Let’s talk about the NHS 5: why health probably won’t create wealth. #Health

The 3 Es: employment, ‘ealth and education

Photo by Andrei J Castanha on Unsplash

The Darzi Report, 2024, wants the NHS to contribute more to prosperity, outlining 3 mechanisms (chapter 6, Health and Prosperity):

• A healthy workforce promotes a healthy economy.

• ·The NHS’ science promotes us as a ‘scientific superpower.’

• Green successes cut carbon, and energy bills by £260M p.a.

The trouble is, this is small beer against the NHS’ budget and GDP. Worse still:

• Incentives – the NHS has no mandate to improve life at work, and can make work harder

• Risk – health is not set up for the risks that create wealth

• Economic impact - the NHS has struggled with even modest business methods

Without a rethink, the NHS will struggle to be more than a prosperity barometer, much less a generator of wealth. That said, it could support the economy with smarter procurement and in catalysing new jobs. In the meantime, the main game has to be greater productivity in what it does.

‘With the NHS budget at £165 billion this year, the health service’s productivity is vital for national prosperity.’ (Darzi Report, p 6)

Incentives: why isn’t the NHS keeping more people in work?

Setting up a free service for all while expecting a payback as healthier people work longer is almost an oxymoron, since without prioritising workers, it’s hard to enhance their lot.

My experience is that the NHS is a time bandit when it comes to work: it’s nigh on impossible to schedule visits with working convenience; and time stands still whenever you pass through an NHS doorway.

I’m not saying the NHS should prioritise workers. That’s a meandering conversation where I lack strong convictions.  However, if it doesn’t, it can’t expect a prosperity payback through taxes.

Risk, innovation and prosperity

Let’s sidestep questions around our longer lives or whether energy bills dominate the NHS’ carbon footprint.  Since the Falklands’ crisis and the shopping spree that followed, health has consumed more of the public budget than war. However, the NHS hasn’t yielded much of a peace dividend in the past four decades.  Why?

In a US context, Daniel Sarewitz (Nature, see here) reflects on how poorly other agencies have picked up the DoD’s mantle as peace proliferated.

‘The Department of Defense’s legacy of innovation concealed weaknesses in the civilian research agencies.’ Sarewitz, 2011.

It’s scary how much of modern life was birthed in conflict: air travel, communications and computing, displays, electronics, material science, and satellites, to name a few.  Huge commercial sectors – the internet, the knowledge economy – came from companies that worked for the miliary or were sustained by it.  (I discovered as a PhD student that we could afford our spectrum analyser because the US Navy put them in its submarines.)

The scale and range of innovation funded from the military purse has driven the US economy and those of its allies in unprecedented fashion for over a century. To reap such a dividend from other purses we must learn from history.

Another penny dropped for me, maybe 15 years ago at a health innovation event. The widget inventors looked happy and rich; those who had changed the process not so much: they lacked sleep as they kept their shows on the road; and they had fielded criticism from colleagues for reducing waiting lists. In crude terms, better widgets are worth a fifth to a twentieth of what better process is worth to the NHS. Our pharma sector is world-leading, but drugs still only swallow a fraction of the budget.

We can’t seem to pull the right levers. Worse still, we innovate here, but the money is made elsewhere.  The Nobel laureates may hang around, but the profits certainly don’t.

The Penguin Principle

The NHS’ flavour of risk aversion is such that it’s hard to pin any hope of economic prosperity on it. A chief executive once put it to me this way: it didn’t really matter what the NHS metrics were, so long as you were in the middle.  It was, he explained, like penguins on an ice floe. They know there are fish down there, but also sharks. (I know sharks are fish, but the parable only works if you differentiate between fish that eat penguins and fish penguins eat.)

If you dive in too early (or emerge too late) you get eaten. If you splash in with the crowd, you’ll survive while you eat your fill – until your luck runs out.  Economic growth is driven by productivity leaders, but the NHS often trains that instinct out. Instead of smart, world-leading business practices, we end up with safe but ineffective methods.

Economic impact

Let’s take procurement. In an earlier post (see here), I cited a terrific success with hearing aids, but that seems to be the exception rather than the rule. More often, there’s a tussle between the NHS wanting to centralise buying power and companies resisting it. Neither side has managed to make the potential of a colossal customer with zillions of local outlets work, for either side!

Another example: at one hospital I was told that the NHS was the only place where consignment purchasing was more expensive than just buying stuff. Normally, consignment is win-win: the product is stored on the customer’s premises but only paid for as it is used. This saves vendors on warehousing, transport and security and helps the customer’s cash-flow. As I heard the story at the time, too many people in the NHS keep their own local stores because they don’t believe they’ll get things in time if they don’t. What’s more, apparently, people went about raiding other people’s stores! I hope it’s changed, since. More sadly, I don’t think I’ve met anyone in business who likes working with the NHS. What’s going on?

At the very least, the NHS needs to make procurement – everything from drugs and supplies to IT and buildings – work as a service. It’s not about cutting prices with standardised lists or delivery schedules; it’s about getting what is needed to where it is needed without impeding the really expensive delivery teams.

Let’s get back to Sarewitz: what has the military done so successfully, since presumably nobody starts a war principally to strengthen their economy?  First, it incubated technologies in-sector that spun out later as independent successes (e.g.: satnavs). Second, it realised that its only value to the economy lay in winning wars: by focusing on its main mission of affordable excellence, prosperity was a by-product.

Could the NHS follow suit? Perhaps it could leverage its strength as an employer. We’re told the economy is all doom and gloom, and it will be if we can’t create two or three million new jobs in the next few years.

In a series of posts on employment I looked at creating high-value jobs and provided health-related examples (see here and here). They are wild ideas and with only 1½ million employees the NHS can’t step up to the plate, on its own. But it might make a start.

Can the NHS make us more prosperous as a nation?  Perhaps, but probably not in the way we were hoping.

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)