Finding a cure for healthcare

Finding a cure for healthcare

How the independent sector can help the NHS to thrive at 75.

Even as we celebrate the NHS, we can’t ignore the opportunities to rethink how we address our ever-changing healthcare needs. If the government, NHS, independent sector and public all leaned in, we could achieve shorter waiting lists, better outcomes and more investment to help meet the nation’s needs together.

Steve Fergus

Head of Healthcare, Barclays Corporate Banking

75 years and counting...

The NHS is a cornerstone of British society and, rightly, a great source of national pride.

Our health service has come a long way since its inception 75 years ago to provide free-at-the-point-of-delivery, high-quality healthcare for all. It has had to continually evolve to meet new public health pressures and the ever-changing needs of an ageing population.

However, as we celebrate this much-loved institution, which touches all our lives in one way or another, we cannot ignore the realities of today. So, while the NHS has delivered countless examples of outstanding clinical innovation, is it time to rethink how a sustainable healthcare system works in the 21st century?

Understandably, these questions provoke strong reactions, particularly when it comes to the role of the private sector. However, through conversations with some of the leading independent sector stakeholders, we have set out to explore the key ways in which the independent sector and NHS could collaborate to improve the nation’s health outcomes. This raises lots of questions, but we hope the issues raised here are a useful stimulus to further debate.

The NHS in numbers

1.6 million patient interactions with NHS services every day in 2021/22 - reference 4
£19 billion in health and care services commissioned by the NHS in 2021/22 - reference 5
483,500 doctors and nursing staff in the NHS in November 2022 - reference 6
7.7 million people currently on NHS waiting lists- reference 1
8% of NHS staff vacancies unfilled - reference 2
£3 billion cost of NHS agency staff in 2021/22 - reference 3

Taking healthcare’s temperature

If a health service is constantly running at full capacity and utilisation, there’s no space to think about the bigger picture.

Paul Fegan

Senior Engagement Manager, Mansfield Advisors

Changing health needs

Over the last 75 years, societal shifts have, of course, led to significant changes in health needs, from increases in diabetes and cardiovascular disease, to greater awareness of mental health issues.

Within the next decade, more than a fifth of us will be over 657 and may need more complex care over longer periods of time. Responding to these changing dynamics is putting pressure on a system designed for different health needs.

Funding constraints

Research by the King’s Fund8 shows that the NHS is particularly successful in providing access and protecting the population financially from the consequences of ill-health. However, while it is adept at delivering certain services – for example emergency care – other developed countries tend to deliver better outcomes in terms of treatment for conditions like heart disease, stroke and cancer.

Austerity measures, compounded by the Covid-19 pandemic and ensuing economic turmoil, have had a severe impact on funding and driven waiting lists to unprecedented heights. The NHS is urgently in need of solutions for its ageing infrastructure, lack of beds and limited equipment, and ways to keep up with rapid advances in technology.

The workforce challenge

With nearly 1.45 million employees9, the NHS is Europe's biggest employer, yet still faces severe staff shortages to meet ever-increasing demand. Around 8% of posts are unfilled, with many staff leaving to seek better work-life balance, creating a cycle of increased pressure on the remaining workforce. Relying on recruitment from overseas is merely a short-term solution10.

This has led to an increase in use of agency staff, with costs rising by 20% in 2021/2211 year-on-year. These staffing challenges are further compounded by the current industrial action over the impact of staffing levels on patient safety, employee burnout and pay.

Health versus social care

The separation of health and social care from a policy and funding perspective over many decades has resulted in a mismatch between the two systems, with competing objectives and accountabilities acting as hurdles to truly integrated care.

The funding squeeze and under-resourcing of the care sector has led to high unmet needs, staff shortages, and services either struggling to provide the necessary care or closing, while there is debate about whether the latest reforms go far enough. These challenges exacerbate the barriers to addressing the care backlog.

The independent sector’s supporting role

We often have a narrow view of the private sector’s involvement with the NHS, but it’s actually quite extensive – and has been that way for a long time.

Paul Fegan

Senior Engagement Manager, Mansfield Advisors

8.4% of NHS finished consultant episodes in England provided privately. Ref 12
£6.2bn estimated market value of UK private hospitals sector in 2019 compared to total NHS budget of around £151bn. Ref 13
66% of ophthalmology finished consultant episodes provided in private hospitals funded by the NHS. Ref 14

A long-standing partnership

The independent sector already forms an integral part of UK healthcare, with many long-established contract frameworks under the NHS internal market system – from subcontracting to private hospitals, to lab and diagnostic imaging services, GP practices, opticians, dentists and pharmacies, and even equipment maintenance teams.

Focus on elective care

Independent providers play a key role in supporting the NHS through the delivery of some elective care treatments – which can potentially be instrumental in helping to reduce waitlists.

Focused on a relatively narrow range of specialities, this provides additional capacity for discrete care episodes. This is particularly the case for less complex procedures that can be carried out at scale (such as cataract operations and hip replacements), often at much lower cost than the NHS under current commissioning arrangements, while the NHS remains best placed to manage complex, multi-disciplinary, or chronic patient pathways.

Momentum for change

The government’s Elective Recovery Taskforce, set up in December 2022 to reduce NHS waiting lists and the post-Covid backlog, perhaps reflects growing recognition of the need for change. Made up of representatives from across the NHS, independent service providers, government departments and patient representatives, it looked at practical ways to maximise the independent sector's contribution to supporting the NHS. Its recommendations are for a system-wide response, offering patients greater choice of treatment and diagnostics either through the NHS or independent providers, but still free at the point of use.

Operating better together

While many cherish the founding principles of the NHS, there remains an opportunity to address today's challenges through greater collaboration – and perhaps a more open-minded approach to the role the independent sector can play in addressing them.

Changing the conversation

Given the independent sector’s already significant role in supporting the NHS, there is perhaps a need for a more open and honest debate that acknowledges the extent of its involvement and addresses the obstacles to a more effective partnership.

An important part of this is improving understanding of what the private sector can offer, and the relevant funding pathways, within the NHS itself. It also requires an acknowledgement of the mistakes of the past.

With general agreement that the NHS is best placed to provide urgent and complex care, is there a broader role for the independent sector in specific clinical areas to meet our future healthcare needs? Where can the private sector work in true partnership with the NHS to drive innovation? Does the independent sector perhaps need to work harder to show where this works best and demonstrate that it is not a threat to the fundamental principles of the NHS?

Taking the long-term view

An integrated planning approach that takes a more holistic and longer-term view would go a long way to improving our healthcare system’s ability to meet the nation’s needs. All stakeholders – including the independent sector – need to be involved from the outset. Surely there is an opportunity for independent providers to deliver much needed additional capacity or specialist centres of excellence for specific health needs to reduce elective waiting lists; however, this requires more certainty over long-term volume and funding.

Is there an opportunity for the independent sector to present a compelling offering for more complex needs based on evidence of better health outcomes? Does it need to be more ambitious about how it can support the NHS through managing the population’s health in the community, rather than managing the consequences of ill health in hospitals?

Rebuilding the workforce

The NHS workforce is its greatest asset and there is an overwhelming business and moral case for investing in it – putting the workforce front and centre, and empowering those closest to the issues.

The recently published NHS long-term workforce plan represents an ambitious cross-party agreement to increase staff numbers through training, apprenticeships and international recruitment, as well as considering how to make the NHS a better place to work, improve morale and retain existing staff.

In the near-term, against a backdrop of ongoing industrial action, the issues of pay and workplace burnout can’t be ignored – nor the cost of agency staff to fill vacancies. There is certainly a need for better data on why staff are leaving the NHS to address the retention issue.

Longer-term solutions require longer-term thinking. Are our training quotas still fit for purpose? Is there a role for the independent sector in training junior doctors? Could pharmacists be given a broader remit to help ease the burden on GPs? How could the NHS and independent providers share, rather than compete for, the same talent? How can they use staff more efficiently and effectively? Perhaps by enabling staff to move between providers and gain experience of different clinical areas more easily, depending on demand.

Supporting connected care pathways

Communication within and between organisations is key to delivering integrated care pathways and good patient outcomes. This requires a good understanding – at all levels – of services available, supported by the necessary systems, and a more holistic approach to planning.

Perhaps there is a wider role for the independent sector in managing pathways for chronic conditions, rather than discrete care episodes, to make them more seamless for patients.

Do we need to move away from the current tariff system towards a pricing model that better reflects the costs of managing a patient across the entire pathway? Is there a role for the independent sector to trial new approaches to connected care for specific vulnerable groups within the population? And how can med-tech help to provide a more seamless, single view of the patient?

Investing in the care sector

A strong social care system is essential to reducing pressure on the NHS and freeing up hospital beds. Substantial reform and investment in social care is required to rebuild the care workforce post-pandemic, keep up with current demand, and accommodate the future needs of our ageing population.

How can we replace the existing fragmented approach to care funding with a joined-up approach between the NHS, independent sector and local authorities? How do we promote careers in social care to attract new talent to the sector? And how do we support the investment required to build new care home capacity?

Where do we go from here?

Our conversations with various market players have clearly demonstrated that everyone wants the NHS to continue to be successful. In fact, we have been struck by the overwhelming support for our health service’s fundamental principles. That said, for it to survive – and thrive – for the next 75 years and beyond, change is required.

It is generally recognised that the independent sector plays a crucial role within UK healthcare – so developing a plan that allows it to better support the NHS with essential skills and solutions must surely be part of the solution.

Key takeaways

  • Collaboration and improved communication between everyone involved are key: avoiding a ‘them and us’ approach would help improve trust and reduce conflict at all levels.
  • Creating a shared longer-term strategy should enable resources and staff to be used across both the public and private sectors more effectively.
  • For the NHS to continue its essential work long into the future, all stakeholders need to be more focused on outcomes.

Of course, none of this is easy. But, provided the NHS and independent sector support each other along the way – and, in turn, are supported by other stakeholders within the wider health ecosystem – anything is possible.

Playing our part

Our Barclays Corporate Banking healthcare industry specialists are proud to say that we play a supporting role for many independent sector businesses. Whether it’s assisting with growth strategies, providing funding to develop facilities that will support the NHS, helping with working capital, or providing payment facilities, we’re here to facilitate the success of UK healthcare.

Success in action

Navigating the complexities of care

Navigating the complexities of care

Exploring ways in which the NHS and independent sector can provide holistic, joined-up care.

Fit for the future

Fit for the future

How the independent sector and NHS work better together to improve patient outcomes?

Your next steps

Industry expertise


Keep your finger on the pulse of the latest industry trends.  

Contact us

Get in touch

To discuss your business requirements and how Barclays can support you, contact us today.


Corporate Banking Solutions

We provide a complete spectrum of solutions to enable your business to transact and trade easily, manage risks efficiently and finance its plans for growth.