Image chosen for the vibrancy and life that still exists despite the dying colours of autumn

Déjà vu, persistent headwinds & a new future: State of the UK’s private health sector

Déjà vu, the feeling that one has lived through the present situation before, is what I felt attending a recent Private Acute Healthcare conference.  I published a blog in 2015 (“The State of Independents”), observing where the private healthcare sector found itself then. If I lifted the introductory paragraphs of that blog and stuck them in here, you wouldn’t know the difference. Very little has changed.  

This is a sector that seems to have run out of energy. The headwinds against which it continues to struggle are: 

  • Finding reliable sources of growth – low/no growth in traditional PMI, self-pay and international work persists
  • Organising for better governance and safety – we are now at ‘peak Paterson’ with the Bishop of Norwich report and the Independent Healthcare Providers Network Consultant Oversight Framework being published soon
  • Engaging with a more rigorous regulatory environment – evolving CQC inspections methodology and CMA orders still being implemented 
  • Making sense of a plethora of tech, data and information, but to be fair this is not specific to healthcare 
  • Emotionally ambivalent, distrustful relationships between providers and insurers, and insurers and consultants  
  • Increasing complexity for patients – this makes navigating the system difficult and limits access across insurance, self-pay and international markets 

Moreover, the industry is showing signs of “competitive convergence”. This is a great phrase coined by Michael Porter who explains: “As rivals imitate one another’s improvements in quality, cycle times, or supplier partnerships, strategies converge, and competition becomes a series of races down identical paths that no one can win”. No real differentiation and commoditising healthcare is the inevitable result. 

Two flickering flames 

While I didn’t sense much enthusiasm or excitement for anything really, two flames flickered in the dark: Private Patient Units (PPUs) and Spire Healthcare’s new focus on purpose. 

PPUs work on a different model and can teach the private sector a lot about patient choice, pathway management and governance. They are finding that patients are happy to move between NHS and private services to meet personal preferences. Pathways are more end-end and start with a multidisciplinary team focus. PPUs also have the governance systems in place from their NHS parents which greatly assures private patients. The power of the PPU needs to be watched, but I fear for complacency amongst some private management who still say to me that the NHS will never really get its act together and will always need them!  

Spire stood out. The organisation is focusing on its purpose. I’m almost evangelical about the commercial power of purpose, having developed purpose statements for many organisations and seeing the positive impact this can have on individuals, the organisation and local community. I’m keen to read the new purpose statement but more interested to see how it plays out in shaping a more differentiated strategy for Spire. Spire execs, who presented at the conference, were also working hard to convey the ways they are trying to improve their governance, by actively managing a “Freedom to speak up” culture and remunerating their Medical Affairs Committee chairs to be more accountable. 

What to do? 

Only one thing, really. The UK’s private healthcare sector needs to reimagine a new business model that goes beyond product and really puts the needs and preferences of people first. This will, however, require brave leaders. These leaders must give more airtime to important (strategic) issues and as such manage teams and investor expectations away from the urgent (operational) issues that dominate the day to day. Operational efficiency alone is not enough to win.  

Different types of services are needed in today’s healthcare system, not all of it in hospital and some requiring better care coordination. The building blocks of better healthcare systems are population health management and people participation (patient leadership). These initiatives should be embraced by the private sector if they want to differentiate themselves and find a new future. Our thinking differently strategy concept can help to get going! 

This has been ‘Away from the Heard’: The Saffron Steer blog. We’d be very interested in your views and comments. 

[Image Credit: Gerhard Gellinger via Pixabay