Let’s talk about the NHS 3: why have hospitals so successfully harvested ever more of the budget? #Health
The 3 Es: employment, ‘ealth and education
Photo by Diana Polekhina on Unsplash
The last post, connected the Darzi Report, 2024 to the Wanless Report, 2022 and noted how much the two had in common. However, the NHS was consuming half as much GDP back then as it does now, which makes Darzi’s challenge much harder. Here we turn to one of the challenges Darzi raised, namely why hospitals have grown at the expense of everything else
Stepping back, I believe we need an innovative nationwide project that receives an initial investment of around £10Bn, with year-on-year savings thereafter. A snapshot post is here, while the July/August 2024 series is:
Fixing the NHS: hurdling todays barriers for a fitter future
Fixing the NHS: the digital arts and a simple knowledge model
Fixing the NHS: the digital arts and getting the right numbers
How to design a centre that closes 4,000 patient journeys a month for £1,000/patient or less, all in
To address our thorny question, we’ll change our approach: it’s all about scale!
You’ll have seen this chart before, explaining what encourages providers to cluster while users wanted them spread apart. Darzi worries that the top left quadrant keeps gobbling up more of the budget than the bottom right (his mental chart is reversed – he wants a left shift rather than a right shift – but it’s the same thing).
Well, of course hospitals have won the funding battle for decades! There are many explanations, but scaling rules show why it’s inevitable. Scaling rules are mysterious, and I’m not sure the NHS is on top of them. Trouble is, they are exceptionally widespread and explain so much!
Scaling rules have been around for decades. Even at school, we assumed animals were spheres. As they got bigger, their surface area scaled as the square of length, while volume scaled as the cube. Heat is generated by volume but lost by area, so staying warm gets easier, and metabolism slows, with size. A biological scaling rule lies behind this: it’s sub-linear because the benefits of scale involve slowing down.
However biological (sub-linear) scaling rules plateau as growth turns over. For instance, we grow rapidly, slow down, stop growing and eventually die. The biggest animal on earth today, the blue whale, is probably the largest that has ever lived: biological size saturates.
Geoffrey West’s 2011 TED talk explains scaling for cities. This time it’s super-linear, and things go faster – about 15% – every time you double in size, from income to crime, and even walking speed! So, cities can grow forever! Eventually everything is spinning so fast that it just explodes. People usually manage to innovate – perhaps with breakthroughs in transport, or sewers – to escape the spectacular explosion, but you must innovate faster and faster to stay ahead (watch the talk!).
Are hospitals sub-linear or super-linear? Well, companies scale like biology, not cities: they all grow, plateau and die! My guess is that hospitals are more like companies and dinosaurs, than cities but it probably doesn’t matter. The scaling rules tell us hospitals grow faster than (smaller) primary care organisations and must die after growth stagnates or (maybe) in a spectacular crisis.
You can’t fight scaling rules. You can out-innovate them (hence my proposals at the start) or go with the flow.
Scaling rules that work in your favour
Let’s focus on the scaling rules around everyday objects. When I worked in R&D, we’d need to estimate what a widget on the bench would cost in the market. We’d guess at how you would make, say, 100-1,000-off to get going and work out what that would cost. Then we’d apply a scaling rule: every time you doubled the quantity the unit cost/price would fall (as engineers, we didn’t care about the difference). For an 80% rule, this was by 20% to 80% of what it was before. Thus, for instance, a 1,000-fold (doubling 10 times = x 1,024) increase in demand would bring the price down to around 11% of where it started. A million-fold increase would take you down to 11% of 11%, or just over 1%.
The NHS has had at least one stunning success with cost-volume curves, by opening millions of NHS patients up to digital hearing aids. Two decades ago, analogue £40-a-pop NHS hearing aids gave way to far superior digital devices. To do this, the NHS drove the cost of digital from £1,500-2,000 in the high street to £60 a pop on the NHS (Phillips et al, 2007). I’ve cheated slightly by ignoring the cost of service, but it was still spectacular. Here’s our 2007 paper that showed such rules exist in MedTech, but no-one seems very excited. The rest of the world knows that scaling rules apply even to service delivery – so use them!
It would not be difficult, for instance, to give everyone high-functioning artificial limbs for about the same cost as we’re paying now, by following the hearing aid trail. Clearly, that interests me, but then I discovered that it won’t happen because of a belief that some artificial limbs should cost more. The argument is that veterans deserve the best because of their sacrifice. I completely agree about giving the best futures we can to those who lost theirs in serving us. However, the current scenario just costs more all around.
The real tragedy for veterans is how poorly so many fare in civvy street and how many end up on the street itself. By all means, design an expensive limb for living rough but if you really want to help, get every veteran a degree-level qualification (or equivalent) and secure them a highly paid future.
I could go on. One could reap an almost immediate scaling reward of around 20% wherever a trust offers the same service in two distinct ways by separately trained teams. The debate may get heated, but either the evidence exists that one approach is better (in which case adopt it) or it doesn’t (in which case just make a choice).
Lots of things scale with volume – cost, good outcomes, even patient experience once you have a well-designed service. Study things, plan carefully, then act!
Upsizing the lower right quadrant
Although the NHS talks a great deal about digital, it betrays little awareness of how profoundly information systems can integrate the functioning of many small groups into a single larger virtual group. We shouldn’t be too harsh, since industry and commerce have only the hairiest grasp (or those hours on the ‘phone to call-centres would be over). This would allow the size imbalance between our quadrants to be reduced, perhaps even equalised.
The military has worked for a long time on a variant of this problem (see Situational awareness: why integrated health systems won’t work without it (Hospital Times, 2019). The key to success lies in our simple knowledge model – which shows we’re not connecting people to people properly.
Can we reverse the inexorable growth of hospitals at the expense of everyone else? Probably! It will be hard because it hasn’t happened by accident, and it won’t disappear on a whim. But it can be tamed if we really want to.
(I’d like to thank Geoff Rodgers for a helpful chat over an earlier draft of this post. Sadly, all errors remain my own).
Professor Young: researching for 40+ years; in healthcare for 25; and using NHS limbs for 50+.
The series
Let’s talk about the NHS 1: we need a common language (12 September 2024)
Let’s talk about the NHS 2: when was the golden age? (19 September 2024)
Let’s talk about the NHS 3: why have hospitals so successfully harvested ever more of the budget? (26 September 2024)
Let’s talk about the NHS 4: how many honest conversations can we have? (3 October 2024)
Let’s talk about the NHS 5: why health probably won’t create wealth. (10 October 2024)
Let’s talk about the NHS 6: how close is an integrated NHS? (17 October 2024)