Five tips: how the private sector can drive change in the NHS

A public-private partnership approach can reduce costs and achieve better outcomes, say Vivek Madan and Pedro Sanches. Photograph: OJO Images/Rex Features

The healthcare system in the UK is facing a very serious crisis, with a number of chronic demand challenges and supply side issues putting the viability of the entire system at risk. The King's Fund estimates that, in the absence of a policy response, the growth in healthcare spend would require public sector debt to increase by up to 230% of GDP by 2060.

Despite this stark reality, the government is struggling to find a way of resolving the issue. More than 40 major healthcare reforms have been introduced since 2000, but their impact on controlling costs and improving productivity has been negligible at best – showing that pushing change from the top alone is proving ineffective.

The questions facing us now are fundamental and touch on the founding principles of the NHS: can the system ever be made sustainable? And is rationing care, compromising universal access, the only option?

We think not. Reducing costs without compromising quality and access to care is not impossible – but the path to creating a sustainable healthcare system needs to involve both private and public providers, with the private sector driving more of the change rather than merely reacting to government reforms.

Private sector participation in health delivery has been increasing in recent years, but still accounts for less than 10% of total spend. The government and the private sector are yet to develop ways of working together efficiently, and private providers continue to be viewed with suspicion in parts of the NHS. While this is true, the private sector has also been overly cautious and lacked the vision to influence government to implement change.

What can the private sector do to help the government drive change? Although there are no infallible recipes for success, there are a number of key principles private providers can follow to help the government make the NHS more sustainable:

• Be flexible and tailor solutions to fit specific local needs: one-size-fits-all, top-down approaches have proven to be unsuccessful time and again, with the National Programme for IT being a case in point
• Be in the driving seat of innovation: build capabilities to develop innovative, integrated care solutions rather than providing ingredients for the NHS
• Be willing to take more risks on outcomes
• Be realistically ambitious: start small, learn from mistakes and replicate success
• Be a partner, not a supplier: invest more time and effort in helping the government to transform the NHS, not just reactively, but responding to policy proposals.

Examples from around the world, where the private sector has been more assertive, show how effective a public-private partnership approach can be in reducing costs and achieving better outcomes. The Manises public-private partnership in Valencia, Spain, where a model of integrated care has been deployed is a good example – per capita funding is 25% lower than publicly run systems and clinical targets have been surpassed thanks to a combination of innovative approaches to care delivery (particularly keeping people out of hospital) and early interventions on prevention and diagnosis.

There are, of course, a number of principles that the government should also adhere to that will lead to innovative approaches to service delivery. For instance: investing in preventive care to avoid future costs; embedding technology into a locally integrated ecosystem to ensure patients are getting the right treatment, at the right time, in the right place; and, crucially, migrating to contracting on the basis of outcomes rather than inputs. These principles are easier to articulate than to implement, and the real challenge will be how to translate these objectives into action to deliver lasting change.

The journey will not be easy, but its success will be critical for the prosperity and wellbeing of the country. The time for providers to act is now.

Vivek Madan and Pedro Sanches are a partner and associate partner at OC&C Strategy Consultants, working with care providers, support services players and investors in healthcare in the UK and across the world.

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