No Cash, No Staff: How can the NHS Afford to Digitise?

Warnings from The King’s Fund and the Health Foundation, that cuts to capital funding have slowed transformation, and left staff reliant on outdated technology, have been met with concerns that new funding will take time to put things right.

So, when trusts face continued challenges to become paperless and invest millions in digital, how can they find the money?

It's a question I have faced almost daily from trusts as a commercial director of an NHS supplier. The level of deficit has been so great, that even a solid business case demonstrating hundreds of millions of pounds of savings opportunities in the long term, can be rejected due to a lack of available cash and the need to balance the books.

Budgetary increases alone cannot hold the answer. Suppliers, trusts and the government must each approach finance differently to defeat obstacles and make crucial long-term investments, like digital, feasible.

The real problems: Why finance directors say no

Paying two suppliers at once is the first obstacle. Many trusts have legacy IT systems, and in the time it typically takes to implement a new electronic patient record system, incumbent suppliers still demand maintenance fees as high as £1m per year.

Whilst financing the incumbent, the new supplier wants its payment too. Realistically, trusts won’t pay a multi-million pound bill upfront, but they will still face fees of that magnitude over incremental implementation milestones. And for those systems that aren’t open source, license costs add to the early financial headache.

Then comes the human resource hurdle. Implementing an EPR requires a team of IT staff, project leads, clinicians, and experts from across the hospital. In most cases, people perform their job of looking after patients whilst providing input to the digital programme, meaning deployment takes longer - and that means cost. An alternative is to create a dedicated EPR team - but then the cost of back-filling positions starts to mount.

All the while, the trust is not realising any efficiencies during implementation. And, that is the next stumbling block - cash releasing benefits and savings don't kick in until system go-live, when staff use the system in anger, and until the hospital actually starts getting rid of paper.

Then there is an ongoing cost with implementation. Post go-live we find that staff are using paper where they shouldn't. They need to be reminded to use their new system to stop paper building up again. There is a cost associated with transformational change.

Costs are typically high and returns very low during the initial phases of a paperless project - creating real challenges for balancing the books during implementation, often a reason why digitisation isn't happening despite longer term positive financial and clinical impact.

Common hurdles, common answers

There is no one size fits all approach. But understanding recurring financial hurdles also presents common answers requiring action from trusts, suppliers and the centre.

Suppliers burdening more of the financial risk

This means taking a shared risk to make digitisation affordable. As a supplier, there is a cost to us to implement the system, but we can factor that in to a 10-year programme. This can take the payment off the balance sheet, so that an EPR is not a capital asset on the books.

We can provide trusts with the options to structure payments to take account of their capital or revenue constraints, allowing the flexibility for payments to be made as a percentage of cash-releasing rewards, or for trusts to fund suppliers from the resulting enhanced performance of the hospital.

Bolder government action?

Slash implementation times

Activating the role of GDEs beyond technology

Suppliers too can embed implementation teams where needed, the cost of which could be spread across the term of the contract, and the centre could also look to create teams dedicated to speeding up the costly implementation cycle for trusts.

Real progress