Can Britain afford the £110 billion it spends on the NHS?

By Dr Mark Britnell, Chairman of KPMG’s Global Health Practice
Beyond the intrinsic value in healing sick people, it is tempting in these straitened times to write off the money we pour into the health service as a burden on the economy. We should be more radical and see the NHS as a potential money-spinner for UK plc, giving a boost to Britain’s growth rate.

And nor should we let today’s funding constraints be a brake on developing our health system. Tighter budgets should be a spur to thinking differently about how we can capitalise on the challenges presented by the globalisation of healthcare.

Over the past couple of years, I’ve seen at first hand health care in 32 countries and worked with doctors and executives in public sector and private organisations from all parts of the world. This experience makes me certain that not only can the NHS be the envy of the world again, but it can also make Britain more prosperous. However, if this is to happen, the NHS will need to be more entrepreneurial.

During my travels, I carry a sort of mental algorithm around to assess health systems. My ‘five E matrix’ is equity, efficiency, effectiveness, experience and entrepreneurship. The NHS scores well, leaving me in no doubt that it can lead on nearly all of the measures over the next decade. But there’s bad news too.

First, the good news. The Commonwealth Fund last year placed the NHS in England second in a comparative study of seven developed nations. Trailing only the Netherlands, it scored highly on equity and efficiency. My own experience suggests that the efficiency of our system is second to none although productivity could be much improved.

Now for the bad news. On effectiveness, we have mediocre rankings for cancer survival. The Fund ranked the NHS bottom for “care delivered with the patients’ needs and preferences in mind”. While the NHS provides a great deal of comfort to patients who know that it will always be there, the bureaucracy of this heavily centralised system means that it lacks a cutting edge, which can lead to a lack of urgency.

The NHS can meet its efficiency targets of four percent per annum over the next four years. It can sharpen up management, use greater commercial acumen in procurement and be more sophisticated in integrating care for chronic diseases. While containing costs is important, we should spend more time on creating value too.

And we will need to motivate the 1.4 million people who work in the NHS. Isn’t the idea that they are creating the best health service in the world and adding to Britain’s wealth a compelling vision? The UK has the second strongest life science industry in the world and our expertise in the health fields means that there is lot more potential to contribute to wealth generation. Based on my travels, let me give you just five examples of what the NHS can do to help UK plc export to the rest of the world.


  1. The 12th five-year plan of China calls for the creation of thousands of hospitals. We can use our extensive experience of public-private projects — the NHS Plan stimulated the largest hospital construction programme in the world — to advise, design, build and operate these new facilities there and also across Asia, Africa and the Middle East. Added to that, our strengths in construction, financial services and project management could help Britain to ride this global boom in hospital building and management.
  2. Many governments in the developing world admire our primary care system of GPs and local surgeries as a very affordable way to provideg services to citizens. With a little bit of imagination and commercial acumen, we can export our skills and help design and run services to this large market of poor, often geographically dispersed, communities.
  3. The NHS’s education, training and development programmes can help others produce health workers of the future. This is a massive growth industry and we have yet to fully appreciate the fact that as the developing economies mature they too will require their own healthcare staff and be less able to export them to the West. Our universities, spurred on by tight financial settlements, have started to roam the world — and the NHS should follow. Quite literally, there are millions of people that will need to be trained in modern healthcare techniques.
  4. Britain has a wealth of expertise in health data services and management knowledge, as well sizeable tele-health and medical device companies, but they are often left to fend for themselves. Ironically, the most notable NHS success that I am asked to talk about when abroad is the National Institute for Health and Clinical Excellence. We could export all this expertise and management innovations, under a banner of professional services.
  5. The NHS needs to decide whether it wishes to compete in the $80bn, rapidly growing market in medical tourism. For instance, do we want to open hospital chains across the Middle East and plough the resulting revenues back into the NHS?

Similarly, University College London is one of the highest ranked universities in the world and UCL Hospitals one of the UK’s best health providers. Their combined global brand strength is enormous, so why don’t we encourage them to innovate. They could do much good in developing new clinical, education and research services around the world. Any joint-ventures with foreign organisations could do a great deal in promoting UK interests abroad, the NHS at large and generating substantial revenues.

These five ideas combined could have a market value approaching £50 billion — and I hope that NHS Global, which promotes the NHS abroad and aims to capitalise on its intellectual property, rises to the challenge.

A version of this article originally appeared in The Times

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