Richard Smith: Will entrepreneurs save the NHS?

Richard SmithAll the political parties and those at the top of the NHS see an important role for entrepreneurs in the latest version of the health service. Those labouring within the service are less convinced, and entrepreneurs have great difficulty finding any customers. The NHS Commissioning Board (or CB, as we are learning to call it) is thus organising a series of meetings for entrepreneurs to help them find their way into the maze of the NHS. I was at the first one this week.

I don’t think that I ever heard the word entrepreneur until I was well over 30, and former US presidenct George W Bush famously and apocryphally observed that the French had no word for entrepreneur. In my day young doctors didn’t start businesses. We joined the warm embrace of the NHS with guaranteed employment, regular pay rises, a merit award if you could play the system, and best of all a generous pension that would see you comfortably from your late 50s to death and a BMJ obituary. Despite reading Mao’s Little Red Book (I still have mine), wearing Che on our tee shirts, and attending the odd march and sit in, we weren’t about changing the world, the NHS, our even ourselves.

Entrepreneurs, in contrast, are about changing the world and the NHS, and if along the way they become as rich as Bill Gates so much the better. But they are not primarily in it for the money. If it’s money you are after much better to work for the NHS and do as much private practice on the side as you can get away with. Entrepreneurs start SMEs ( small and medium enterprises, more new jargon for you to learn), and most of them fail – even after you have spent your savings (and those of your parents) and worked seven days a week for several years.

The enterprise might be for profit, but it might not be. It might even be within the NHS. But whatever its form it will be about doing things in new way. It might be called an experiment. “Life is an experiment,” said Ralph Waldo Emerson, ” the more you make the better.” The beauty of the experiment for the NHS is that it’s funded with somebody else’s money. If it works it will bring value to the NHS. If it fails, tough.

The leaders of the NHS also recognise that the old ways of doing things are ceasing to work and that new ways are needed. “What exactly do you want from us?” asked one entrepreneur. Lower costs, answered Tim Kelsey from the Commissioning Board, with a bluntness he might later have regretted.

Much of the meeting was devoted to letting the entrepreneurs get their unhappiness with the NHS off their chests, and they responded generously.

The first problem they face is something that’s in the news, NHS culture, which is now universally agreed to be wrong. The Francis inquiry said that it was wrong because the system came before patients, and it’s not wholly fanciful to say that entrepreneurs experience a related cultural defect. Many in the NHS seem to take the view that getting outsiders to do something is a sign of weakness, whereas our economies are based on the idea that we do what we do best and pay others to do what they can do better, cheaper, or ideally both.

Many in the NHS are also against anything that’s for profit. The argument goes that money is being sucked out of the NHS. But why worry if a product or service is being provided both better and cheaper, which is nowadays the only grounds on which a for profit company will win a contract–unless the company is providing something, like a drug or MRI scanner, that the NHS has no hope of providing for itself? Indeed, to stand in the way of such a deal would be to put the system before patients’ interests.

But there is a legitimate worry that the NHS does not know how to buy services, particularly when they are new and radical. Much of the meeting was devoted to moaning about NHS procurement, which is as much a burden for those in the service as those trying to sell to it. Procurement is slow, bureaucratic, inefficient, costly, and often ill informed. My experience is that the NHS may have the worst of worlds: it endures what has been called probity paralysis, but the best way to sell seems to be to get drunk with those who buy, a form of corruption. Even those in the service interested to buy from SMEs might stay away because of the misery of the process. Procurement is a problem for all of government, and the Cabinet Office has suggested better ways.

The entrepreneurs at the meeting suggested many further improvements, and one big debating point was how much the NHS should know what it wanted to buy. Should it decide and then procure, or did it need to understand what was available through discussion with entrepreneurs and then procure? The best way for SMEs seems to be to build relationships, offer services on small contracts, and build up to procurement. If your product or service is good then it will work out.

One of the biggest problems for SMEs is raising capital. This is a problem for all SMEs in Britain compared with the US, but it’s a particular problem for those who want to work with the NHS because investors know about the difficulties of doing business with the NHS. At the same time everybody is attracted to the NHS because it’s one of the biggest sectors of the economy and because people are confident that there is lots of room for improvements in performance and productivity.

The most plaintive moan at the meeting was, however, that there are currently no customers. There have been almost no customers for the past three years as the NHS goes through yet another restructuring, a bigger one than ever before. These restructurings, a disease of the NHS, are bad not only for patients and people within the NHS but also for those trying to do business with it.

But there were perhaps a 100 people at the meeting, and there are plenty of entrepreneurs who want to work with the NHS. My belief, as the chair of an SME and just about the only old person at the meeting, is that they can make a big contribution to keeping the NHS universal, free at the point of delivery, driven by clinical need, and offering equal quality of care to all.

Richard Smith was the editor of the BMJ until 2004 and is director of the United Health Group’s chronic disease initiative.

Competing interest: RS is the chair of Patients Know Best, a start up that has NHS customers. He also had experience of doing business with the NHS when chief executive of BMJ Group and chief executive of UnitedHealth Europe. Although still employed by UnitedHealth, he runs a philanthropic programme and has no responsibility for any part of the business.