Have you heard about the upturn?

It may come as a surprise to many, but despite recessionary pressures, Kable is forecasting that the ICT healthcare industry in the UK will grow from £2,342m in 2007-08 to £3,488m by 2013-14, representing a compound annual growth rate (CAGR) of 6.9 per cent.
    
These findings contradict many gloomy market predictions. For example, the report ‘How cold will it be? Prospects for NHS funding: 2011-2017’, published by the Kings Fund in July 2009, says that high funding increases in the NHS between 2011 and 2017 will range from ‘tepid’ (annual increases of just 2-3 per cent) to ‘arctic’ (annual reductions of 1-2 per cent).
    
But the naysayers have failed to consider a number of factors which are still driving growth in the industry.

National programme for IT
Firstly, the National Programme for IT (NPfIT) has reached a make or break point, where further investments are inevitable. NHS Connecting for Health (CfH) and trusts have already spent large sums of money on the Care Record Service and it is likely that they will continue to do so until they fully realise the benefits, which it and various other software solutions can offer.
    
As a testament of this, Christine Connelly – the chief information officer for the Department of Health – is exercising a lot of pressure on the NPfIT software suppliers iSoft and Cerner to deliver tangible benefits. If they do not succeed, it is more than likely that new vendors will be invited to join the initiative, rendering the marketplace more competitive and dynamic, and inevitably fostering growth and innovation.
    
Secondly, there is enormous pressure on the health system caused by an ageing population and on an increase in those suffering from chronic disease – and both will only increase. Early investments are inevitable if the government wants to avoid the so called “age bomb” going off in 15 to 20 years. This phenomenon is not confined to the UK, with many developed countries are experiencing exactly the same.
    
Finally, Kable research has demonstrated that local NHS trusts do not expect to make cuts to their ICT investment in the next few years. Many are quite sophisticated and realise that technology is not a burden: it can actually help them to save costs by achieving efficiency targets, reducing patient pathways, improving patient care, improving quality and clearing their waiting list backlogs.
    
The impact of back office budget cuts on ICT spend would be double-edged. Some would see IT and telecoms as a luxury and hence fair game for the axe. But there is a strong argument that technology can help trusts to meet efficiency targets and hence to reduce their patient backlogs. And with most trusts funded on a payment-by-results basis, this would help them to save money.

Not a cutting remark
There is a concern that an eventual Conservative government could reverse this by making massive cuts to the NHS, but this is unlikely to happen. It is true that the last two Tory governments promoted deep structural changes to the NHS. Thatcher inserted various mid-management layers of bureaucracy in order to measure profitability – the internal market principle – while Major fragmented a monolithic NHS into trusts.
    
But the Conservative Party has changed a lot in the past 12 years. Shadow health secretary Andrew Lansley promised at the party conference in October to remove bureaucracy in the NHS by cutting £1.5bn in administrative costs and moving the funding to the frontline.
    
These back-office cuts will probably translate into cuts in administrative staff and more opportunities for technology vendors, which can offer low-cost, innovative technology and outsourcing in order to achieve efficiency savings and to do the job of staff who are made redundant.
    
The Tories commissioned an independent review of the NHS and social care IT, which was published last August. The research was conducted Dr Glyn Hayes, the former chair of the British Computer Society’s health informatics forum. The document failed to make any groundbreaking revelations and instead confirmed much of the current government’s thinking.
    
Never have the Labour and the Conservative health modernisation agendas been so similar. Both understand and agree that the NPfIT has achieved a lot and should not be scrapped, that decentralisation is required and that health services should become more patient-centric.
    
Neither recession nor the Conservative Party will stop the bandwagon of NHS modernisation. It is the key to coping with the requirements of the 21st century, and keeping healthcare free to all at the point of delivery.

For more information
Victor Almeida writes regularly for SmartHealthcare.com, which publishes analysis, comment and news on health and social care informatics. Sign up for its regular e-mail at www.tinyurl.com/shupdate

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