The NHS Malthusian Challenge — Purchasing and Beyond (Part 3)

This is the last in a three-part series from guest author, Adrian Fawcett, Chairman of Healthcare Cost Recovery, the UK’s leading financial reimbursement specialist for the NHS. If you missed Parts 1 and 2 they are here and here.

5 Themes for Lasting Change

Future speculations on the shape of the NHS have presented a myriad of new proposals around flexible models of service delivery, tailored to the needs of local populations with hints at everything from virtual, online and tele-health clinics’ initial doctors’ appointments to the proposal of A&E in-house pharmacies and the like.

If we were to step back further and take a more holistic approach, there are perhaps five themes we could consider to promote real and long lasting change. However, we should not miss the opportunity in the pursuit of the perfect to just make things better.

  1. Introduction of financial productivity performance measures & metrics.

Recruit, reward and performance manage leadership and staff based specifically on these. We have grown NHS spending by more than our economy is growing for the past 25 years - we must now improve efficiency to assist in closing the gap. The "treat the whole person" initiatives are clearly a part of this to avoid multiple healthcare teams separately treating an individual for different specific issues. Rather look to facilitate a single overall treatment and support process.

  1. Review length and service agreements

Alter the framework of healthcare employment to be a more normalised performance-related arrangement rather than perceived auto-employment. The aforementioned point 1 supports this by definition. Support with the upskilling of senior management provides increased capabilities for accountable commercial performance management, which moves away from outdated early retirement or internal transfer agreements to a supportive development-led performance culture.

  1. Billing Engines which are fit for purpose

Introduce a transparent billing engine into the NHS and ensure that every patient and user is aware and educated about the cost of what they are consuming, even if they are not charged at all. The importance of one’s customer and user recognising the value of what they are getting is as important for staff delivering it as it is to the consumer receiving it – if habits are to change. Free at the point of delivery does not mean it is free to produce and deliver and the public needs a better understanding of what they are using and how. This is not to perturb the use of the NHS for emergencies – quite the contrary. Through methods like this and ensuring that all user groups, such as third-party insurance companies, corporate bodies and those attempting healthcare tourism, are automatically invoiced or asked to reimburse the NHS for their service consumption, we will ensure we have an NHS which can facilitate emergencies and treatment for all long into the future.

  1. Free at the point of use – but not free unconditionally

Introduce a set of minimum charges for users calling on the system after a certain limit, who are above a set income and have repeat usage. Examination of the introduction of a flat rate privately funded NHS insurance policy for all under 60 year olds to meet a cross section of health incidences or increase a slightly higher marginal tax rate if preferable to the individual. In this way the NHS can engage everyone in sharing the responsibility of supporting a population, now with a life expectancy of over 20 years past retirement, irrespective of their own consumption or needs. In effect our life expectancy has risen by 8 hours a day for the last 20-plus years and we need new ways to support this - as quality will be the detriment if we don't. 'Demand need' cannot be stunted or thwarted - delivery efficiency, self-responsibility and the availability and sources of funding can, however, all be tackled and progressed. These should now be the acceptable battleground of our situation. This is not some sort of privatisation by the back door, it is simply enabling the prioritisation of funding of a public system through the front door.

  1. The myth around nationalisation

There is an irony which has manifested over the past 10 years plus in UK Healthcare - the hidden reality being that all of the major national independent and private hospital systems (Nuffield, Ramsay, Spire & BMI) are now all in effect 'nationalised.' They all see a significant amount of their patient activity funded by the NHS - and all of them would now be financially insolvent if these huge percentages of their current activity were not funded by the NHS. We have therefore at the same time as suffering the most significant NHS funding increases and pressures, effectively nationalised our private hospital / healthcare system. Dr Jacky Davis and other doctors and campaigners including the National Health Action Party have put a cost on this process at £10 billion a year. Although the Centre of Health & the Public Interest put it at a conservative’ £4.5 billion a year. Irrespective, Without the NHS none of these providers would be financially viable - we the tax payer are in effect supporting the maintenance of the private asset base and funding of the private hospital system for the UK. Their assets should now be viewed as being part of those available to the NHS and we should rationalise either those that are not fit for purpose elsewhere, or these - so we are not burdened by excessive costs and fixed costs of incremental building and facilities.


In the midst of looking for efficiencies often through the use of sheer powerhouse economies of scale, we can look to Lord Young’s report on ‘Growing your Business’ to identify the ways in which the NHS can become easier to do business with, including everything from abolition of PPQs under the EU threshold through to adoption of standard payment terms, to ensure that local SMEs are not precluded and the NHS continues to provide purchasing power to the British economy itself.

May 2015 provides uncertainty around exactly what the future holds for our most loved institute. Whilst no ‘E-Government’ will ever take the place of healing hands it is time to get serious about removing what is now an increasingly inevitable postcode lottery of healthcare. The NHS was originally built on pioneering innovation but the world has changed since 1948 and we cannot allow fear of adapting to new challenges to block progress or ignorance to seek to maintain the status quo. In the words of Sir Bruce Keogh: ‘The NHS is an international icon of the British social conscience, designed to replace fear with hope. It’s owned by the people for the people, funded by everyone for everyone. Irrespective of age, social status, race or creed ... ’ Only by harnessing the changes and not dodging the hard decisions can we keep it largely that way. We as a population, our needs and our expectations, have changed and we need to make sure the NHS does with us.

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First Voice

  1. Sam Unkim:

    Re: “increase a slightly higher marginal tax rate if preferable to the individual”
    Sorry but I am already expected to pay tax for things I dont want/use/need like Trident, Aircraft Carriers without planes, Foreign Aid, Subsidised trains operators ,HS2, Prince Andrew and Quantative easing etc.
    & now you would like me to pay extra for something I do need……… Not a big vote winner

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