The NHS, like all other healthcare systems in developed countries, will soon run out of money.
All these systems have become used to increases in resources that have more than kept pace with the rising demand for healthcare caused by an ageing population and higher public expectations. This will now stop and the NHS will have to adjust.
The sector must now size up its healthcare offering and create imaginative partnerships where patient value is at the centre and organisations of medical staff, their kit and drugs supplement that
Some NHS resources can be saved by squeezing and cutting, but to ensure there is a sustainable NHS into the future we must develop a new business model with a new economics. This is possible; it has been achieved successfully by other industries and services.
The NHS currently has an economic model that sees all value being created by medical personnel, their kit and their drugs. When the patient comes into contact with these healthcare staff, value is added to the patient’s healthcare. That is why, if the NHS is to provide more value, it always needs to possess more medical personnel, more kit and more drugs. In this model the patient is simply a sponge on value.
The reason an ageing population is so threatening is that, within the existing economic model, the more very old people there are the more value is taken from these providers of value.
Other industries create new business models on a regular cycle, many by developing their customers as providers of new sources of value. When I go to a supermarket, I do a lot of work selecting groceries and then scanning their barcodes when I check out. As I do this, I create value for the supermarket.
Similarly, I do my banking online at home, personally sending several bank tellers and call centre staff into unemployment. I add value to the companies who “provide” my shopping and retail banking and you know I enjoy it and feel empowered by it.
Around 70 per cent of NHS costs are spent on long term conditions affecting 17.5 million people. If these patients are put at the centre of adding value to their healthcare it could add considerable value to the economics of the NHS.
But this will only work if - as with supermarkets - the economic value added by the patient is multiplied by the economic value added by the logistics and the expertise of the medical staff, their kit and their drugs.
In other services and industries, the disruptive innovation pointing the way to realising new value usually comes from outside the industry’s mainstream.
By definition, the mainstream has made a success out of the existing business model, so why would they consider ditching it for something untried and new? That is why the new business model for the health service is unlikely to come from inside the best NHS institutions.
The public sector is outside the mainstream, but the third sector has millions of open relationships with the public, so it is trusted.
The public works for free and raises money for the third sector, but they would not do the same for public or private sector organisations.
The third sector also makes it a goal to empower people while it works with them. It is not good enough for them to “deliver” a good service. They must ensure the person getting the service has more power at the end of the interaction than at the beginning.
This is why the disruptive innovation that will change the NHS business model will emerge from England’s third sector. Parts of the third sector are already creating services for the NHS that realise new sources of value.
The sector must now size up its healthcare offering and create imaginative partnerships where patient value is at the centre and organisations of medical staff, their kit and drugs supplement that.
If the NHS is to survive, let alone thrive, it will have to find ways of buying in to these disruptive innovations that will realise much better value.
NHS commissioners will have to encourage this new business model to work alongside the organisations that created the old business model and develop partnerships with the third sector.
The NHS has been talking about patient centred healthcare for some time. Patient centred care will only really happen when the NHS realises the value that patients can bring to the NHS.
It is economics that will bring this change. It’s the third sector that will realise the value of that new economics and help maintain a National Health Service paid for out of national taxation and with equal access for all.