Common Good

Free at the point of use. Taxpayer-funded. The NHS is dear to the nation because of these principles. In recent years, though, public discourse has neglected the third principle: public ownership. What may seem like an administrative technicality in fact has a significant impact – from how the NHS delivers services to who reaps the rewards of innovation. Wes Streeting has said the NHS must reform or die. Whether it can or not will depend on taking public ownership seriously.

Public money, private wealth: how the NHS gives assets away

A decline in public ownership has excluded the NHS from benefitting from innovations it has helped to create. In 1997, Frank Hester created SystmOne, a GP-based IT system that is still widely used today. Despite benefitting from a variety of public investments – including seed funding via Bradford Health Authority, favoured status under the £12.7bn National Programme for IT (NPfIT), and subsidised expansion through the GP Systems of Choice (GPSoC)framework – SystmOne remains entirely privately owned by Hester’s company, The Phoenix Partnership (TPP). The NHS paid for its creation, paid for its spread, and pays to use it – yet owns not a single share. While Hester became a billionaire, the taxpayer got a £400m bill.

The dangers of this logic get worse at scale. When the coalition government introduced the internal market in2012, the aim was efficiency through competition. The Darzi report commissioned by the Labour government, however, found that the real result was cost-cutting, duplication of work by competing teams, and a proliferation of business models designed to extract wealth from the state. The Tory health secretary, Andrew Lansley, had assumed public ownership was the problem. Thirteen years later, should we not be wondering if the opposite was true?

Public ownership is a competitive advantage

As the case against public ownership has fallen apart, the case for expanding it has only grown stronger. Seventy-five years of NHS data has become an extremely valuable public asset, especially to AI companies keen to buy access to ever larger datasets to train their models. Without defending public ownership, we could see that data (and our leverage) given away. On the other hand, a policy of a public stake in successful innovations would not only provide the NHS with a revenue stream; it would provide risk-averse NHS trusts with a hard incentive to open up to innovation – a win-win situation. The NHS is often treated as a drain on public finances. In fact, it could be our biggest ticket to growth during an AI boom. Examples of a public-equity approach are in their infancy around the UK. In the case of Sensyne, the shares the NHS received in exchange for data offered an immediate financial return – and had finance executives been savvy enough to sell its stake when the share price peaked, it would have been lucrative. North of the border, the Innoscot initiative has generated £250,000in royalties from spin-off companies for NHS Scotland, and a portfolio value of over £30m. Whitehall could go even further by modifying the NHS Clinical Entrepreneur programme and NHS Innovation Accelerator. Why not retain a 5-15 per cent stake in spin-offs in exchange for generous provision of business development support, data access, and scaling-up fast-tracks? Encouraging such efforts could harness the NHS’s talented human capital, and build on our competitive advantages in entrepreneurship and research, while retaining the proceeds and intellectual property within the public space. Post-Brexit, the time to push our advantages globally is now.

Ownership is power; renting is false economy

Two futures face the NHS. In one, the principle of public ownership continues to be diluted. The NHS ends up renting back its assets it has given away, like an aristocrat that has had to sell the family silver. It has less bargaining power, because of its dependence on the private sector to innovate. And there is no incentive – except financial – for different providers and systems to talk to each other. The alternative future is one where public ownership corrects for perverse market incentives. Because the state owns the products and technologies it relies on, it has an interest in reducing, not inflating, long-term costs. Because it has oversight of how different systems work together, the health service soles its productivity crisis. And with a slick development pipeline from clinicians to global markets, Britain’s historic weakness in commercialising British inventions is reversed.

The NHS is at a crossroads. Every missed opportunity to build state capacity today locks in private dependence tomorrow. The more we outsource control of NHS platforms, software, and knowledge, the harder it will become to reform anything at all. Public ownership has always been part of the NHS’s DNA. Policymakers need to remember it is also the key to its future.

Image credit: duncan cumming via flickr