Turning the NHS Global
Filed Under (Innovation) by Paul on 03-09-2012
Apart from the Olympics (about which I will offer my own two penn’orth later this week) one of the more interesting NHS stories in August was the attempt, yet again, to create an organisation that would help to sell NHS practice abroad. This year’s version of what is a regularly occurring story, saw the advertisement of a senior post to try and organise this international sales pitch for the NHS.
For me there were two points of interest – how some supporters of the NHS reacted to the announcement and why – since this initiative is regularly announced – it doesn’t seem to work very well.
Some NHS supporters reacted against this announcement. The Patient Association seems to believe that any minute spent away from the bedside of NHS patients by those it employs increases the pain and distress of all its patients. For them the 1.4 million NHS staff should be committed only to helping patients and, given they have a limited amount of time, trying to sell any aspect of the NHS abroad would limit their time with those patients. We cannot – so the argument appears to go – spare an hour of time to build NHS activities in the rest of the world without in some way letting down NHS patients.
In a summer defined by international Olympic experiences this is a rather sad and “Little Englander” view of one of our major institutions. At the moment millions of NHS staff hours are spent on issues such as research into diseases, their remedies and the organisation of health services. Some of the aims of this research are within disease patterns, remedies and their organisation that are confined to England, but nearly all of it reflects world concerns. Indeed some of it is carried out in diseases and their remedies that are barely the concerns of either England or the NHS.
But taken as a whole this research is a vital part of the way in which the NHS contributes to the world and only a very few people begrudge the time and effort NHS staff spend on world issues. Whilst we gain a great deal from other nations and their health services’ research, we almost certainly contribute more than our fair share to those developments. It’s a good thing – and by and large nobody is looking at the national profit and loss account in a grudging way.
But it is that mention of profit and loss that is the problem that some NHS supporters have with the whole idea of selling it abroad. It is the notion of selling per se that is the problem for some. Selling NHS services in this country, selling them abroad.
This brings us back to the difficulty that some NHS supporters have with the very idea of a business venture being built out of an organisation which has collective, tax funded provision – free at the point of need – at its core. Given that we don’t sell NHS services to patients in this country; to suggest that we can sell them to non-NHS patients abroad worries some people a lot. They believe that the NHS principle of providing healthcare to patients – free at the point of need – in Accrington would in some way be compromised if we were to charge for those services in Abu Dhabi.
Given time during a month off I was thinking through what separated me from this worry. It comes back to my belief that the NHS is a big strong institution based upon big powerful history and principles (thank you Danny Boyle for your Olympic opening ceremony). One that can stand up for itself in the field of history.
For others the NHS seems to be a delicate flower that needs to be kept safe and separate from all other health services and sets of principles because if it were to come in to contact with them it might somehow become infected and die.
Obviously this debate goes beyond the idea of this international venture to some of the discussions of the last two years as to whether the NHS can learn and take some ideas from other systems to improve the development of NHS principles in England.
For me involvement and interaction with other systems is a good thing because it demonstrates our strength, but for others – who believe in the same NHS – there is anxiety about whether contact with ideas from other countries or NHS ventures abroad, will cause it to keel over and die.
So I welcome this initiative but worry for its success. And my worry comes from this same problem of how do you sell the NHS? I don’t have problem with the principle, but I do worry for the practice.
Over the last couple of years the problems for the wider economy have clearly become problems for the NHS. The economy has stalled. As a small country off the coast of Europe we depend upon trading success to create the economy that will provide resources for the NHS. We need to be good at creating and selling things. (Again thank you Danny Boyle for the opening and closing Olympic ceremonies which showed how creative we are and how much the world loves to buy our creations).
One of our major industries at the moment is the NHS. We spend about 8% of GDP on it and both as an organisation and a set of practices it generates some interest in the rest of the world. We could, as a nation, say that this is not an industry like others, it cannot be exported in the way that music or culture can. If this is the case the NHS has to become a part of the deadweight of our economy, something that cannot gain resources from abroad but must just spend money here.
Other countries disagree with this. Many are interested not only in buying the day to day practices of the NHS, but are even more interested in buying aspects of the organisation of those services. For example our primary care system is an important part of the NHS. Whilst it is very unlikely that it could ever be simply lifted from here and applied to an emerging economy, the application of a free universal primary care system could be very very useful to a number of nations and they will want to buy aspects of the NHS to make this happen.
But in the past the problem has been that when the NHS has tried to organise these sets of commercial relationships centrally, it has learned the wrong lessons from NHS structure. It has tried to use the old model of ‘top down’ bureaucracy which stifles the very individual innovations that it is trying to facilitate.
Therefore most of these NHS international initiatives fail because they take from the NHS the one thing that nobody wants to replicate – a central neurotic bureaucracy which is anxious about entrepreneurship and ‘difference’ – and which tries to organise the life out of any possible international organic relationships that might make them work.
Our economy – and our NHS – need this initiative to succeed.
I believe Moorfields has a successful offshoot in Abu Dabhi: has anyone (political)looked at the business model there?
Just because a highly specialised hospital has a successful business model for establishing an overseas branch, it does not follow that *all* NHS hospitals could do the same..
Of course the BBC has been using the model of selling products and services in foreign markets while still providing a certain amount of “free” content (e.g. the World Service) for several years. It’s a workable model that massively increases value to the UK tax/licence payer.
I am not sure that you really have given a reason why we should “sell the NHS abroad”, you’ve just said that you are happy with the concept, and that is it.
Well I am not happy with the concept, not for the PA reasons, but for the reasons of “culture”: an NHS that is happy to take be part of the international healthcare market, a market well-known for over-testing and over-treating (because, well, that is how you make profits) would be happy to do the same thing here.
Anyway, I am not sure it makes business sense. Last year, Monitor figures show that for the 144 Foundation Trusts the surplus (for the purpose of this discussion, let’s call it a profit) was £614m out of an income of £35.8bn. In almost every other business a profit that tiny would not be considered a good business to invest in. Of course, the NHS is not-for-profit, but then we have the problem of how these FTs will afford the capital to build a foreign hospital? They will not be allowed to use that £614m because that is supposed to be re-invested in NHS care.
We are told that the investment can only use the private patient income of an FT. Unfortunately Monitor appear to no longer give the aggregated Private Patient Income, but in general it is about 1% of income, but I am not sure how much of that will be profit. Taking Moorfields as an example (since that is what the Press have done) last year Moorfields Dubai had an income of £4.3m and a profit of £260k. Again, a tiny profit margin. If profit on private patient income is less than 1% then that will mean that all FTs in total will have a “profit” of less than 1% of 1% of £36bn, say a few million.
Moorfield’s £260k will not buy you much of a hospital in a foreign market. Of course, we are told that the whole point of Moorfields Dubai is to make a profit that can be re-invested in the NHS in the UK, so again, if that profit has to pay for eye operations in London, where will Moorfields get the money to build the next clinic in their global business? A bank loan? Sure, with PFI grumbling on, are you sure that a trust can justify taking out a loan on foreign property? (The only solution I can see is if there is a joint venture, basically putting the NHS brand on a hospital run by an organisation like HCA.)
Incidentally, Moorfields Board papers are interesting, they say that they have problems employing nurses in Dubai because of an aversion to working for what they regard as being “private healthcare”. Amazing, isn’t it, that the NHS has the reputation in the UK of being altruistic, free-at-the-point-of-need and in Dubai it is seen as being yet another predatory private company making money from people’s ill health.
So I am not convinced that NHS Global will be anything other than tiny boutique clinics for the super-rich in Arab countries. The danger is that the ethos (if that is the right word) of private healthcare will leach back, capillary-fashion into the NHS in England. That’s what worries me.
Richard, you mention that aggregate PPI (for FTs) is around 1% of income and present this as an obstacle. Coincidentally the vast majority of FTs have a PPI cap of around 1% or less because of the arbritrary system where their PPI in 2002-03 determined their cap. Perhaps one of the reasons previous initiatives have failed to take off is that many FTs couldn’t take part while those that did have a higher cap were already operating close to their cap as a result of pre-existing activities.
With respect to Moorfields Dubai, the venture is still in the early stages. The board papers explain that there is a long term plan to scale the venture up into a healthy, sustainable subsidiary. Only a short-termist would look at the current profit margin and write it off.
If you look at Moorfields’ other two commercial divisions, Moorfields Private and Moorfields Pharmaceutical, they recorded surplus margins of 20% and 10% respectively for an overall margin of 14% across Moorfields commercial activities and accounting for two-thirds of the surplus created Moorfields FT, which is a very healthy position compared to most other Foundation Trusts. Hence how Moorfields were able to fund the Dubai expansion without using NHS funds.
The fault in the logic of “the profit is supposed to pay for NHS operations so how will they fund expansion” is that you assume the NHS is best served by using that surplus for current expenditure rather than compounding it by investing it in capital projects again to generate larger surpluses in the future. The latter may be a particularly good idea if you believe you will need more income down the line – much like Growth and Income strategies. If the NHS used the same logic it’d never invest in new facilities that only benefit patients a couple of years down the line.
Incidentally, the only mention I can find in the board papers of issues employing nurses in Dubai is in the July 2009 minutes of the Membership Council. It is stated that it is impossible to recruit Emiratee nurses. You imply that this is down to some philosophical objection to working for private healthcare when the reality is that the private sector simply can’t compete with the pay offered by the Emirate – a cold financial decision by local nurses to put their own interests first (an entirely understandable stance). Certainly there is no apparent perception of “predatory money-making” in the Emirate.
Which brings us to the idea that this will somehow undermine the culture of the NHS here. The main flaw I see here is what some presume that culture to be at present. For example, Paul, you said “Given that we don’t sell NHS services to patients in this country; to suggest that we can sell them to non-NHS patients abroad worries some people a lot”. The error those supporters maker is to ignore that we already DO sell NHS services in Britain. We sell them to overseas patients who come to Britain and in non-emergency cases we often make them pay in advance too – no payment, no treatment. This is within the NHS itself, not just the private wings of NHS hospitals. And yet the NHS copes with this; it copes with treating these patients side by side with British patients.
Funnily enough nobody (well, except Nick Griffin perhaps) ever suggests that we should stop GOSH from treating patients from around the world for a tidy fee. So the concept of the NHS being an export industry is long established. Perhaps this is why you don’t fear particularly uncomfortable with the concept, Paul.
So the challenge is how do we turn it into an export industry not just at home but also overseas – after all there is no guarantee that a tiny proportion of potential patients will continue to trek all the way to Britain for treatment. Like you, Paul, I have concerns about success in practice.
I think the first problem is that we concentrate too much on the ‘NHS brand’ aspect; we are liable to overstate its importance abroad. Yes, it might work in a few places, but in some parts of the world, ‘NHS’ represents the worst parts of our system, and elsewhere it can be entirely meaningless. We would be better concentrating on individual brands as well as our reputation for innovation, research and training. Reputations that often predate the NHS itself.
Consider this: when a foreign patient comes to the UK for treatment, are they coming for the NHS or are they coming because of the reputation for expertise and quality of a specific doctor, department or hospital? We have some of the most famous hospitals in the world – Moorfields, Royal Marsden, GOSH, the list goes on. Even other NHS trusts recognise this – seeking branches of the major specialty hospitals rather than trying to establish their specialty departments from scratch. That’s what we should try to capitalise on. It’s also why, as you say, Paul, centrally managing the process may not work.
There probably isn’t huge scope for selling the concept of a ‘NHS’ system abroad. There is a model in Royal Mail who have an international consultancy (British Postal Consultancy Service) that sells advice and other services abroad. But for Royal Mail their international crown jewel is GLS, their international parcel and logistics arm. Some “Little Englander” politicians once suggested it should be sold off whereas the company is very clear that GLS is crucial to funding their Universal Service Obligation in the future. We live in a global economy now and we cannot ignore that.
Back to healthcare, I think its a shame our medical training doesn’t have quite as high a profile as it once did – partly because of limits on the number of students the NHS can train. Our universities are already very active in selling British Higher Education abroad – not only bringing foreign students here but setting up international campuses too. All of which count as exports. So we should try to find a way to make the restore the opportunities for our medical schools to educate the world. We should also continue to encourage the Royal Colleges to export their qualification systems too. We shouldn’t be looking at the NHS in isolation but at how the entire healthcare sector (public, private, academicc) can contribute to our economy.
And finally, Richard asked for arguments for why we should sell the NHS abroad. I think the financial and economic arguments are already made but we shouldn’t ignore the other benefits it brings to the UK such as research. One of the reasons Moorfields chose to open in Dubai was because it is “an environment where over a long period of history quite a lot of inter marriage has gone on within the same family groups and this yields important research data for determining any linkages between gene lines and any hereditary diseases.” Such research will not only enable British institutes to develop new treatments that we can sell abroad, they can also help NHS patients at home.
Lewis, you still have not convinced me that there is an economic argument. I am a governor at a DGH FT, we are efficient and we make a surplus. However, we have a lot of improvements to make, and we will never stop having a list of improvements to make. We do not treat private patients. Why? Because it would be far too much of a distraction – don’t you think our talented managerial and clinical staff should be devoting their time to improving our NHS care? (And anyway, the hospital car park is not large enough for the NHS patients we have, do you think private patients would want to arrive for clinic appointments on the bus, like I do?) The investment required to treat private patients is far too high and the profit returned far too low. The core business – that the trust does well – is treating NHS patients. Private patients are leprechaun gold, and foreign ventures are leprechaun diamonds: completely out of our reach.
DGH’s will not be able to benefit from selling the NHS brand abroad. But isn’t the NHS brand theirs too? I would argue that DGH’s are far more “the NHS” than the big teaching hospitals, and it is the local hospital that the public think about when they think of the NHS. But even if we achieve the leprechaun gold that is selling the brand abroad, DGH’s in a fragmented system of independent FTs will not benefit from that. And neither will their patients. So you are suggesting that we have an unfair system where only those with the resources – the large teaching hospitals – can have the benefits you describe?
You mention research, and I read that too in the Moorfields document you quote. I would like to understand why this research can only be carried out through a commercial venture. Indeed, it seems odd to me that private patients (people who have *paid* for their treatment) will agree to be experimented on. If such research will benefit their citizens then why doesn’t Dubai fund the research? (Or, indeed, if NHS patients will benefit, why doesn’t Moorfields apply to the medical research funding authorities in the UK?) I think the research argument is a red herring. I have experience of research and applying for grants (admittedly, in the physical sciences) and the model of “we have to build up a commercial enterprise so that we can do our research” seems bizarre. It is the thinking of a businessman, justifying their business, not that of a researcher.
As to the hoards of foreign patients. Well you seem to avoid the lesson of GOSH. The PPI cap applies *only* to FTs. NHS Trusts can do as much private work as they wish (that is the case with GOSH). Also, what about all of those private hospitals from GHG, Circle, Spire etc, they can have as many foreign patients as they can stuff into their hospitals. There are *no* restrictions on the numbers of foreign patients that can be treated here. But foreign patients do not come here in large numbers. A recent report by Deloitte says that there are 6 million Americans who are “healthcare tourists”. They go mainly to India, and South East Asia. They don’t come here. Why not? If the private sector were truly entrepreneurial they could combine a hip replacement with tickets to a West End show, or a tour of Stratford-on-Avon. We speak the same language as the Americans and have a similar culture, so why are there so few Americans willing to come here for far cheaper healthcare than they can get at home? It seems to me that if we cannot make money from the lucrative US healthcare tourism market, we will not be able to make money from the far harder business of overseas clinics.
For clarity, the economic argument would be the benefit to the wider economy of increased exports, improved Balance of Payments, etc – something the economy is in dire need of. I would regard the narrower benefit to the public sector, the NHS as whole or individual trusts as a financial argument (which I think is what you think the economic argument is about). The NHS cannot take an insular approach and ignore the former – in the same way the NHS cannot go assuming its budget will rise regardless of the state of overall economy.
While your DGH may not have a private unit, treat UK private patients or attract overseas patients, are you really sure they don’t treat any non-NHS patients at all? No charging motor insurance companies for injuries sustained in road accidents? No non-ordinarily resident patients or patients from the EEA without a valid EHIC at all? The NHS is supposed to charge them for treatment, including emergency treatment that takes place other than in an A&E, as they are not covered by the UK taxpayer – the NHS isn’t free at the point of need for many of them. That has always been the case and the NHS doesn’t seem to have suffered for that? The alternate is to not provide treatment at all to non-NHS patients or for the UK taxpayer to cough up, which reduces the funding available for NHS patients (no Treasury ever gives you more money when this happens).
You think it’s unfair that some hospitals benefit and others won’t. Should we abandon Major Trauma Centres because they’re unfair on smaller hospitals even though the latter are unsafe? Is it unfair that we have medical treatments that work for some patients and not for others? Should we stop using Pencillin altogether or develop alternatives for those who suffer adverse reactions? We shouldn’t be making decisions based on what’s fair for hospitals; they should be based on what’s good for patients.
You’re still in the mindset of “NHS brand” – what business is it of your DGH if GOSH or Royal Marsden exploit their own reputations? Worse, it seems you (like many) think it means National Hospital Service: it doesn’t, it means National HEALTH Service. We have too many patients who have to be treated in secondary care who should really be in primary care, tertiary care or especially social care.
The reality is that DGHs will be less important in the future than they were in the past as we move towards better care in the community – including bringing clinics to the patient, not the patient to the clinic, regional specialty departments and far greater integration of health care and social care. Not only can these approaches be cheaper than a secondary care bed, they can deliver better quality for patients too. With earlier intervention helping to prevent diseases in the first place and enabling patients to recover quicker, the wider benefits to the economy are even greater. Change will come – it has to if we are to cope with an aging population with long term conditions. So again, policy shouldn’t be determined by what’s fair to an endangered model of District General Hospitals.
I don’t think you understand how this research works. Nobody is being experimented on here. What the researchers are getting is anonymised data to which they can apply statistical analysis to identify possible linkages between diseases and genetics. These linkages can then be tested in the laboratory to understand how they work and hence how they could potentially be exploited to create treatments. This is very, very early stage stuff compared to the MHRA-supervised clinical trials you seem to be thinking of.
From a research perspective, you have a population in Dubai (and surrounding Gulf States) that is not only different to the general UK or even Western population but also one that experiences higher rates of recessive genetic disorders and related health problems, potentially linked to degree of inbreeding in the area. By comparing the differences within that population and also with other populations you can narrow down the factors that may explain why some people suffer from a disease and others don’t. This is data that simply isn’t available on a large scale in Britain. Without the clinic in Dubai, this data doesn’t exist. Meanwhile the Emirrate of Dubai lacks the expertise to use the data. So a collaboratively approach makes sense – they supply the patients and get the treatment, we supply the expertise and get the money and data.
Why a commercial venture? The NHS isn’t going to fund this and a charity for wealthy arabs doesn’t really sit very well either does it. But the biggest single reason is simply killing two birds with one stone: you’re exporting, you’re bringing money into the UK and you’re getting a data source you wouldn’t otherwise have access to. You can then use to develop treatments here for the NHS and sell them abroad (which is definitely a commercial activity).
It’s not so different to a doctor that specialises in rare diseases. They need a certain number of cases to develop their expertise but they may simply not be enough people with the disease in the UK. It makes then to find other patients around the world and bring them to the UK for treatment or even go to them. The NHS will never fund these treatments – it gets paid by the patient or their government – but everyone benefits – the patient gets better and we get a doctor with more experience. It’s the extremes where the benefits are often the greatest. We shouldn’t throw that away because it doesn’t fit with the humdrum world of the DGH.
And on the subject of research, Paul, you stated nobody looks at the national profit and loss when considering research into issues that barely concern the UK. Perhaps we should. There are enormous potential economic benefits for the UK of research into solving third world problems (and development aid for that matter). Eradicating malaria, improving sanitation and reducing infant mortality will help limit population growth, drive economic growth and deliver demographic dividends. That leads to new markets for us to trade with and developments we can import into the UK. The trouble is that many people who normally support this kind of research and aid are themselves too myopic and parochial to recognise the (very) long term benefits for the United Kingdom.
GOSH became a NHS FT earlier this year – partly because of the plans to raise (if not remove) the PPI cap. Their current cap is just under 10%, which they’re already pretty close to. The ironic situation where NHS Trusts were unlimited while NHS FTs were capped simply demonstrates what happens when you let idiotic politicians make bad, short-sighted law. The cap was set to become increasingly problematic considering that the NHS budget will be static at best for the foreseeable future, potentially forcing FTs to curtail private work too (perhaps the staff should consider that said private work could help them keep their jobs and even avoid the pay freezes but it seems some would rather the NHS suffered a double whammy).
Funnily enough GHG (and HCA) are actually international hospital groups that expanded into the UK. Of course, our private sector healthcare companies are at disadvantage compared to their German competitors who have the stability and scale of their role in national healthcare, which is probably why our healthcare tourism market is only worth a couple of hundred million at present while Germany’s is worth several billion Euros.
The Deloitte report you cite is 5 years old now and the 6 million figure was a pre-recession best case. It actually answers your question: US outbound healthcare tourists are significantly more likely to be Asian/recent immigrants; they go to countries that meet US standards (which they’re most familiar with); they go to countries where US hospitals have set up branches; and above, the countries you mention have actively positioned themselves as destinations for medical tourism, encouraging patients to come to them. Outside of VisitLondon, hardly anyone does that in the UK.
The US market is a poor example. It is a mature market, dominated by well established players (US healthcare firms that expanded abroad) and one where they expect you to meet their standards (Moorfields Dubai have sought US accreditation in addition to their UK and Dubai accreditation) . It is also fairly small in the great scheme of things. In any event bringing tourists here misses the point.
The real opportunities lie in emerging economies – the Gulf States, Eastern Europe, Brazil, Russia, India, China to name a few. They are the future and they’re still growing at a furious pace. Their healthcare systems are underdeveloped while their increasingly middle and high income populations expect better. Unlike the States they’re prepared to accept UK excellence. They’re the ones who will welcome branches from international hospitals, just like they’ve welcomed international university campuses, and the more specialised the greater the opportunities. With advances in telemedicine, we soon won’t even have to send doctors in person – we could even subsidise the technology for linking national and regional centres with local patients by using it to treat patients on the other side of the world.
If the NHS is to ensure that it can continue providing world class care free at the point of need to NHS patients, it is going to have to broaden its horizons, change the way it works and take some risks. Otherwise it will collapse under the weight of our aging, less healthy population. The same is true of the UK as a whole – adapt or die.