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Healthcare spending should be linked to patient outcomes and wider benefits

The planned annual £20 billion injection into healthcare – announced by the Government in the year that the NHS celebrates its 70th anniversary – is a positive step forward and will bring England’s healthcare spend closer in line with other Western European countries. However, it should be closely linked to the impact it has on patient outcomes and the savings it generates for the wider economy.

Around five per cent of current healthcare spending – just over £6 billion – is currently invested in medical technology. Much of that technology – from artificial hips to the diagnosis of sepsis and coronary angioplasty – has a tangible impact on patient outcomes, preventing the need for further treatment and hospital stays, while enabling people of working age to return to the workplace.

An extra £1 billion – or five per cent of the additional budget spent on medical technology – could therefore generate significant savings for the wider economy, in terms of reduced healthcare costs, lower welfare spending, and increased tax revenues.

However, the MTG is recommending a thorough review of NHS spending. With pressure on the NHS mounting and only forecast to increase, it’s time to think carefully about the broader economic and societal value any additional spending will generate. For example, to ensure the NHS purchases best value, its approach to buying the cheapest possible products needs to be reformed. Instead, a greater emphasis is needed on value-based healthcare and associated commissioning where the NHS only pays when the desired outcome is delivered.

It’s vital that this shift in approach, which is currently largely absent in NHS reimbursement systems, accompanies any extra funding to ensure value for the tax-paying public, sustainability of the NHS, and that patients have access to the most appropriate medical technologies.

Moving to a revised payment system linked to outcomes valued by patients and policymakers alike will ensure the NHS is at the forefront of medical technology access and adoption for the next 70 years. The medical technology sector is already leading this shift internationally and is ready to support and partner the NHS on this much-needed transformation.

Furthermore, improved payment mechanisms are required to fund more of the treatments we need to keep the English population healthy and able to work for as long as they need to, while NHS efficiency drives should focus on increasing provision of cost effective treatments rather than rationing access and reducing commissioning budgets. Failure to do this means benefits to the overall economy will never be fully realised and patients will continue to lose out.

Of course, outdated treatments are sometimes identified. When this happens, they need to be replaced with much improved gold standard treatments rather than stopped as in the case of the recently publicised list of ‘ineffective treatments’. These treatments are often very valuable for patients with varicose veins, carpal tunnel syndrome, or bone spurs for example, and are critical to restoring health and quality of life.

This additional investment by the Government presents an enormous potential opportunity. Together these initiatives will help make the most of it and ensure all valuable medical technologies make a tangible difference.

A study by the MTG Keeping Britain Working – How medical technology can help reduce the cost of ill health to the UK economy’ – published in November 2017 – concluded that £476 million in savings could be generated in reduced long-term health costs and benefit payments from the use of just eight technologies.

July 2018

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