The fortnightly newsletter that unpacks system leaders’ priorities for digital technology and the impact they are having on delivering health services. Contact Ben Heather in confidence here.

Last week, health secretary Matt Hancock backed a Taxpayers’ Alliance report claiming the NHS could save £12.5bn a year through automation. In a foreword, Mr Hancock thanked TPA for putting the “huge potential to improve productivity” on the agenda.

Claims that tech investment can save the financially-struggling service have a long tradition (Reform said something similar about robots just last year). But, like the reports that proceed it, the TPA’s predictions will almost certainly be wrong.

Most of the time, in most places, introducing new technology into healthcare does not generate savings. In the short-term, the opposite is true and, when savings do arrive, it is usually not for many years.

Despite this track record, NHS leaders often insist digital investment should have a financial return on investment, and quickly.

This does not mean we should stop investing in new digital technology. But the case shouldn’t be made on pounds saved.

Saving billions

In 2010, the US government rolled out a $30 billion programme to digitise the country’s health system. By some measures, the programme was a success. In 2009, only one in 10 hospitals had an electronic health record. Today, that figure is nine in 10.

By other measures, it was a disaster. Evidence of safety and care quality improvements is patchy and, despite the billions spent, evidence of savings are patchier still. Evidence is growing of EHR-related burnout among US doctors and a commensurate rise in medical scribes to lighten clinician’s digital load.

The UK’s own multibillion-pound National Programme for IT a few years before also failed to deliver, among other things, the savings that would justify their expense. Not adequately chastened by that experience, in 2015, NHS England predicted a much smaller digital investment would save the NHS £10bn by 2020. Short of a miracle, this will not happen.

None of the above should be especially surprising. In his 2016 review of NHS IT, Bob Wachter repeatedly references the productivity paradox, in which higher investment in IT correlates with slower, not faster, productivity growth (and hence less saving). Experience from other industries suggests it typically takes about a decade to overcome the paradox. As Dr Wachter suggested, the NHS should set its expectation accordingly.

Evidence from the US experience shows even a decade may be optimistic.

A five-year plan to save

While the NHS has embraced many of Dr Wachter’s recommendations, it has largely ignored his warnings about seeking quick savings from tech investment.

NHS organisations wanting a chunk of Mr Hancock’s £412m central tech pot need to show their tech project will generate annual cash-releasing savings over the life of the three-year fund. The financial return on investment was considered equally as important as delivery confidence and “broader value consideration” in deciding which projects were funded. Projects that could demonstrate a 20 per cent annual return received higher marks.

In the NHS long-term plan, five of the 10 efficiency programmes rely on some additional tech investment. According to the plan, automation of administration will save £700m a year and increasing uptake of electronic prescribing to reduce the use of low-value medicines, saving £200m a year. By cutting outpatient appointments by a third, digital GP consultation and other remote treatment tech will save the NHS £1.1bn a year, the plan says.

All these savings are predicted within the next five years. While some new tech may deliver in that timeframe (electronic rostering and prescribing are likely candidates), history suggests the reality will fall short of the ambition.

Saving lives (not always pounds)

While saving money by investing in tech is a long game, that doesn’t mean we shouldn’t invest in better technology now.

Better tech can save lives.

There is good evidence that electronic prescribing can dramatically cut medication errors. One study found that a full closed-loop electronic prescription and medicines administration system, properly implemented, could halve serious errors. 

Ageing IT systems that don’t speak to one another are regularly cited as contributing to patient deaths in the NHS. Perhaps improving the information available to a clinician treating a patient should be given more weight than annual cash-releasing savings when deciding on whether to invest in an IT project.

Artificial intelligence could, in some distant future, save the NHS billions by replacing thousands of administrative staff. But it is already reading medical scans with accuracy matching the world’s top clinicians. With a severe shortage of radiologists in the NHS, such technology can exponentially increase access to treatment for thousands of people.

Technology has a patchy history of saving money in the NHS. But it has a long tradition of improving care.