Process

In health care as elsewhere more than one 'technology' (core process) is sometimes capable of producing a given good or service. This raises the questions of whether the specific type of organisational structures found in partnerships and NHOs, tend to:

1. Select certain types of core process (technology) rather than others.

2. Operate a given type of core process in specific ways characteristic of NHOs.

A core process includes not only the production of a good or service but also its distribution to users. Distribution and marketing are therefore also

involved in the core process. Indeed many cooperatives have originated asdistribution and marketing organisations.In this context, 'process' means not the organisational activities ('organisational processes') which occur within such a structure, but the core productive process – the 'technology' –

by which an organisation actually produces the healthcare or other goods and services, and thereby also the policy outcomes of interest to policy-makers and managers.

2.5.1 Production of goods and services

For organisations in a market or a quasi-market, obtaining a specified income for members implies, sustaining a level of sales and therefore output sufficient to generate a break-even income. Assuming that producer organisations face declining average total costs over their range of

production possibilities (171), that implies creating and exploiting

economies of scale and scope up to that point. Even voluntary organisations which do not aim to generate livelihoods for their members nevertheless have to obtain sufficient (if proportionately smaller) inputs to sustain their core process (cover operating costs). When NHOs rely on donations or other fixed or precarious sources of income or inputs, they face the necessity of maximising the output from a given set of inputs. That is, they try to maximise efficiency in the sense of minimising the inputs required to produce a unit of output, and therefore select core processes accordingly.

To obtain livelihood for members of a given occupation implies selecting processes of production which guarantee a role, or a fortiori give the central role, to the occupation in question. For to select a process of production is also to select (a limited range of options for) a division of labour. In this respect, members are likely to be risk-averse and reluctant to diversify their activities very far, leading to relatively conservative investment decisions (172,173). Maintenance of what the members regarded as good working conditions is likely to promote the adoption of working processes that automate or remove laborious, hazardous or low-status (see below)

elements of the work process. The goal of creating working activity and its products which their members regarded as being of good technical quality and befitting their occupation is a second reason to predict that NHOs would (in contrast to corporate and many public bureaucracies) resist working processes that routinised or de-skilled work. If anything they would adopt work processes that increased the skills required for existing occupational groups, transferring their own less skilled work a (putatively) less-skilled occupation, providing the latter with tasks at the top of their range of skills.

Thus the division of labour would, so to speak, shift 'upwards' in terms of skill for both occupations. Such changes would also satisfy the goal of promoting learning and other forms of self-development. In partnerships the additional profits from this 'leverage' (extended work roles) of employed staff accrue to the partners. This tactic implies codification of knowledge so that it can be transmitted to employees who are less expert than the

partners (141).

Quality of product would, we predicted, be defined on a priori technical and normative grounds. This obviously implies the selection of processes of production intended to to produce a complete, integrated product or service

realising those standards. Conversely such a goal also implies not producing what the members or partners would regard as technically redundant or superfluous products or services, including ones over-specified for the consumer need they were attempting to satisfy. If the partnership's or NHO's product or service quality is defined on technical or normative grounds, that implies also a policy of transparency ('honesty') about its specification in informational, promotional or marketing materials.

It is difficult to predict a priori what effects upon selection and operation of the core process of product would arise from the non-economic values that members held. For those effects would depend on the content of those values, hence upon the social origins (112) of the NHO itself. However paths for NHO formation include 'rescuing' an earlier enterprise or the pursuit of other localised goals. Then the NHO would limit the scale of its core process to its community or place of origin.

2.5.2 Consumer NHOs

Consumer NHOs operate either or both of the following core processes:

1. Mediating in interactions between its members and third-party providers so as to shift the balance of information and bargaining power in the members' favour when buying complex services such as healthcare (25). Ancillary to such interventions are social marketing campaigns (e.g. to reduce the fat, sugar and salt content of foods) aimed either at the producers of consumer goods or at changing state regulation of the producers.

2. Commissioning services on its members behalf. This requires well-developed search, bidding, legal (contractual), financial control and monitoring processes. It also requires negotiating and bargaining skills and, in a large organisation, consumer research staff to elicit and formulate its members' demands as consumers, and to recruit new members (subscribers). It may involve 'conflict handling' or discrepant demands from different groups of members). Typically these activities require a subjoined hierarchy of specialised staff.

To resource the above requires recruiting paying members, and any

consumer NHO needs activists to run it.. To this end Birchall and Simmons (174) propose a four stage strategy of identifying 'mobilisation potential' (reactivating membership lists, conducting member research), making membership more meaningful (providing better information to members, re-establishing democratic processes), building confidence and trust, and making organisational structures focus on their accountability to members.

2.5.3 Marketing mix

One way to summarise the above predictions is to contrast the marketing mix (175) which the above accounts imply a partnership or NHO will

develop with its corporate counterpart. The two marketing mixes will have some features in common. The legal framework usually sets minimum requirements for the content and veracity of consumer information, product quality and safety. The same regulatory and ethical codes apply to

professionals whether they work in a partnership or for an employer.

Table 2 predicts the differences which, because of their different goals, will nevertheless remain between the marketing mix of a producer NHO and that of a corporation. The table sets out the two types of organisations' preferred marketing mix, given their goals. Actually achieving this mix in practice may of course prove to be another matter.

Table 2. Marketing mix in NHOs and corporations

NHO Corporation

Product Pre-defined quality standards.

Products guarantee members' centrality to production.

Product differentiation, unique selling points. Products designed to

maximise sales volume and saleable 'value added'.

Price Break-even. Initially below-cost price if necessary to gain market entry or remove competitors; thereafter highest sustainable price.

Promotions Transparent, technical content and/or representation of NHO's non-economic goals.

Persuasive sales promotions

Place Often tied to place (in the geographical not the marketing sense), local identity.

Footloose: any profitable sales channel or geographical location.

The goals of guaranteeing members' livelihoods and a predefined quality of service implies break-even pricing. The goal of predefined quality standards implies implies transparent and rational sale promotion methods; but as noted this may come into tension with the imperative to obtain income. A profit-maximising goal implies maximising the saleable 'value added' to products even when, in the terms NHO partners or members would accept, the added value is technically superfluous (e.g. surgery for cosmetic not therapeutic reasons). In the long term a corporation also has to obtain a break-even price for its goods (indeed more), but what costs that price covers and their relative size is likely to vary between the two kinds of organisation. For instance NHOs have no costs of payments to shareholders to bear, but are likely to have higher wage costs resulting from reluctance to de-skill, casualise or dismiss labour.

2.5.4 Impact on clinical workloads, job satisfaction and morale Professional engagement itself constitutes one piece of evidence for

professional satisfaction with their working life, hence morale. Accordingly one would predict (from Table 1) professional morale and work satisfaction to be highest in professional partnership, and successively lower in provider NHO, consumer NHO and NHS foundation trust (or similar hierarchy).

Professionals who control their own working conditions might be predicted to shift the profile of their workload towards the kinds of work attractive to

clinical professionals: work which their training equips them for; work

whose difficulty attracts prestige or status in the profession (176); or simply work which interests or psychologically rewards the individuals involved. If so, less-esteemed types of work would either be transferred to other occupational groups or (if they refused it) be dropped. One would also predict a clinical workload that selected either highly-paid activities and/or activities that enhanced the equity value of the partnership itself.

Greenwood and Empson (33) hypothesise that because partnerships use tournament career practices, they offer superior career incentives to

professionals resulting in higher effort and productivity i.e. workloads. Given NHOs' goals, one would predict higher pay for equivalent work than in

public or commercial bureaucracies. However one effect of restricting entry to professions is to create shortages of that kind of labour. Then

competitive pressure to recruit scarce professionals would compel other organisations to offer salaries similar to a partner's income. Because of their relatively egalitarian origins, one would predict lower pay differentials in NHOs and partnerships than bureaucracies.

2.5.5 Development of innovative practice

Greenhalgh et al. (177) find that an innovation is more likely to be adopted when it is:

1. Capable of small-scale trial 2. Reversible

3. Compatible with existing working practices

4. Compatible with existing organisation members' 'values' 5. Compatible with existing ways of measuring 'success'

Conditions (1) and (2) are technical characteristics of the innovation which apply irrespective of organisational structure. However because

partnerships tend to be small organisations, a sufficiently 'small' scale on is likely to be smaller than elsewhere. 'Compatability' requirements (3), (4) and (5) imply that innovations are most likely to be adopted when they conserve the existing patterns of control and benefit-distribution in an organisation. In health care, the necessary 'receptive' organisational

context (178) includes absence of professional opposition (179,180) and, in partnerships and NHOs no opposition from the members or partners (rather than employees). Assuming that an NHO or partnership adopts innovations which reflect its organisational goals (181), Table 3 outlines what preceding sections imply will be the pattern of innovation in professional partnerships and NHOs.

Table 3. Predicted patterns of NHO and partnership innovation

Provider NHO Partnership Consumer NHO

Dominant interest

Working members Professional Partners Activist consumers

Aims of

For producer NHOs, the objective of maintaining members' incomes and working conditions implies preference only for cost-reducing innovations which do not intensify or routinise work but do save costs in other ways (e.g. fewer inputs, less processing). Labour-saving innovations (e.g.

mechanisation) are compatible with this goal but not innovations which reduce costs by reducing wages. Mechanisation would imply a shift towards 'commodified' (i.e. mass) production. As explained, some micro-economists predict that NHOs will make fewer long-lasting, capital intense innovations

than corporations do. Because it does not distribute profits, a producer NHO has less incentive than a corporation to profit from quality-reducing

innovations (182).

Partnerships would select similar innovations but with the additional

constraints of selecting only innovations which retained the partners' control over the core processes (even if the partners no longer do the work

personally), not innovations which introduced technologies which the

partners could neither operate not control, and no innovations which risked causing large debts, for which partners have unlimited liability. That is a more conservative pattern of innovation than in limited liability or non-hierarchical producer organisations.

Not being controlled by producers, consumer NHOs would be open to a wider range of productin innovations than partnerships or producer NHOs, including innovations that radically altered the division of professional labour or even de-professionalised care provision.