Health Service Focus

Capital investment critical to help weather the storm

Writing on behalf of NHS Providers, Peter Ward, director of healthcare projects at John Laing, explains why trusts need a new approach to get the best value from their assets.

Our NHS providers are sailing into a perfect storm. Increasing volume and complexity of demand has not been matched by the money available, and there has been almost no capital investment over the last decade. After long careers, some of our most experienced leaders have left the bridge, taking with them knowledge gleaned from previous economic cycles. And as if that weren’t enough, parts of the health and social care system that have helped manage demand in the past have stopped working or can’t keep pace, and the supply of professional staff is diminishing even if the money is available to recruit them. 

Despite the gloomy outlook, there are flickers of light. One is the storm itself: the government recognises the need for change, and is concerned that it won’t happen at the necessary scale and pace. The second is historically low borrowing rates, and a wall of institutional funding seeking sustainable investment in infrastructure that could help transform the way services are delivered.  The third is that the status quo is not giving patients the best quality of care, even if it is outstanding in parts. If providers can use this goodwill and good credit to focus on improving care quality, they will garner public support for measures to join up fragmented services that will ultimately cost less. 

As William Edwards Denning, who led the reconstruction of the Japanese economy following World War Two, said: “Innovation comes from the producer – not from the customer”.  As the ‘producers’, our providers will need to prepare by: 

• Acknowledging that things can’t continue as they are, and taking a system-wide view of the need for change
• Building a culture of innovation and support for change amongst staff and partner organisations
• Taking specific, visible and immediate measures to invest in people and services, to demonstrate that change is actually happening 

Infrastructure investment 

Physical infrastructure – whether it is new buildings, IT systems or equipment – can help transform the way staff work and care for patients, and make clear that things will be different in future. 

For example, the central and systematic management of resources to maximise throughput is often used in airports, power networks and in other complex logistical environments. In our hospitals it is often managed in a much more ad hoc and piecemeal way. It doesn’t have to be this way: investment in real-time asset tracking has transformed the way hospitals manage patient flow and use medical equipment and staff resources in US hospitals over the last decade.  

As well as investing to improve productivity, trusts will also need to get the best value from their assets. In the past, one common response to a financial shortfall has been the sale of land or other assets for non-recurrent capital. The effect of that approach is to lose control of assets that could help solve operational problems, and, of course, it can only be done once. Rather than selling land, trusts could use partnerships to develop extra care and key worker housing which they let at affordable rents to help solve problems with delayed transfers of care and staff retention, and generate revenue income in the process. Alternatively, they could develop facilities that complement their services and create revenue income such as hotels, rehabilitation centres, diagnostic facilities or care homes operated by their partners or third parties. 

Three key factors, then, will improve the chances of success in sustainably transforming our NHS: 

• Be brave: We should be ambitious in our thinking, practical in our objectives, clear in our measures of success and ready to implement ideas quickly, to avoid ‘project fatigue’ amongst our staff, partners and investors
• Believe in ourselves: Providers know the kind of partners they need to deliver transformational change. To deliver this change we should maintain faith in our own knowledge, expertise and systems of governance, rather than always falling back on a culture of exhaustive consultation with government and other national stakeholders
• Trust our partners: Once they are on board, we should trust our partners for the duration of a programme of projects rather than taking a ‘transactional’ approach to each one. In that way, we will incentivise them to clearly understand and adapt to our needs, keep project overheads to a minimum and encourage them to innovate alongside us, and work collaboratively to solve problems when things go wrong 

There is hope that providers will weather this storm, but they must acknowledge the forecast, be brave and equip themselves with the best help they can find.

Have you got a story to tell? Would you like to become an NHE columnist? If so, click here.