At its June meeting, Highland Marketing’s advisors discussed some of the challenges that face oversees companies, start-ups and scale-ups in accessing the health tech market; and how they might be overcome so they can play their part in helping the NHS to ‘reset, not just recover’ after the coronavirus outbreak.
At its previous two meetings, the Highland Marketing advisory board has discussed the impact of the coronavirus outbreak on the deployment of health tech in the NHS.
At its March meeting, which took place a week after UK prime minister Boris Johnson instructed people to “stay at home”, members focused on the rapid roll-out of remote working and virtual consultation tools, which are unlikely to be abandoned once the emergency is over.
However, they also noted that some areas of NHS IT, including electronic patient records and shared care records, have not been affected, that some architecture and security issues will need to be revisited, and that sustained investment will be needed to maintain progress.
At its next meeting, which took place past the “peak” of the pandemic, the board took a more critical look at these issues. Members argued there is a risk that organisations will “slip back” into old ways of working unless NHS structures, regulation, licencing and procurement are changed and, critically, funding is maintained.
They also argued that even if these issues are addressed, a “second wave” of innovation will be needed to create truly digital first pathways. This second wave is likely to be generated by nimble, user-focused start-ups, new entrants and scale-ups. So, at its June meeting the board discussed some of the barriers they face in gaining a foothold in the UK health tech market.
Four big challenges
To inform its discussion, the meeting opened with a presentation from Hassan Chaudhury, digital health lead for Healthcare UK at the Department for International Trade. In his day job, he has two roles: to help UK companies that want to export abroad, and to health overseas companies that want to work in the UK.
In the second of these roles, Chaudhury said he found companies typically encountered four barriers. One: navigation is hard; two: some companies lack commercial models; three: they are asked to run endless pilots; four: they encounter an alphabet soup of bodies supposedly ‘doing digital’.
One: Navigation is hard: Chaudhury pointed out that the NHS is hard for overseas companies to understand. It is referred to as ‘a’ health service, when each of the four countries of the UK has its own version. The English NHS is the biggest market but the most complex, with an evolving set of planning, commissioning, and provider bodies.
On top of this is layered a complex regulatory regime. “At the DIT, we tried to whiteboard all the regulation that companies would have to deal with: when do they fall within the remit of the MHRA, when do they need to go speak to NICE. And it was very complex,” he said.
Two: Commercial models: Chaudhury argued that too many companies “have an idea, then develop a product, and then try and sell it to a customer”, while keeping themselves going with multiple investor funding rounds.
More companies, he argued, should develop an idea or product with a customer in mind, and think-through how the customer is going to pay for their services. He noted that some of the best-known digital consultation companies focused on the insurance market, which has both a clear need and a clear payment model, before turning to the NHS.
Three: Pilotitis: Chaudhury pointed out that “there is a lot of parochialism” in the NHS. “If a company comes from Mexico and it wants to work in Dorset, then of course it should make sure that its idea works for Dorset,” he said. “But if it does, and it wants to move on to Newcastle, it shouldn’t have to prove it again.”
The fact that, all too often, it does have to prove it again is one reason the NHS’ existing incubator and accelerator schemes have a patchy record. Even if they get something working in one part of their patch, there is no guarantee the rest of the patch will take it.
Four: The digital alphabet soup: If the NHS is complex, then its digital space is byzantine: the DHCS, NHSE/I, PHE, other arms-length bodies, NHSX and NHS Digital all have roles, but it’s far from clear how they operate in practice.
At worst, Chaudhury said, they “all bring in their own innovations” – an issue that has become a significant problem during the coronavirus outbreak, as departments and ALBs have turned to their own contact books of (usually) large suppliers.
All of these issues were familiar to the board. Chair Jeremy Nettle said that when he worked for techUK, he often told newbies that “the N in NHS stands for numerous” and “go from there as in procurement terms there is no central NHS procurement structure to work with.”
While Andy Kinnear, the former chief digital officer of NHS South Central and West Commissioning Support Unit, argued that the 2012 Lansley reforms had created a “particularly complicated version” of the NHS in England.
The advisory board has said repeatedly that it would like to see the re-introduction of effective, regional structures to reduce fragmentation and drive decision making. But even if they emerge, they will take time to find their feet.
James Norman, healthcare chief information officer, EMEA, DellEMC, noted that this was one of the issues with the digital alphabet soup; the two organisations at the heart of it, NHSX and NHS Digital, “are still trying to define their roles.”
If they don’t know exactly what they are meant to be doing, how can innovators work out how they may be able to help them? Ravi Kumar, an entrepreneur himself, went so far as to say that while the NHS could look like an attractive health tech prospect, appearances could be deceptive.
“From a distance, it looks like a well-integrated health and care system, ripe for innovation,” he said. “But it is deceptive. There is England, Scotland, Wales, Northern Ireland, the regions, the digital bodies. None of them have innovators in mind. The regulation is hard. The buying frameworks are not fit for purpose. It is not for the fainthearted.”
On the upside, he argued, any company that could make it through would be “hardened” and ready for any export opportunity going; and investors do still like to see NHS success.
What’s the way forward?
So, what are the solutions? Kinnear argued that whatever the organisation of the NHS, there will always be a mix of people working within its organisations. Some will be risk averse and unwilling to try anything new. Some will embrace innovation.
Some will want to work with ‘big tech’. Some will be looking to develop their own ecosystem of supportive suppliers. The trick for new entrants and start-ups, he argued, is to find the people who want to work with them.
Nicola Haywood-Alexander, a public sector CIO and new member of the board, said it would help if the NHS invested in these individuals. “A question to ask is: ‘what is the real benefit to the UK and to the NHS of bringing companies over or encouraging innovation?’” she said.
“If there is a benefit, then we should invest in the skills to do it.” In particular, she suggested, NHS IT needs to invest in making its leaders more confident about building data architectures and demanding digital that is designed to deliver a good experience for the user of the technology.
“What Andy is saying really resonates with me, but there is something here about not just finding these individuals but developing them,” she said. “We need to make sure everybody has the skills to not just buy systems but to make sure they are fit for purpose.”
Big tech is not the enemy – and may be a good friend
Norman took a slightly different tack. He argued that in other sectors a well-established commercial model for smaller suppliers is to work with ‘big tech’ firms that have the heft and resources to deal with complex regulatory regimes, procurement processes, and customer landscapes.
Some health tech companies should take the same approach, he argued, and “get embedded with someone big enough to deal with all the hassle that the NHS is going to throw at them.” This, he added, meant thinking beyond ‘partnership’.
“They need to think of the link-up phase as part of their long-term plan, instead of just doing something and hoping the customers and funding will come along in the future.” Andrena Logue, a consultant based in Northern Ireland, agreed with this.
“Big tech is not the enemy of SMEs at the moment. If you need to mitigate risk, then working with big tech can be a safe option,” she said. “And big tech is looking for innovation. Behind every big tech company these days you tend to find a pool of SMEs to provide it.”
However, she pointed out that while Northern Ireland has a vibrant university, research and start-up sector, companies often look to the US before they look to the UK for growth. So there is still a need to make it easier for health tech companies of all sizes to sell into the NHS.
One idea that hadn’t yet been discussed, she suggested, would be to refocus on digital maturity, which was started to gain some attention before the coronavirus hit. If there was more transparency about the digital maturity of different trusts and healthcare economies, she argued, it would be easier for companies to see where their ideas would work.
Ultimately, she said, “for any vendor to find this worthwhile, they are going to need to know where to go” and for any NHS organisation to be interested “they are going to need to know the value of the activities they are looking to bring in.”
All business is local
Chaudhury felt there was “violent agreement” around the table about the issues. And if there was one, further thing that the advisory board agreed on, it was that innovation would not be driven by national bodies or networks outside the NHS’ normal operations.
Because, as Kinnear pointed out, they are not the ones who need what companies have to offer and they can’t deliver them customers. Outside the rare occasions when they buy for the entire NHS, “they can’t buy anything” and they can’t force local organisations to buy anything, either.
As Logue put it, innovators need to “cut out the middlemen.” Develop a business model, “get to localities and individuals and prove it.” “That will go a long way to resolving a lot of these issues.”