All aboard for NHS exports?

As hard as it is to believe for many people living in the UK, the NHS is held in very high regard in parts of the rest of the world. While the service is subject to constant scrutiny and criticism by politicians, the public and the press almost daily in this country, abroad it is seen quite differently. 

In other countries, reverence may be found for the NHS’s ability to deliver high quality care across a large population, its development of world class professionals and a demonstrable expertise in conducting excellent research.  

‘The last thing the NHS needs, it could be argued, is giddy minds busied by enterprises in foreign countries’

A significant number of healthcare policy and clinical leaders in the world were trained or have worked in the NHS and for them it remains an inspiration. It even has respect in the US, where many are very sceptical about “socialised medicine”. The New England of Journal of Medicine, for example, said in 2009 the NHS offered the Obama administration “important and relevant lessons”.

There is without question a great love for some NHS brands, with huge appreciation from across the globe for institutions such as Guy’s and St Thomas’ Foundation Trust, Great Ormond Street Hospital for Children, the Christie and others. It is likely that there are many investors who would be greatly attracted by the idea of establishing satellite versions of these famous institutions in new parts of the world.   

The NHS has benefited from hundreds of billions of pounds of investment over many years. A successful campaign to sell NHS services abroad could secure an additional return on this investment and help subsidise NHS services for patients in the UK.

Distraction or opportunity?

But is this the right time to be thinking of exporting the NHS? Many see the establishment of NHS Global, a new NHS organisation designed to help trusts sell and deliver business overseas, as an unwanted distraction to an NHS trying to deliver the “Nicholson challenge”, with its relentless pressure to deliver ever higher quality with less money. 

The last thing the NHS needs, it could be argued, is giddy minds busied by the prospect of high risk enterprises in foreign countries. 

Alternatively, now might be the ideal time for the NHS to look earnestly at such opportunities. The financial squeeze in the UK means NHS organisations should be highly motivated to look for new sources of income because, despite the global economic downturn, healthcare is booming in many parts of the world. 

Ernst and Young’s Middle East offices receive daily calls from prospective investors looking for assistance in evaluating opportunities to set up hospitals, ambulatory centres, training facilities, laboratories and more. The state sectors are spending unprecedented amounts of money on transforming their healthcare systems at the same time.

The Ministry of Health in Saudi Arabia alone anticipates investment in hundreds of new hospitals. It recognises that its main challenge is not building infrastructure but securing the expertise to operate efficient, effective and safe facilities. In order to achieve its aims, it will unquestionably want to seek expertise from mature healthcare systems.   

Developing markets

In parts of the Far East, India, Africa and Latin America, healthcare is a rapidly growing sector of the economy. It is reported, for example, that pharmaceutical and life science companies view the developed world as offering little in the way of growth over the next 5-10 years.

‘Steely self-discipline is needed to ensure high standards are maintained and brands are not tarnished’

In contrast, Brazil, Russia, India and China (the BRIC nations), which can be considered a proxy for other developing countries, offer excellent prospects for growth. Yet developed countries such as the UK continue to be regarded as those with the edge in quality in healthcare.  

Operating globally provides the NHS with an opportunity to make money but it also offers a great deal more. It offers professionals scope to broaden their experience, new sources of funding for research, potential access to new technology and the chance to design and build new services − in some cases virtually from scratch.  

The prospects for NHS institutions therefore appear to be quite compelling.   

Overseas mission

The questions of what services to offer, and which markets to offer them in, are of huge importance. The NHS needs to have more than a broad mission to sell services overseas. Individual organisations need to have very specific strategies that define what they will do and, just as importantly, what they will not, as well as a clear focus on target markets. In short, they need to avoid being too opportunistic and responsive.

‘Organisations need to have very specific strategies that define what they will do and, just as importantly, what they will not’

NHS organisations will have to try to do more than offer consultancy services. The global healthcare consulting market is diverse, crowded and complex. Many consultancies are able to offer clinical advisory expertise using resources based in the same market as the client organisations (which is easier and cheaper to deploy).

The pure consulting approach may be attractive because it feels relatively low risk for a lot of NHS organisations but it will not be highly successful because it is not actually what the NHS brand is respected for.

Protecting the brand

It is also of crucial importance that organisations resist the temptation simply to “sell the brand” by allowing business partners to trade under their banner, sacrificing the opportunity to influence strategy and operation.

These opportunities will certainly come up and will often be very attractive in the short term because they require little effort and offer negligible immediate risk and predictable profits. But selling the brand of the institution alone would expose the organisation (and the NHS generally) to the risk of association with individuals who offer care of a standard that would not be acceptable at a British organisation.

‘NHS organisations need to be strategically canny, focused and very clear on what they wish to commit to’

Many emerging markets lack the sophisticated internal and national systems of healthcare governance and regulation that exist in the UK. Steely self-discipline is needed to ensure high standards are maintained and NHS brands are not tarnished. 

Similarly, the managed service model could be attractive to the NHS but should be entered into with a robust analysis of risk. Here, an NHS organisation would provide operational management of an overseas facility for a fee, usually with an arrangement that allows the client to get the marketing advantages of association with the service provider’s brand.

These arrangements are not uncommon and when they work well they can provide income for the service provider, plus good management and instant credibility for the client.

Risk of failure

But these deals fail frequently. Sometimes after lengthy and expensive negotiation the deal simply fails to transpire, sometimes after a number of years of apparent success relationships turn sour and contracts are terminated with financial loss, legal costs and the adverse impact on reputations. 

NHS organisations can reasonably predict that overseas failures will be front page news in the UK and they will be exposed to the white heat of criticism at home when they occur.   

What the NHS is known for is creating and leading a number of globally renowned institutions that deliver cutting edge care and conduct world class research.

Most prospective clients will not want NHS organisations to give them advice about how to achieve such objectives, they will want to work in close partnership with them, deploy clinicians and academics overseas for months or even years, and help graft that expertise into their organisations. Clients will want NHS entitites to commit their brands (and reputations) to new ventures and to share the risk, as well as the rewards.

What next?

The NHS can be a gift to the world if it is prepared to compete for business that will help accelerate the advancement of medicine in other places. But NHS organisations need to be strategically canny, focused and very clear on what they wish to commit to. The NHS will need to be very entrepreneurial and a debate is certainly needed about the freedoms and constraints organisations operate under regarding investing public money in pursuing overseas business. 

If the NHS is to avoid doing what many are worried about − deploying its resources for the benefit of overseas clients at a cost to its core constituent patients − then it will need to recruit new people. 

‘The NHS can make a real difference in helping transform healthcare elsewhere in the world’

Will trusts be permitted to invest in those resources before being awarded a contract, as a private investor would? It is likely they would want clarity of the rules and cast-iron government support if they were to take that course.

Trusts that are serious about pursuing overseas business also need to consider whether their commercial functions are adequately equipped with all the skills required to develop strategy, sell and deliver effectively against service contracts.

They may need to employ or procure the services of specialists with experience operating in the developing markets who understand the legal, cultural and political considerations of their new markets. They certainly need to evaluate the local market risks extremely carefully and ensure they are being appropriately rewarded for that risk. 

With these things in mind, there is little question that the NHS, with all of its people, expertise and experience, can make a real difference in helping transform healthcare elsewhere in the world.

Phil Leonard is a management consultant at Ernst and Young’s healthcare practice, pleonard@uk.ey.com