McKinsey and the NHS: The missing link

There was a big fuss in the UK last year when the findings of a report by McKinsey on cutting costs in the National Health Service were leaked to the press. It was proposed that 137,000 clinical and admin posts would be cut in order to save £20bn by 2014. Vilified by the press, the government announced that it had rejected the report’s recommendations.

Now the new government has released the report in the interests, it says, of greater openness. And it makes fascinating reading on many levels.

There’s the obvious voyeuristic element: in consulting we all get a twinge of excitement from seeing how other firms do things. But what really struck me was the distribution of pages. The report has 122 pages in total divided into five sections. The first section (“the challenge and size of the opportunity”) is followed by a more detailed exposition of the potential savings and their implications. These sections show McKinsey at its strongest. While you may quibble with some of the individual points, the report has brought together a wealth of evidence, pulled together into some compelling conclusions, which it should have been difficult to ignore: previous recessions have always resulted in cuts to health expenditure; the recent one is the worst yet; there are inefficiencies in the NHS where money can be saved.

However, tucked in between the analysis and methodology sections is one entitled “making it happen”. This is divided into two parts: “mechanisms to capture value and enablers” and “overall programme architecture”. Both are very short, around 15 pages in total or just 12% of the whole report. Moreover, most of this space is given over to describing what the programme of work will look like at a high level, much less to what it will actually do. It may be unfair to criticise McKinsey for this: anything more could have been beyond their remit; perhaps we're only seeing one of their deliverables. But it does reinforce one of the long-standing problems with strategy consulting in general – the weak link between recommendations and implementation. Looking at this report, it’s hard to see what should happen next: yes, there should be a programme of work looking at tariffs and reimbursements; yes, a project manager could be appointed to run it; but what are they actually supposed to do?

The gulf between aspiration and action seems impossibly large.

4th June 2010