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NHS has to disrupt itself into NHS 2.0

| June 14, 2016

NHS 2.0

Last month, it was announced that NHS Trusts in England had run up a record deficit of £2.45 billion in the financial year 2015-16 (NHS hospitals in England reveal £2.45bn record deficit, 20 May) – the biggest overspend in its history.

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The economic results for 2015 are 461 million below the worst case estimates. The deficit is now 20 times higher than in 2013. Over 65% of healthcare providers are in deficit. Furthermore demand for NHS services is increasing rapidly. In 2015/16, Accident and Emergency attendances were 2.5 per cent higher than the previous year – the equivalent of more than 567,700[1].

This dire financial picture is not one that is likely to change any time soon – over the coming year, the NHS could easily reach a crisis point without additional investment – investment that the Government will find hard to find if it is to keep a lid on public spending. In March, the Chancellor George Osborne presented forecasts for growth of just two per cent this year, and no more than 2.1 per cent for the remainder of the Parliament[2].  NHS is currently costing the taxpayers around 9.1% of UK`s total GDP. Should UK voters opt for Brexit in the upcoming EU referendum, and Mark Carney’s predictions about the risks to the economy come to fruition, then an already challenging financial picture for the NHS could prove catastrophic. In addition, with demographic changes and ageing society pressure will continue to grow.

So, how do we solve problem of the ever growing gap between demand and funding? Inevitably, the Treasury will come under increasing pressure to make additional investment available – which in turn would put other areas of public services under strain. Whilst this may bring about a short term stabilisation, in the longer term this is unlikely to solve the fundamental problems affecting the health service.

In our view, the solution is greater competition and focus on innovation and prevention. Until the NHS embraces competition, and no longer treats the concept as a dirty word, then it will fail to realise much needed efficiencies in the system. Prevention is the second key. Health strategy should from now on be increasingly focused on fighting diseases before they start. It is cheaper and more effective. The third pillar is innovation. We cannot be afraid of disrupting our health system with telemedicine, e-health and new digital health technologies to empower our patients to be able to look after themselves.

Without greater competition, innovation and preventive solutions, in the longer term, quality of care for patients will continue to suffer. And so will the NHS.


By: Georgiana McTavish, Jan Ruzicka, Arvind Bashyam and Ahsan Zaman

Authors are Health and Business professionals and EMBA students at Judge Business School, University of Cambridge



[1] King’s Fund (May 2016), Quarter Monitoring Report 19. Available at: <>

[2] The Week (18 March 2016), Budget 2016: ‘We should all be worried’, warns IFS. Available at: <>


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