NHS trusts face cash management challenges, but there are a number of tools, including asset finance, that can help, according to Penny Pinnock, Sales manager for healthcare and the public sector at Siemens Financial Services (SFS)
Health trusts still need to invest in buildings and equipment, so are turning to smart finance specialists to enable them to make improvements with minimum capital expenditure
NHS trusts will face many challenges in the coming months.
Mandatory operational data collected from all NHS trusts between 1 April 2019 and 31 March 2020 indicates a growing financial strain on services, even before the first UK COVID-19 lockdown.
This includes an increase in the total costs of running the NHS estate, and a £9billion backlog.
The pressures of the pandemic are made even more severe by a lack of funding and issues with failing or outdated facilities and equipment.
A report from NHS Providers states that old and outdated equipment and buildings hinder their ability to increase capacity and respond to the current demands of the crisis.
And this has led to a significant increase in the use of private sector investment across the estate to invest in new equipment and buildings, as well as improving existing facilities.
A report from the Independent Review of Diagnostic Services for NHS England notes that: “To deliver the increase in diagnostic activity required now, and over the coming years, and to provide safe, patient-centred pathways for diagnostics, new service models are needed.”
And it says that these ‘will require major investment in facilities, equipment and workforce, alongside replacement of obsolete equipment’.
The report also calls for the establishment of community diagnostic hubs (CDHs).
Though pressures on NHS estate show no signs of easing, trusts are still committed to transforming care delivery, expanding precision medicine, digitalising healthcare, and enhancing patient experiences
Such sites would provide centres for cancer, cardiac, respiratory and other conditions that would increase productivity and reduce exposure to COVID-19.
There is a major need to expand diagnostic services and CDHs can relieve the pressure on acute hospital sites by helping to accommodate this.
Recourse to intelligent finance is a key component to transforming NHS services and responding to mounting pressures.
A new insight study from Siemens Financial Services (SFS) tracks the pressure on resources in healthcare around the world and acknowledges the potential impact of the pandemic on accelerating digital transformation in the sector, adding to pre-existing pressures to deliver more-efficient, effective, preventative medicine.
Value is essentially delivered by ways of working, clinical pathways, and technologies that empower healthcare organisations on their journey towards expanding precision medicine, transforming care delivery, improving patient outcomes and experiences, all enabled by digital transformation.
And smart finance is needed to make digital transformation happen in a financially-sustainable way.
Not only does smart finance make new-generation equipment and technology accessible; it also liberates capital expenditure which would otherwise be ‘frozen’ in the outright purchase of technology.
New service models are needed to deliver the expected increase in diagnostic activity needed in the UK, according to an Independent Review of Diagnostic Services for NHS England
By using financing arrangements, these funds remain liquid and available for other urgent and tactical needs.
Specialist technology finance solutions, such as transition finance, technology upgrade, and pay-for-outcomes options are now coming to the fore, which allow NHS trusts to invest in new technology without having to commit large sums of capital.
Pay-for-outcomes arrangements, such as lease agreements which deliver fixed monthly payments over the financing period, or Managed Service Contract arrangements that guarantee an agreed level of equipment uptime, are increasingly popular.
Such financing solutions spread the cost of the technology over an agreed financing period, with payments arranged to align with the expected benefits of the use of the technology over time, such as improved operational efficiency.
Not only does smart finance make new-generation equipment and technology accessible; it also liberates capital expenditure which would otherwise be ‘frozen’ in the outright purchase of technology
By removing the need for a large initial outlay, finance arrangements like these can help improve cash flow and working capital.
Additionally, they have the potential to incorporate other costs such as installation, as well as introducing the flexibility of future affordable technology upgrades, in line with technology developments.
Such tailored financing packages tend to be offered by specialist healthcare financiers that have an indepth understanding of medical technology and its applications.
They understand the profound impact up-to-date equipment, technology and facilities can bring to the daily operation and can expertly evaluate any associated risks.
They are, therefore, more inclined and more able to create customised financing packages that fit the specific requirements of each individual organisation – for instance by flexing the financing period to suit the customer’s cash flow needs.
This contrasts with the standard financing terms usually available from generalist financiers who often lack technical expertise or a thorough understanding of the healthcare sector.
Financing solutions spread the cost of the technology over an agreed financing period, with payments arranged to align with the expected benefits of the use of the technology over time, such as improved operational efficiency
Siemens Financial Services works with Siemens Healthineers, as well as other technology vendors, to provide cost-effective financing solutions for a wide variety of medical technology and equipment, enabling healthcare organisations to access the solutions they need without having to commit precious capital budgets.
Though pressures on NHS estate show no signs of easing, trusts are still committed to transforming care delivery, expanding precision medicine, digitalising healthcare, and enhancing patient experiences.
And, while cost savings are often a welcome part of these changes, making the initial investment can be a challenge so specialist finance can provide the necessary assistance for both equipment acquisition and ancillary costs, enabling NHS trusts to embark on projects or upgrade essential equipment without tying up valuable capital.