT application, trusts are incentivised to go further and seek a risk management level increase to capitalise on the positive energy created within the trust. The positive linkage between FT status and risk management levels is also consistent with literature - the National Audit Office (2008) found that foundation trusts also rated more highly than NHS trusts on quality ratings.

(b) There have been significant improvements in trusts’ risk management levels during the period

2002-2009

The positive and significant year dummy variables in Table 7.4 (and the higher coefficient for each successive year) confirm that risk management levels are significantly impacted by time ceteris parabis i.e. each year is significantly associated with higher risk management levels than for the reference year (2002). This is consistent with greater proportions of trusts moving to higher risk management levels over this period (as shown in Table 6.7 in Chapter Six) and implies that having become more familiar with the NHSLA risk assessment process, trusts are better placed to make risk management level improvements at successive NHSLA risk assessments (which take place typically every two years). Such improvements in risk management levels over time also imply that the NHSLA policy of offering generous discounts on CNST contributions in return for the attainment of higher risk management levels is yielding results – the evidence of the exploratory interviews suggested that such discounts acted as a big incentive for trusts to seek higher risk management levels.

(c) Trusts with higher proportions of high-risk activities are more likely to obtain risk management level increases

The significant positive coefficients for the proportion of ‘gynaecology and obstetrics’ on both pooled and panel data reflects that trusts with high proportions of this specialty are significantly more likely to achieve higher risk management levels (relative to the reference category - proportion of general medicine) ceteris parabis. Such a finding is consistent with the increased emphasis on risk management

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in maternity care (Winn, 2007), and also implies that trusts are concentrating proportionately more of their risk management efforts in this high risk area – this is consistent with the higher proportions of level two and three for the maternity standards in Table 2.6 of Chapter Two relative to the general standards for other trust activities.

(d) Teaching trusts are significantly associated with higher risk management levels

When individual trust effects are controlled for via panel data, a significant positive coefficient is obtained for teaching trust status – this indicates that such trusts are more likely to achieve risk management level increases ceteris parabis. This finding is consistent with a view that staff in such trusts are more likely to embrace quality initiatives (such as a risk management level application) as they will more readily appreciate the reputational benefits of achieving higher risk management levels.

(e) Acute trusts in the London region are less likely to obtain risk management level increases

The significant negative coefficient for the London region using panel data in Table 7.4 indicates that trusts in this region are associated with lower risk management levels, ceteris parabis. This does not imply that more trusts are at level one in the London region (a further examination revealed that 46% of London trusts have achieved level two or more compared to just 41% for the entire population of trusts), but it does indicate that trusts in this area are less likely to seek risk management increases – this could be due to the fact that the proportionately higher costs of seeking an increase in the London area relative to the rest of the UK may it less attractive for trusts in this region to seek such increases.

(f) ‘Involvement in Merger Activity’, ‘Prior Levels of Clinical Negligence Claims’, and ‘Lagged Values of Financial Health Ratios’ are insignificantly related with risk management levels

While plausible hypotheses were forwarded as to why merger activity, prior levels of clinical negligence claims, and lagged financial health ratios may exert an influence on risk management levels, such factors were not found to be significant when other covariates were controlled for in the regression output.

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In summary, given that the majority of factors found to influence risk management levels are driven by the process of audit over time (the proportions of ‘gynaecology and obstetrics’, the London region, and teaching trust status), one can conclude that the outcome of risk management level assessments is largely outside the short-term control of trust management. There are factors such as foundation trust status and learning effects on time which were considered to be at the discretion of trust management which have been found to exert a significant influence on risk management levels – however, such discretion is over the medium-term horizon (for example, trusts have to go through a three-stage process with Monitor before being granted FT status). Hence, while a trust does retain the discretion as to whether to apply for a risk management increase or not at a risk managament level assessment (and the trust’s attitude to risk is likely to affect this decision), the actual outcome to such an assessment is largely beyond the short-term control of trust management – adjustments can be made but these are largely only practical over a medium term horizon.