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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Kelly Close: State Of Diabetes Treatment, Companies In The Sector And Challenges Patients Face

As president and founder of Close Concerns, a healthcare information firm focused on diabetes and obesity, Kelly Close says her passion comes from her extensive professional work as well as her personal experience, contracting Type 1 diabetes 25 years ago. Prior to starting Close Concerns, she worked in the financial sector, including stints as an analyst at Goldman Sachs, as an equity research analyst covering medical technology at Merrill Lynch, and as a management consultant at McKinsey & Co., where a majority of her work focused on for-profit and nonprofit healthcare organizations. Ms. Close and her colleagues at Close Concerns attend more than 40 scientific, regulatory and economic conferences around the world focused on diabetes and obesity, analyze key medical literature, and cover more than 50 private and public companies and nonprofit organizations. Recognized as an expert on the diabetes and obesity markets, and as a frequent speaker on the public health implications of these conditions, Ms. Close is a tireless advocate for patients. In this interview Ms. Close discusses the state of the industry and challenges that patients face.

Can you describe your mission?

It's to make everyone - researchers, clinicians, scientists, companies, and patients - smarter about diabetes and obesity in order to improve patient outcomes. Our team studies new research, and we synthesize news and insights on therapies and technologies on diabetes and obesity.

Why diabetes and obesity?

I have a deep personal interest in diabetes, so my goal once on Wall Street was always to narrow my focus from writing about medical technology (and helping biotech and pharma analysts) to working on all parts of diabetes, in a way you can't do as an analyst. In other words, I wanted to work on medical devices, pharmaceuticals and biotech all at once. Then, there's obesity. Well, the association between obesity and Type 2 diabetes has long been recognized. You can't separate the two; they are inextricably linked. Cases of diabetes have risen nearly tenfold since I was diagnosed in 1986. There were about 30 million people globally with diabetes then. Today there are 30 million in the US alone, with nearly 400 million globally, with much of the trend due to the increasing prevalence of risk factors, including obesity. And around 80% of Type 2 diabetics are either overweight or obese.

Tell me a little about your information services.

Our first publication in 2003 was Diabetes Close Up, where we simply updated news about different companies and conferences that we attended. In 2007, we started Closer Look, which goes out several times a week - sometimes daily - and the two publications now keep researchers and members of the industry abreast of scientific breakthroughs. Our online newsletter, diaTribe, began in 2005 as a free service, with the goal of keeping patients up-to-date on the latest research, products, and advice from the diabetes scientific community. And through dQ&A, our sister company that we started in 2009, we offer corporate clients market research and consulting services.

When I began Close Concerns, 18 million Americans had diabetes, and the sector had $14-billion in revenue. Today, in 2013, the industry has expanded to more than $40-billion, and there's widespread agreement that diabetes and obesity have turned into global epidemics that cannot be sustained. We absolutely must change diabetes management to make sure patient treatment, therapy and advice are optimized from the time of diagnosis throughout the entire spectrum of the condition.

What are some of the challenges you see today?

It's never been a more challenging time in terms of reimbursement and patient access to medicines and healthcare professionals. In much of the world, patients still don't have access to insulin or other medications. On the other hand, extensive progress has been made on the actual tools that are available. Access is so much more challenging, however, regardless of whether we are talking first world or third world. Doctors, for example, may reach a common diagnosis of diabetes, but the pressure they face with patients is prescribing the correct treatment, determining what patients will adhere to, and what insurance will cover. And that is patients with insurance. Medicare is missing the forest for the trees on some of its new reimbursement decisions in the U.S., and globally, patients certainly are not getting the treatment, therapy and advice they need to keep them healthy. Finally, there are major issues with patient advocacy - it must be much stronger, but lingering stigmas about this disease continue.

What about treatment challenges today?

The positives are that medications have improved dramatically and the technology exists to see which medications work and don't work. Today, the emphasis is on early, optimized treatments, given that nearly 50% of Type 2 diabetics are not at their glycemic target even here in the U.S. Because there are many more oral medications available before a patient is moved to insulin, the best healthcare providers no longer take a wait-and-see approach if a patient can't control their HbA1c (a three-month average measurement of glucose in the blood); they prescribe a new medication, often a combination of drugs. Another bonus of having many more drugs available today is that treatments can be customized for a patient, which is the promise of personalized medicine - again, this varies with access. Adherence is such a challenge that it will be great to move several medications to one - one pill and one co-pay for patients in the U.S. and, ideally, better adherence. Adherence studies have been very hard to do historically, and this is one of the biggest challenges ever. Historically, taking insulin has also been very challenging. We hope this will become easier all over the globe and that the stigma of taking insulin will begin to dissipate.

Can you talk about emerging trends in technology?

Absolutely. One really dispiriting area is that in the U.S., we see pricing pressure and reduced access to good technology. This is driven by CMS wanting to save money, and while it may sound good for patients, we worry that it winds up resulting in less product innovation, fewer funds going to R&D, less customer education and customer service, etc. We're seeing better insulin pumps coming out all the time, combined with continuous glucose monitoring. Monitors used to be inaccurate and unreliable, but the technology is much improved and readings from meters are getting closer to readings from actual blood tests. The data we've seen on the Dexcom (NASDAQ:DXCM) G4 Platinum, for example, is better than some glucose monitors. But lots of people still dose their insulin based on counting carbohydrates, and there are lots of reasons why scores can be incorrect.

What's the status of oral insulin?

I thought we'd never see it because there are so many challenges associated with it. But I'm much more optimistic than ever before. It's still very early stage, but Novo Nordisk (NYSE:NVO) is working on it, and that's a very positive sign. We're beginning to see positive data come out, and the flat truth is just that we need more alternatives to injected insulin. MannKind (NASDAQ:MNKD) and its inhaled insulin therapy, AFREZZA, has driven our optimism. It has taken a long time to get to a second-generation inhaled insulin that is practical, easy to use and effective, but the data, especially that on hypoglycemia, look good.

What are your thoughts on the potential of GLP-1?

This is the first new class of therapeutics to come to market that doesn't cause hypoglycemia and doesn't cause weight gain. That's awesome because insulin has had all of those problems. Novo Nordisk's GLP-1 reached $1 billion in sales a year before the company expected - again, this has been easier for patients to take and provides a valuable step between traditional orals and insulin. What's really compelling in combination therapy is the potential for GLP-1 plus insulin. SGLT2 inhibitors are also interesting - we'll definitely see fixed-dose combinations here too, eventually. Earlier this year, the FDA approved Johnson & Johnson's (NYSE:JNJ) SGLT2 inhibitor, Invokana, which has efficacy closer to GLP-1 and, judging by the early data, a safety profile closer to DPP-4 inhibitors, which have the best side-effect profile of all. We'll see - we'll be eager to watch the emerging data.

Have you seen any interesting new data in GLP-1 research?

Transition Therapeutics (NASDAQ:TTHI; TSX:TTH) announced some really exciting data in the summer for TT401, which targets GLP-1 and glucagon receptors for obese diabetic patients and may provide clinical effects superior to those of GLP-1 agonists. (BT note: the proof-of-concept data prompted partner Eli Lilly (NYSE:LLY) to acquire an option on the drug candidate to complete clinical development.) We're also really looking forward to seeing more data on iDegLira, which is the combination of next-generation insulin degludec, which the FDA recently delayed, surprisingly, and on Victoza, from Novo Nordisk. BMS/AZ is also working on a Bydureon pen as well as a once-monthly formulation, and Intarcia is working on implantable GLP-1. There's no doubt this class will continue to grow as the applications become even easier and as the efficacy and safety data continue to grow.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)

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Discussion roundup: Moving from the NHS to the voluntary sector

The voluntary sector can provide a wealth of opportunities for those who have worked in the NHS. Photograph: Gary Roebuck/Alamy

Joop Tanis, independent consultant in innovation and entrepreneurship in health and social care: "There is a great opportunity for NHS clinicians and managers to organise themselves into co-operatives or social enterprises. This provides diversity of options for commissioners, and the opportunity to deliver the services you are passionate about in a way that is less constrained by the big NHS apparatus."

Neil Hogan, team leader and recruiter for Charity People: "Areas of opportunity that I've come across for healthcare professionals include policy, service delivery, leadership, campaigning, commissioning and bid tendering."

John Illingworth, policy manager at the Health Foundation: "We employ a wide range of people - project managers, research managers, communications, policy and corporate services professionals. In other words, roles and skills that you would find in a range of healthcare organisations."

James McHugh, responsible for research and policy at Skills - Third Sector: "In addition to the opportunity for NHS professionals to spin out into co-operative or mutual structures, there are also many opportunities for healthcare professionals to work in the existing third sector. Over half of the third sector's 800,000 paid employees work in health and social care. There are also around 37,000 organisations in the UK third sector which are active in this area. Much of this employment growth has been as a result of increased commissioning of such services from third sector organisations."

Neil Matthewman, chief executive of Community Integrated Care: "The voluntary sector, I have found, can offer greater freedom from bureaucracy and the opportunity to develop more influential relationships, raising the profile of our charity, influencing organisational development and directly improving the quality of the support that we are able to offer."

Steve Hindle, programme lead, Macmillan Cancer Support: "The ability to work for organisations such as Macmillan offers far greater scope and flexibility than many will have enjoyed in the NHS, as well as the satisfaction of making a difference, potentially at a national level."

Neil Matthewman: "In the third sector, we don't have this same level of restriction/support [as in the NHS]. So, organisational development can be lead by your own personal experience and skills. I have been able to influence the strategic direction of Community Integrated Care in a way that I couldn't directly do when working in the NHS and have been able to develop strong partnerships with other organisations as a result personal initiative. This has been refreshing and exciting."

Neil Matthewman: "As a financial consideration, leaving the NHS Pension Scheme is a potential challenge for some people. From my personal experience, this has been a barrier to some people joining the third-sector. I found that leaving my existing well-established professional networks was also slightly daunting."

Claire Westall, Macmillan Cancer Support: "Things move more quickly and decisions are made faster so I think that can be a significant culture shock sometimes. People may find they have a unique level of responsibility and ownership in the third sector, that didn't exist in the NHS, and this can be challenging at first."

James McHugh: "There are also a higher proportion of temporary roles in the third sector (around one in ten of all jobs) and the funding streams may seem more precarious in the third sector."

Joop Tanis: "I was surprised by the sense of empowerment and the ability to make decisions and actions quickly, but also the need to focus on delivering outcomes and milestones, which in my experience was much more 'immediate' than it felt in the public sector. However transferable to core skills - and they often are - the approach and culture is very different."

Neil Matthewman: "I was struck by the lack of external influencers when I moved to the third sector, other than organisations like the Charity Commission or CQC. In the NHS, we had milestones, world class commissioning etc. which heavily guided organisation development. This was a bit scary at first but liberating in many other ways, as it relies on you, as an individual leader, to take the organisation forward, based upon your knowledge and experience."

Joop Tanis: "While my managerial responsibility (budget, headcount etc) was much greater in the NHS, my ability to do things and have an impact was greater outside."

Steve Hindle: "I think a further difference for people moving from the NHS may be the way that the voluntary sector can work with the media to highlight awareness of issues and spread innovative solutions."

John Illingworth: "I think people moving from the NHS feel a certain degree of liberation, from daily fire-fighting to championing good causes in order to deliver real improvements for people."

Steve Hindle: "What I've found during my time at Macmillan is that colleagues who have recently left the NHS are invaluable for their expertise, often based on decades of experience, and their understanding of the way current issues are impacting on outcomes."

James McHugh: "From a third sector perspective some of the skills/expertise around commissioning, service design, people management, governance, monitoring and evaluation, and partnership work are immensely valuable."

Joop Tanis: "Apart from the obvious clinical or service skills, [healthcare professionals] have an in-depth knowledge of the current services, standards and decision making processes. They often understand commissioning."

Steve Hindle: "There are a range of skills that can transfer into the voluntary sector - speaking for my survivorship team, I have people with combinations of clinical expertise, service development and service redesign expertise, commissioning skills, policy work, project/programme management, user involvement and negotiating and influencing skills."

Neil Matthewman: "At a senior level you need an ability to lead people strategically and to set the direction for the organisation. The ability to hold people to account is also important. From a personal perspective, understanding commerciality is also particularly important."

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Public sector contracts: the good, bad and ugly – from healthcare to rail

If the purpose of a hospital cleaning contract is to reduce infection, why not let a contract to reduce infection? Photograph: Nigel Hillier/UNP

The specification for Merseyside Waste and Recycling Authority's (MWRA) proposed £1bn contract, which could see Merseyside waste transported to the north-east of England for processing, may have been what MWRA believed was needed, but failed to reflect what local people, those who pay MWRA's bills, wanted.

Had the contract been let to the losing bidder, energy-from-waste company Covanta, which was hoping to develop the country's biggest eco-waste plant in a joint initiative with Peel Environmental, it would have resulted in £500m of investment in the north west and the creation of 600 construction and 100 operational jobs.

What has this to do with hospital cleaning? All hospitals let cleaning contracts, and specifications usually require so many cleans per day of toilets and floors. But such contacts are expensive, so why let them? 12 cleans per day of the toilets (only two cleans at one hospital I visited recently) does not guarantee cleanliness and hygiene. At two relevant conferences, delegates agreed that the purpose was to reduce infection and to make the environment more pleasant.

If the purpose of the contracts is to reduce infection – which at worst can kill people and can cause wards to be shut down, delay operations, create much inconvenience and huge expense – then why not let contracts to minimise infection? This would allow for innovation and all-round attempts to improve hygiene. People might be compelled to wash after using the toilets, to use the alcohol cleansers regularly, to disinfect shoes on entry to the hospital, as happened near farms to prevent the spread of foot and mouth disease in 2000. Nurses might have to change into hospital-sterilised outfits rather than use them travelling between home and hospital. A key contract performance measure could be the number of infections.

So why doesn't it happen? Residents and hospital chief executives would no doubt have infection control high on their list of objectives, but this does not seem to have been passed down to operational staff – budget holders and on to procurement personnel. In an example of Chinese whispers, the outcome is cleaning contracts.

Virgin won its appeal against the award of the West Coast rail franchise. However, much of the concern in the North West was the suspicion that the proposed contract was more about trying to raise income for the Treasury rather than about customer service and supporting economic development. The existing contractor, Virgin, was perceived to be providing a good service. I don't recall any consultation with people who live along the route and use the line about what they expected from the service. Let us hope for effective consultation before the specification and evaluation criteria for the re-tendering are determined.

What is the lesson in all this? Those letting public sector contracts need to be clear about the purpose of the contract and make sure the specification is aligned to that purpose. Repeating an old formula may not deliver what is needed. They also need to be clear about who are the stakeholders and ensure that their views are properly reflected in the specifications and evaluation criteria. There are no prizes for buying the wrong things well.

Colin Cram is contributing editor to the Public Leaders Network

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