This year promises to be both exciting and challenging for the global health and care sector. Governments worldwide are grappling with increasing healthcare demands, a shortage of skilled professionals, and rising treatment costs. Traditional efficiency and gatekeeping programmes have fallen short, prompting a shift towards integrated care models, localised and decentralised care, and a stronger emphasis on prevention. Technology and AI are set to play a pivotal role in this transformation.
Economic growth and a healthy workforce are intertwined, with universal healthcare seen as a key influence. However, it is a costly endeavour. While industrialisation and globalisation may have improved living standards, and medical advancements have extended lifespans, we are not living in better health. We have eradicated most transmissible diseases, such as polio and TB, only to replace them with diabetes, heart disease, dementia, and cancer — diseases associated with ageing, modern lifestyles, and widening income, social, and health inequalities. These factors affect where we live, our access to affordable food, housing, heating, education, jobs, support networks, and services. This results in an additional 17 years of living with a disability for those in the lowest 5% of neighbourhood deprivation, on top of their already shorter lives. If unchecked, this trend will continue, as evidenced by soaring obesity levels globally, even among pre-school children.
Research and innovation in medicine, AI, and ‘medtech’ to predict, diagnose, and treat poor health are remarkable, but costly. While treatment is essential, it is not the solution. Care systems are seeking ways to contain both rising costs and increasing demand.
The UK scene
Like other countries, the UK is grappling with this conundrum. The NHS has attempted several reconfigurations in pursuit of greater efficiency and better gatekeeping to manage demand and cost pressures. These efforts have failed primarily because they did not address the root cause of demand — health inequality caused by the social gradient linked to income. Therefore, the challenge is not simply about cost and demand control; it’s about reducing health inequalities.
The latest and most strategic response likely to succeed is the introduction of Integrated Care Systems (ICSs). Introduced in 2022, ICSs bring together health sector providers within a geographical area. Their mandate is to plan, shape, and deliver health services to meet their communities’ health needs. This decentralised, place-based model for healthcare is an exciting and long-awaited step in the right direction towards the holistic partnerships needed to reduce health inequalities.
The UK Chancellor’s (2024) Autumn Statement suggests that this place-based systems approach is here to stay, with significant fiscal support accelerating its pace and impact. This includes a £13.6 bn capital increase, and a clear signal of fiscal headroom to embrace technology, AI, and data, and to invest in the estate to increase capacity and performance. The future is there to shape.
The focus ‘on place, technology, and decentralisation’
Rather than reiterate well-rehearsed principles and imperatives of the need for greater efficiency and performance, we thought it would be useful to explore the Chancellor’s focus on place, technology, and decentralisation, and what this means for how we approach transformation. We do not offer answers — that is up to individual organisations. What we do offer is a challenge to perceived wisdom, custom, and practice, and encouragement to ask different questions to solve the pressures on the health and care system.
The Chancellor’s 2024 Autumn Statement clearly set out the trajectory for a decentralised, place-based economy with strong partnerships across public services, industry, and community, to address inequalities and drive economic growth. It recognises the variations in place that shape people’s health and wellbeing, and the services they need. It also anticipates that advancements in smart and medtech, robotics, Artificial Intelligence (AI) and Machine Learning (ML), emerging technologies, and innovations, will play a key role in reshaping efficient, affordable, and sustainable, frontline clinical services and shared services, without compromising on equitable access and quality. Examining these aspects in more detail helps set the scene for the type of transformation that is possible.
Strategic place shaping over time
First, there are 42 ICSs in England, established in July 2022. They are the centrepiece of the biggest legislative overhaul of the NHS in a decade.1 These ICSs cover populations ranging from 500,000 to three million people, making them vastly different in size, complexity, and other characteristics. They collectively face a financial gap of £4.5 bn.2 The Autumn Statement reiterates their strategic commissioning mandate to shift towards community-based services, and a lower-cost, preventative model through integration, as the name suggests.
Secondly, there is the metamorphosis of single-tier unitary authorities from a confusing, inefficient, and ineffective jumble of 317 upper, lower, metropolitan, and district authorities. This is the first reconfiguration in 50 years of local government. While it lags behind the NHS reform curve, its ambition is to simplify structures and bureaucracy, streamline services, and reduce costs. Each new council will have a minimum population of 500,000, creating the potential for future structural alignment with ICSs. This alignment makes sense, as social care and public health sit within local government, and services provided by councils cover 50% of the determinants of health and wellbeing.
The third entity is the new regional mayors, who will lead discussions on the importance of place, industry, jobs, and the economy — central tenets to health, wellbeing, and growth. As these players converge in search of greater efficiency and impact, it is likely that greater integration will follow. What happens in all aspects of society affects health.
With a lack of basic healthcare services in many places globally, and a general staffing shortage expected to reach 18 million by 2023,3 technology such as 5G, cloud, AI, and LLMs (Large Language Models — a type of AI that can mimic human intelligence), are playing an increasingly vital role in offsetting these challenges. The pace of ‘tech’ innovation, and its translation into healthcare, are exponential. Innovation can take years to become embedded unless — to paraphrase Plato — necessity demands it.
The ‘necessity’ created by the 2020 global pandemic introduced a new way of working with technology, and its role continues to grow. Doctors now routinely consult with patients remotely, diagnose conditions, review scans in high definition, and collaborate with clinical experts, in remote locations. 54% of patients with chronic diseases now accept remote healthcare via telemedicine, releasing over 30% of unnecessary health resources.3
Thanks to advanced modern technology, ‘remote’ does not mean out of reach, even in emergency response. VR glasses can provide clinical experts with the same view as being in the ambulance, support remote access to global surgical expertise for surgeon training, and, with robotics, allow remote surgery itself.
AI is accepted as a key technology. It is shortening screening times for drugs to one day, offsetting shortages of specialists who interpret echocardiograms to diagnose heart disease, and speeding up diagnosis by between five to ten times. It is also making hospital management systems smart, with open, connected digital platforms for real-time visual management of operations, resources, patient flows, bed occupancy, and medical device use, and can help management staff make informed decisions needed to underpin performance and outcomes.
Online services offer better and safer access, less wasted time, and lower costs. With chronic shortages of medical and nursing staff, solutions like these offer a way forward. However, to use them effectively, we need to understand the challenges in healthcare from multiple perspectives — patients, professionals, and management — and co-design care models that work. For patients, this means less time away from home and work to attend appointments, offering greater empowerment, and less disruption to day-to-day life.
Invest in technology proven to improve shared service coordination
For decades, a waste-versus-access trade-off has pervaded public sector coordination, with efficiencies sought through consolidation, shared services, and procurement consortia. It becomes more challenging to maintain these gains in a decentralised, place-based model.
The government is signalling support for tech innovation to solve this challenge, and encouraging the use of ideas from other countries ahead of the game.4 Drones, such as Zipline, have flown one million kilometres in Rwanda and Ghana, delivering much-needed supplies to remote areas. They now provide 35% of blood supplies for transfusions. India, Australia, Finland, and Ireland are following suit. In the GCC, medtech is increasingly central to healthcare, from smartphones to monitor heart rhythms, to pre-marital genetic screening.
In 2024, the UK Research and Innovation Future Flight Challenge funded its first national drone network in Scotland to transport essential medicines, blood, and other medical supplies, throughout Scotland, connecting hospitals, GPs, laboratories, and remote communities. Guy’s and St Thomas’ NHS Foundation Trust is currently trialling drone transport for blood samples to labs, cutting transport time to two minutes, and speeding up clinical decision-making.
The potential is enormous. An enabling policy environment would create a system for technologies such as medical drone procurement and deployment to bridge existing and future key coordination and supply chain gaps, and inefficiencies in the emerging place-based model.
The Chancellor’s focus on place, technology, and prevention, calls for a fresh approach to transformation. While efficiency, cost-effectiveness, and performance, remain core principles in delivering services, the emphasis is now on ‘system’ performance, optimal use of collective resources, and leveraging technology to offset staff shortages, reduce dependency on high-cost facilities, and optimise access to increasingly costly medical expertise and equipment.
Reducing demand, rather than gatekeeping to control demand, is the new watchword.
In this new context, we propose a new perspective on transformation: a shift in the problem statement, moving upstream towards prevention. This involves orchestrating change across partners through a maturity framework, and recognising that change is challenging — and choosing which challenges to embrace and how.
Change the problem statement
ICBs and Trusts are forecasting a potential NHS deficit of £4.5 bn for 2024/25, and collectively restricting spending by £8 bn to stay within budget and increase productivity by 2%.5 They also need to reduce a growing waiting list. Changing the problem statement seems at odds with such pressure, but is logical. Rather than chasing solutions to ‘reduce the burden’ on the NHS, we should change the question to ‘How do we reduce the need for health and social care?’ Same agenda — different lens.
Immediately, we are asked to look outwardly to partners as collaborators across the system to design pathways and actions that seek to empower individuals, shift the focus towards early intervention, and reduce the risk of lost wellbeing and independence. This approach encourages more self-management, the use of remote technology to advise and reassure, and more reablement therapy.
We know that this preventative lens triggers a focus on health-positive choices and actions by both individuals and clinicians. It encourages collaboration and multi-professional co-design of patient pathways. It shifts the focus of clinicians towards early intervention and reablement to reduce the risk of disease progression, and stimulates innovation and creativity.
When presented with a bottom-up resource model of what they collectively designed, teams self-adjust roles, skills, grades, customs, and practices. They configure models that promote independence, self-management, and empowerment. Including service-users in the design ensures that their experience and needs are central to shaping and streamlining services. Without fail, this approach reduces both costs and capacity needs by 50%, reshapes the workforce profile from acute-based nursing to community-based reablement therapy, and deploys technology to track clinical signs, advise, and support independence.
This approach has informed the national service framework for MSK (musculoskeletal) conditions, and shifted mental health services from acute to community settings. To illustrate the scale of impact possible, a redesigned pathway for frail elderly care identified £10 m in savings6 for one health and care system — extrapolating this, the potential savings could be £420 m across England’s ICSs.
Orchestrate change across system partners
The process of redefining the problem in the context of each place, and designing the ideal pathways to address local needs, requires system collaboration. Delivering the changes in a coordinated fashion across multiple system partners is also a collective responsibility, though likely to be more challenging.
There will be a need to adjust or dismantle professional and organisational boundaries, build new partnerships, merge teams, share resources, and replace, streamline, or relocate, with technology and reconfigured estates. It is also worth stating that form follows function, and future service configurations are likely to need a re-think of existing estates and NHP plans.
A collegiate agreement on what the future sustainable model looks like, along with a collective understanding of interdependencies, boundaries and redlines, responsibilities, and accountabilities to the whole, are essential success factors. Inclusivity and frontline stakeholder ownership of the design, as well as the celebration of delivery milestones, will strengthen new collaborations, build confidence and trust, foster openness and learning, accelerate transformation, and make hurdles easier to navigate.
Of course, well-structured programme planning, management, and governance accountable to the Board are essential. System delivery teams will need transparency and clarity on critical milestones, and when and how organisational and clinical roles, operating models, and target performance, will change over time, as illustrated in Figure 2. Strategic commissioning will need orchestration to fund services, pump-prime change, and incentivise performance. Transformation on this scale and reach is unfamiliar territory for the NHS.
A transformation maturity framework that tracks and assesses roles, behaviours, and capabilities, against performance and transformation milestones, will provide ICS partners with insights into their development needs as a collegiate system, and as individuals and teams.
Some choices will be hard and come with compromises and consequences. Having set our sights on a strategic goal, system partners need conviction from the top, and a leadership team that is clear and committed to its role, decisions, and the actions needed to achieve it.
It is hard to collaborate across traditional organisational and professional boundaries and share previously sovereign resources such as staff and excess capacity — but it is also hard to miss ICS savings or performance targets. It is hard to make an executive decision to close beds when ED is full, and new Urgent Treatment Centres and remote monitoring systems are having teething problems — but it is also hard to justify maintaining acute capacity for 40% of avoidable ED attendances. Hard choices, being bold, and having the mettle of a clear strategic rationale, are part of successful transformation.
Addressing health inequalities
It’s not just about the system; however, it’s about health inequalities. How do we reduce the overall burden of poor health? This burden is personal, and is influenced by a range of determinants that Professor Sir Michael Marmot discusses in several reports7 and lectures.8 The impact of housing, education, food, air quality, community, and secure well-paid jobs on health inequalities, poor health, and life opportunities for new generations, is well known.
These determinants are within the control of local government, policy, industry, and society. Once the local government reform and ICB reforms are in place, with a mayoral focus on place and industry, the opportunity to tackle these determinants should also come under the remit of a mature and evolving integrated care system — though its name may change by then. But the same principle remains — as the vortex tightens, keep changing the question towards what the system must do to reduce health inequalities.
Michèle Wheeler
Michèle Wheeler, the International Health and Life Sciences director at Lexica, has over 35 years’ experience managing and transforming health and social care services globally. She is an experienced board-level director with a clinical background as a nurse, having worked across acute, primary care, and mental health settings, as well as for the Department of Health and Social Care. In the private sector, Michèle has operated extensively in the UK and internationally across Asia, the Pacific region, and the UK overseas territory of St Helena in the South Atlantic Ocean. Her expertise spans developing and delivering over 100 projects valued at between £12 m and £5 bn across ProCure21-23, PFI, NHS LIFT, and other traditional contract forms
Karen Bryson
With over 20 years’ experience in health performance improvement, strategy development, and innovation, Karen Bryson, Transformation Expert adviser at Lexica, has successfully led transformations in the health, local government, and public health sectors. With a transformation leadership career in the NHS, she joined PWC’s fledgling health advisory team, and was pivotal in pioneering corporate restructuring in the NHS. Later, as a director at KPMG, EY, and xantura, her most notable innovations include Pathway Integration – the NHS merger pathfinder to secure viable inner-city services in northeast London, and data integration and risk analysis to inform service design and commissioning. Addressing inequalities as Deputy director of Public Health in Staffordshire, Karen introduced place-based commissioning and joint ventures with the energy industry, tapping satellite technology to support vulnerable households. She was also a core member of the international team awarded the framework for health system reform in Sudan
References
1 Dunn P, Fraser F, Williamson S, Alderwick H. Integrated Care Systems; what do they look like? The Health Foundation, online. 15 June 2022.
2 Lister L. ICBs tight-lipped on deficits and consequences. The Lowdown, online. Centre for Equitable Healthcare. 10 May 2024.
3 Hu K. These smart technologies are transforming healthcare. World Economic Forum online. 12 October 2021
4 Santhanam V. How drones could change the future of healthcare delivery. World Economic Forum online. 8 May 2020.
5 ICBs aim for £8 billion savings, risking NHS staff and delays. The Lowdown, online. Centre for Equitable Healthcare. 23 November 2024.
6 Elderly Frail Pathway Redesign, Staffordshire CC and NHS, led by Public Health, 2019. https://tinyurl.com/2ccywhra
7 Marmot M, Goldblatt P, Allen J et al. Fair Society, Healthy Lives (The Marmot Review). Institute of Health Equity, online. February 2010. https://tinyurl.com/ysfx4b2k
8 Kempen M. Health inequalities, children and young people — Professor Sir Michael Marmot. The Association for Child and Adolescent Mental Health. 20 June 2023. https://tinyurl.com/4hsubza2