Just how bad is the NHS at innovation? The answer – we don’t know

BY James Barlow

“There is strong encouragement for the NHS to make better use of innovation, but we’ve not known how our system performs internationally. Now we are developing a potential measure.”

The Accelerated Access Review (AAR) – which aims to help speed the introduction of health innovations into the NHS – was published last October. Readers with long memories may recall a string of previous reports all tackling the need to improve the UK’s health innovation system: the House of Commons Health Committee’s inquiry into the use of new medical technologies (2005)1, Best Research for Best Health (2006)2, the Cooksey review (2006)3, Innovation for Health (2007)4, Our NHS Our Future (2012)5, Innovation Health and Wealth (2012)6.

The AAR calls for a broader remit for NICE, to include more medtech and digital health innovations. Other recommendations are for closer alignment between regulatory requirements and processes, and for once-only assessment by NHS England of innovations not referred to NICE. Simpler and swifter procurement processes are part of the future agenda. And in an implicit nod towards the work of Clayton Christensen, the AAR suggests there should be some funding to support the commercialisation of disruptive innovations that have the potential to significantly improve care pathways.

These are all sound recommendations, but they are only the beginning. Recommendations now need to be turned into specific actions with budgets, owners, milestones and deliverables.

The good news from the AAR is that consensus seems to have broken out, with a genuine belief by government and NHS leaders in the potential of innovative technologies to improve patient care. The consensus extends to a call for more flexible approaches to pricing and reimbursement which can support the adoption of innovations.

The bad news is that the NHS is in deep financial trouble. For all the Churchillian rhetoric of healthcare leaders – “we have run out of money, now we must think” – and exhortations that a crisis is a great opportunity for innovation, the distinct tendency in the NHS is to hunker down, deal with the immediate concerns and shuffle innovation into the “too difficult” pile.

Goals, targets or crisis can of course concentrate the mind and, when coupled with the right kind of support and incentives, generate useful new ideas – a good example was Scotland’s Unscheduled Care Collaborative Programme in the mid-2000s7. However, the magnitude of the challenge of modernising the NHS, whilst continuing to run services with shrinking budgets, seems overwhelming. We know we need innovation, we know what kinds of innovation we need and we have a pretty good idea what is the potential impact of many innovations on improving care – the problem is introducing and establishing them in the NHS.

The AAR, if its recommendations are implemented, might help to speed up the flow of some new technologies into everyday practice, but it will not tackle the other layers of innovation that are needed. These were nicely described by the Health Foundation in 20158 as five interlinked components of a framework for change, all of which require innovative thinking – population health management, ways of delivering care, process improvement, active cost management, and scientific discovery, technology and skills. The report argued that all these are capable of delivering improvement over different timescales. Interestingly, the last of these – science and technology – is felt to have the most limited potential impact.

But just how bad is the NHS at innovation? There is much anecdote and received wisdom – “the UK is great at generating innovations but poor at adopting them”, “the NHS is always a late adopter”, “developing countries health systems are where the really interesting new ideas are”, “the USA over-adopts healthcare technology”.

Much seems to depend on perception. The 2016 Global Diffusion of Healthcare Innovation study surveyed 1,356 frontline health workers and healthcare leaders in six countries and found that the USA and UK were ranked as the two most important sources of innovation, but there were variations partly according to location – India was perceived as by far the most important by interviewees in some countries.

The volume of research on healthcare innovation processes has grown over the last fifteen years or so. We know what constrains the adoption of innovation and we know what innovators need to support them from research to commercialisation.

What we lack, though, is any kind of assessment of where different countries stand in relation to each other in their healthcare innovation capacity – how good they are at adopting innovative solutions developed elsewhere and originating innovations themselves. None of the reports on the state of healthcare innovation in the UK described above provide any real insight into our performance compared to other countries. Apart from limited work by Deloitte9, PWC10 and Accenture11, there has been no attempt to create an international comparative healthcare innovation index (the Global Diffusion of Healthcare Innovation is not an index because it teases out perceptions of innovativeness).

There are many indices or composite indicators measuring aspects of national performance in innovation in general. Indicators include measures of entrepreneurship, technology development and scientific research, innovation in general, and innovation in public sector organisations. However, these remain underdeveloped in relation to health.

A carefully constructed global health innovation index would be valuable in two ways:

• It would focus attention on the relative performance of the UK’s (or any other country’s) health system, pinpointing its strengths and weaknesses, identifying bottlenecks and issues for attention. This would enable policy makers and the healthcare sector to identify and prioritise the levers that can have the greatest impact on innovation.

• It would help medical technology and life sciences companies by providing an understanding of the attractiveness of each country’s health system as a market for products, as a source of innovations, and as a location for R&D.

A project funded by PIRU has carried out the groundwork needed to develop a global health innovation index12. We reviewed existing global innovation indices and explored the conceptual, methodological and practical issues that must be addressed. We draw three conclusions from our review.

First, one should proceed with caution when deriving policy, research or other implications from composite indicators. Before we can be confident of their implications for the comparative performance of countries or regions and establish benchmarks to underpin policy or other decisions, it is essential to understand how innovation indicators impact on innovation processes. This in turn requires indices to be underpinned by a clear and strong theoretical framework.

Second, there are a number of data issues which have to be addressed. To explore the dynamics and evolution of health innovation across countries through an index requires panel data (collected over time). While the availability of cross-sectional data (between countries) is fraught with difficulties, the use of panel data is even more so. Another issue is variation at the regional or local level. Policy makers are interested not only in their national scores, but in whether different regions in their country perform differently.

Finally, policy makers should be careful not to draw conclusions about the relationship between composite innovation indicators and other indicators of policy interest such as health outcomes. While it may be of interest to correlate innovation index scores with those of an index of health outcomes, we must always remember that correlation does not mean causality – introducing a new drug or device may well lead to better health outcomes, but an index will not tell us this.

We are now hoping to create a prototype index for a few countries. This involves investigating data sources and more work on what the index is measuring, for whom and for what purpose.

Anyone interested in finding out more should contact James Barlow at Imperial College Business School, j.barlow@imperial.ac.uk

James Barlow is a Professor of Technology and Innovation Management (Healthcare) at Imperial College Business School and a member of PIRU. His latest book, Managing Innovation in Healthcare, was published by World Scientific in January 2017.

1House of Commons Health Committee (2005) The Use of New Medical Technologies Within the NHS: Fifth Report of Session 2004–2005.
2Department of Health (2006) Best Research for Best Health: A New National Health Research Strategy: The NHS Contribution to Health Research in England.
3HM Treasury (2006) A Review of UK Health Research Funding.
4Strategic Implementation Group & Healthcare Industries Task Force (2007) Innovation for Health: Making a Difference.
5Department of Health (2007) Our NHS Our Future: NHS Next Stage Review – Interim Report.
6Department of Health (2011) Innovation Health and Wealth, accelerating adoption and diffusion in the NHS.
7Dattée B, Barlow J (in press) Multilevel organizational adaptation: Scale invariance in the Scottish healthcare system. Organization Science; Dattée B, Barlow J (2010) Complexity and whole-system change programmes. Journal of Health Services Research & Policy 15, S2, 12-18.
8The Health Foundation (2015) Shaping the Future. A Strategic Framework for a Successful NHS.
9Deloitte (2012) Innovation Indicators for Healthcare in Emerging Countries. Understanding and Promoting Innovation in Emerging Markets.
10PWC (2011) Medical Technology Innovation Scorecard. The race for global leadership.
11Accenture (2013) Measuring the Unmeasurable. A New Framework for Assessing Healthcare Innovation.
12Cravo Oliveira T, Barrenho E, Vernet A, Autio E, Barlow J (2017) Developing a Global Healthcare Innovation Index. PIRU Reports 2017-20. http://www.piru.ac.uk/publications/piru-publications.html