IT investments must deliver real cash-releasing savings in austere times, health policy expert Professor Paul Corrigan says.
Prof Corrigan, a former health advisor to Tony Blair, told attendees at the Healthcare Efficiency Through Technology Expo that the NHS needs to plan for a further decade of austerity, while managing huge increases in demand from an ageing population.
Against this stark background, all technology investments “will be seen as costs unless they deliver real cash-releasing savings.”
Professor Corrigan called on the NHS to ramp up investment in digital channels and decisively break with the presumption that healthcare must be delivered face-to-face by making greater use of email, video, phone, TV and social media.
These new investments in digital channels, “must be accompanied by de-commissioning of traditional services or they will just be extra cost.”
Professor Corrigan said that while in government he regularly had technology companies pitching their latest “gizmo” for the NHS, but they almost never released savings.
In light of the flat-lining economy, he predicted that the NHS will remain tax-funded – “that’s not an issues for the next two elections” – but its share of gross domestic product will remain static.
As a result, the ‘Nicholson challenge’ to deliver £20 billion in efficiency savings by 2014-15 is set to become “the new normal”, in which the NHS will have to achieve between £4 billion and £5 billion efficiency savings every year.
He believed the real work on efficiency savings “has barely begun”, as most of the current savings stemmed from a salary freeze, which cannot be sustained for a decade.
Professor Corrigan explained that the greatest growth in demand for healthcare is coming from people aged over 85, with more than one long-term condition, where demand is increasing at between 2-4% a year.
“Over the rest of the decade that’s a 25% increase,” he added. “The NHS belief is that it can just barrel through, but if it carries on the same way it will go bust.”
Many trusts are already struggling. In June, NHS regulator Monitor said 21 NHS trusts were “financially and clinically untenable”.
Professor Corrigan argued that other industries have shown what can be done.
“We need to do what other industries do, by developing significantly better outcomes for the same level of resource,” he said.
“The way they do that is to use technology to transfer the value equation by getting out of high-cost and low-value creation.”
However, he stressed that such changes are inherently disruptive as new technology investments can only deliver savings if they “get rid of the old business model."
This means de-commissioning services from hospitals, particularly out-patient services, so that more healthcare is delivered through self-service digital channels.
“The idea that the only way healthcare happens is if a patient comes into contact with a healthcare professional in a hospital is one we have to get away from,” he explained.
Professor Corrigan stressed that he wasn’t saying that “no value happens in hospitals”, but that hospitals are not the only way to deliver healthcare and the dominant model needs to be challenged.