Navigation

Asking the right questions: UK healthcare and the NHS

 

Efficiency in the NHS – how can it cope?

Healthcare around the globe is facing a funding challenge driven by increasing life expectancy and the associated availability of the new technological and pharmaceutical treatments which are helping to support improved quality of life for longer.

Payment for these new solutions can be increasingly expensive, consummate with the complexity of the research that has supported the development, the technology/equipment needed to deliver them and the extended timeframes under which individuals may be treated.

In many respects, the NHS is facing headwinds no different from the rest of the developed world. However, the sheer scale of the NHS, particularly as a publicly funded organisation, masks inefficiency.

Various studies on listed businesses over time have suggested a 1% loss of productivity per employee for each 10% increase in employee numbers. Public sector organisations unfortunately lack the commercial oversight of an external investor group to instigate and review changes, of the type evident recently as the markets have reassessed value metrics for tech businesses, which had become bloated on the excess finance available to them. This has led to 200,000 job losses since the start of 2022, including cutbacks at both Facebook (13% of its workforce, 11,000 staff), Microsoft and Tesla (10%), among others.

To quote a few metrics on scale: in 2022/3, £152.6bn was allocated to NHS England equating to c.45% of government spending or c.10% of UK GDP. It employs 1.3m directly, one in 26 of the UK workforce, not including suppliers to the NHS not directly employed by it.

A huge behemoth and a national institution. For many reasons it is worthy of support and appropriate funding. But what is appropriate, short term and long term? And what are the demands we should be making now to ensure it is fit for purpose in the future?

 

 

What is required?

Every organisation has to evolve and refine its business model over time and work out how best to operate and spend to give the best return to its investors.  In an SME context, each £ invested would be considered for its return and impact on the business, with entrepreneurs continually looking for opportunities to expand what is working and change what is not.

Since being set up 1948, the NHS has expanded its range of treatments, but few would question that it has failed to develop in line with the demands being placed on it, albeit different commentators may attribute this to different sources. Like any large organisation, control of funding is more disconnected, with decision making being inconsistent and based on an incomplete knowledge of the huge amount of potentially helpful data across the organisation.

The core principles of maintaining efficiency are consistent across organisations, albeit that the obstacles to be overcome vary across different sizes of organisations and sectors.

 

Final thoughts

In conclusion, change is needed and short term the cost of such changes may have to be financed in parallel with the accumulated health status of the nation and the NHS whilst healthcare (across the globe) moves from a reactive to a more proactive approach.  In a series of short articles, “Asking the Right Questions” will dive into each of the inter-linking elements that drive ongoing efficiency and consider how these might be used across the healthcare environment to support the long term operation of the NHS.