Innovation needs competition

One of Lord Darzi's key recommendations in his interim report released today is the creation of a Health Innovation Unit - with a budget of £100m 'to help the NHS develop and deploy hi-tech health care such as medical devices and diagnostics'.

But it is wholly unclear that a new central body is what is required to drive innovation in the NHS. The NHS already has such a body - the National Institute for Innovation and Improvement - and its lack of impact has been noticeable.

A report released today by Civitas, the independent social policy think-tank, argues that the Health Innovation Unit will only help if the NHS follows its own reform agenda and embraces diversity and competition; PCTs must be empowered as strong commissioners, providers must be autonomous and patients must have real choice. Central direction needs to end.

There are many examples of innovation in the NHS, but they are too few. An even greater problem is the very slow rate at which any new techniques or technology diffuses:

• A cross-country study of technological change associated with heart attack care in 2001 found uptake of new technologies in the UK, such as angioplasty, to be both 'slow' and 'late'.


• The UK only fits 430 new pacemakers per million of the population, compared with 900 per million in France, Germany, Belgium and Spain, despite cardiac arrhythmias being among the top 10 causes of unplanned hospital admissions.


• In Germany over 40,000 patients use insulin pumps compared with less than 2,000 in the UK - yet type 1 diabetics, if not managed effectively, will more than likely cause both personal suffering and significant costs to the NHS later in someone's life.


• The Karolinska Institute recently found that the UK - along with the Czech Republic, Hungary, Norway and Poland - was 'consistently identified as a below-average adopter of new cancer drugs' out of 19 European countries. [pp.1-2]

Yet all the evidence shows innovation saves lives. To take a couple of examples:

• A low-cost monitoring device that assists GPs in early diagnosis of atrial fibrillation (AF) for stroke prevention and other life-threatening heart rhythm disturbances has been estimated to have saved over 150 patients' lives, despite having only been taken up by less than 1 per cent of GPs.


• Research highlighted by the Karolinska Institute showed that an increase in the number of available cancer drugs is associated with an increase in both one-year and five-year cancer survival rates, by as much as 50-60 per cent. [p.2]

All this supports Lord Darzi's case. But innovation will only realise its full potential in a system that is competitive. "The root cause of the lack of innovation in the NHS is skated over far too often" argues James Gubb, the author of the report Innovation needs competition, "is that nationalised monopolies, such as the NHS, whether intentionally or not, stifle the rate of change by both reducing the pressure to innovate in the first place, as well as slowing down the diffusion of innovation." [pp.3-4]

In open markets the threat of entry by newcomers not only puts pressure on prices; it also acts as a pressure towards innovation because if, say, a hospital - or new provider - pioneered new techniques that provide higher quality, more cost-effective, care, it should both attract more patients and make greater profits. Such incentives simply don't exist in the NHS at present.

Instead, subject to a flurry of performance management, targets, constant re-organisation and financial insecurity the focus has been on short-termism, managers have lacked strategic direction and focused on the short-term. There has been a 'creeping mix' of equipment, rather than necessarily more clinically efficacious and cost-effective systems; best exemplified by District General Hospitals, many of which have overshot the level of care actually needed by the vast majority of patients. [p.4]

For those who have implemented innovative practices and are providing better quality and more cost-effective care because of it, there is no competitive impulse to induce change in others - it is left to central bodies to try to force best practice on risk-averse actors that are inclined towards the status quo.

Even semi-autonomous organisations such as Foundation Trusts - at least in theory free from performance management - are severely affected in such a climate. Monitor recently revealed that FTs are currently sitting on a huge £995 million in cash balances largely because 'in the absence of greater certainty about the long-term requirements of commissioners, FT boards continue to demonstrate a reluctance to invest in major capital projects [and develop new services]'. [p.3]

There are organisations - both NHS and independent - such as UCLH, CancerPartnersUK and Centres of Clinical Excellence, lining up to challenge the old ways of doing things, but they are being stymied by the system, relying on a competition-shy 'patient choice' agenda being flexible and accommodating enough for them. [pp.4-5]

It doesn't have to be like this. If the NHS embraces its own reform agenda of patient choice and market reform, competition can drive innovation and patients will benefit. Only in such an environment will a Health Innovation Council work.

The report, Innovation needs competition, can be found here.

For more information ring:
James Gubb, Director, Civitas Health Unit: 020 7799 6677 (w), 07930 243570 (m)