• NHS needs to spend up to £8.2bn upgrading digital capabilities to achieve up to an estimated £13.7bn, key research says.
  • The figure consists of “upfront investment” of up to £5.2bn and then up to £3bn for “running costs”.
  • This could deliver between £8.3bn and £13.7bn.
  • The Department of Health submitted a spending review bid for up to £5.6bn of additional funding for technology projects. 

The NHS would need to spend around £8.2bn on upgrading its digital capabilities to achieve up to an estimated £13.7bn of savings by 2020-21, according to key research commissioned by NHS England.

Details of the research by McKinsey & Company, obtained under the Freedom of Information Act by pressure group Spinwatch, emerged at an important time, with the government due to publish its spending review on 25 November.

The research is understood to have been used to build the case for a Department of Health spending review bid for up to £5.6bn of additional technology funding, details of which were exclusively revealed by HSJ last week.

The lobby group obtained a summary of the research on a powerpoint presentation dated April 2014 (see attached).

It said the NHS would need “upfront investment” of between £5bn and £5.2bn, then between £2.3bn and £3bn to fund “running costs”. This could deliver between £8.3bn and £13.7bn savings, the research estimated.


Tim Kelsey

The existence of the research was made public by NHS England national director for patients and information, Tim Kelsey, in June but the organisation has not published it. Mr Kelsey told HSJ the “median” potential savings figure for the work had been calculated as £10bn, but he stressed this was an estimated figure.

The research recommended:

  • Arm’s length bodies work together to develop a consistent set of incentives to enable the plans
  • NHS England reviews what incentives it can put in place to enable adoption and cultural change with appropriate partners such as the Care Quality Commission
  • The launch of a communications exercise to make local decision makers aware of the potential benefits of digital transformation
  • The establishment of a comprehensive digital implementation pilot. This would be a single region pilot which would be used as a reference point for the wider system

It said between £3.2bn and £3.9bn were available in the acute sector; £1.2bn to £2.8bn in primary care; £1.4bn to £2.2bn in community care and £700,000 to £1.3bn in the mental health sector.

The research said “interventions with the largest potential and relatively strong-medium evidence impact” include data sharing via electronic health records; digital lean tools e.g. e-rostering, bar-coding; doctor performance transparency tools, and remote monitoring equipment; electronic booking and reminders to reduce DNAs; and increased administrative efficiency (see page 14).

The work also analyses net opportunity against ease of implementation. Only one area, outpatient teleconsultations in acute care, is deemed “low difficulty high saving”. In “low difficulty, medium savings” it cites: e-rostering in acute care, community and mental health; acute care procurement; electronic booking and reminders; remote booking in acute care; and online booking in primary care.

In the category “high difficulty, high saving” it cites electronic health records for acute care; transparency on clinical performance in acute care; patient flow management in acute care; and integrated care.