NHS performance: the step change challenge

Health is an industry where demand is increasing exponentially across the globe, with the searing pace attributable largely to dramatic demographic shifts, combined with the growth of technology and pharmaceutical advances. UK life expectancy has doubled since 1850, while a huge increase in lifestyle illnesses has occurred. By 2025 it is predicted that 40% of the adult population will be obese. Public expectations are also quite different today than in previous eras. Consumers expect healthcare facilities to be open for longer to suit today’s lifestyles, while the “Google generation” not only possesses greater knowledge, and expectations, of what treatments are available for a range of conditions, but has also had stronger “rights”, in terms of patient choice, afforded to it by successive governments. Projections from the OECD (Organisation for Economic Co-operation and Development) moving forward suggest that that this demand will require a further increase of between 3 and 6% of extra GDP by 2050. In simple terms this means at least 35% more cash investment at current levels. This is nothing new, with managers and estates professionals having dealt with similar scenarios for years. What is different today is the deeply worsening economic position.

Return on investment?

The NHS has been one of the real beneficiaries of a decade of investment. In 1960 the NHS budget was less than 4% of GDP, by 1997 it was 6.6%, and in 2008/09 it represented 8.6%. This means that the Government has increased spending from £35 billion to £119 billion in a little over 10 years. The difficulty is not the investment that has been made, but rather the benefits it has secured in return. There are some great elements to the NHS, with pockets of world-class performance, notably in the fields of science and new pharmaceutical applications. Correspondingly, much has been spent in achieving a massive reduction in waiting times, demonstrated by the scale of reduction in waiting times in both inpatient and outpatient appointments times as shown in Table 1. No one can seriously contend that this does not represent progress, and we can all remember times past, not that long ago relatively speaking, when it was not uncommon for patients to wait up to two years for common operations such as those for cataracts and hip surgery. There has also been a corresponding massive investment in new hospitals, clinics and community facilities, with a spend of around £30 billion providing more than 100 new hospitals, 3,000 primary care facility improvements, and nearly 200 new clinics and community health facilities, a number using the LIFT initiative. The upside of this capital development is a decrease in the average age of facilities; in 1997 more than 50% of the healthcare estate was pre-1948, but now the figure is 21%, with an expectation that this will reduce further over the next three years. One remaining difficulty, however, is that backlog maintenance, which sat at £2.8 billion in 1997, has increased to above £3.5 billion in 2008/09, with around 23% of the estate defined as “not fit for purpose”. In addition, we are of the opinion that nearly 15% of the NHS estate is currently defined as “not used” (this includes 3% completely surplus to need). This in an NHS of more than 29 million m2 of gross floor area, with a declared value of some £40 billion. To place this in context, Tesco UK currently utilises around 2,300 properties with some 2.9 million m2 of occupied area, in which case to have 4.35 million m2 of under-used or unoccupied space – substantially more than Tesco’s entire retail portfolio, could, even allowing for the nature of retrenchment of the NHS estate and market conditions, seem a pretty poor use of opportunity and resources.