"Innovation" is an NHS buzzword. It shouldn't be.

Martha Gill's Irrational Animals column.

“Innovation” has been an NHS buzzword for quite some time. It’s how they think they are going to make money. The word peppers Andrew Lansley’s sentences and appears on every NHS website. It turns conference speeches into tongue twisters and makes job titles too long to fit on to name badges. But let’s cliché this down. Being innovative is like being a lady. If you have to tell people you are . . . you  aren’t. The NHS isn't.

Not that promoting innovation is a bad aim. One bright idea, one new drug and you can potentially generate billions. This is the thought in the minds of the policymakers who have directed several taxpayer billions to this end.

But here’s the problem. A great deal of the money has gone towards creating “facilitatory groups”, such as the National Institute for Health Research – boards that manage the interaction between NHS employees with the new ideas, and the companies that might want to invest in them. Yet the interaction is an unhappy one. The inventive employees must now fill out a vast amount of paperwork and jump over many more hurdles than they used to. The boards are large and unwieldy, absorb a huge amount of capital and are made up largely of ex-nurses, inexperienced in business and, by training, highly risk averse.

Being unwilling to take risks is all very well in patient care but it can lead to utter stupidity when it comes to investment decisions. This was perhaps best demonstrated in 2006 by the US economists Uri Gneezy and George Wu, in one simple, cruel experiment.

Participants were asked to state how much they would pay for a $50 book token, a $100 book token, and to take part in a lottery in which they would win one or the other. It turned out that on average they were willing to pay $45 for the $100 token, and $26 for the $50 token.

So far so predictable. But then, in the lottery, things became a little uncertain and the participants started acting ridiculously. Given a 50 per cent chance of winning the more expensive token and a 50 per cent chance of winning the cheaper one, subjects were only willing to pay an average of $16. This was a situation where the worst possible outcome was getting the less expensive book token, but they valued it less than one in which they were guaranteed to get that token. Madness. Unless people are experienced in business, the smallest whiff of uncertainty can completely unsettle them.

Selling out

But even when these inexperienced NHS boards do take a risk on an idea, they simply don’t have the capital to protect it properly. The new drug or surgical device is therefore sold off at a very early stage of development, relatively cheaply, to private companies. If it turns out to cure cancer, it is the that company profits, not the NHS.

Far from being a profit-generating “centre for innovation”, then, the NHS has become a feeding ground for lean, mean American companies who cherry-pick the best ideas and capitalise on the revenue. It’s time for the NHS to take a lead from the private sector where it counts. They need to stop investing in “facilitators” and start investing properly in ideas. That’s where the money is.

Photograph: Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

This article first appeared in the 23 July 2012 issue of the New Statesman, Israel: the future

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Why it's far too early to declare Ukip dead

The party could yet thrive if Brexit disappoints those who voted Leave.

"Nothing except a battle lost can be half as melancholy as a battle won," wrote the Duke of Wellington after Waterloo. Ukip can testify to this. Since achieving its founding aim - a British vote to leave the EU - the party has descended into a rolling crisis.

Theresa May's vow to pursue Brexit, and to achieve control of immigration, robbed Ukip of its political distinctiveness. But the party's greatest enemy has been itself. Its leader Paul Nuttall did not merely lose the Stoke by-election (despite the city recording the highest Leave vote), he self-destructed in the process. Contrary to his assertions, Nuttall did not achieve a PhD, was never a professional footballer and did not lose "close personal friends" at Hillsborough. Ukip's deputy Peter Whittle pleaded last weekend that voters needed more time to get to know Nuttall. No, the problem was that they got to know him all too well. A mere three months after becoming leader, Nuttall has endured a level of mockery from which far stronger men would struggle to recover (and he may soon be relieved of the task).

Since then, Ukip's millionaire sugar daddy Arron Banks has threatened to leave the party unless he is made chairman and Nigel Farage is awarded a new role (seemingly that of de facto leader). For good measure, Farage (a man who has failed seven times to enter parliament) has demanded that Ukip's only MP Douglas Carswell is expelled for the crime of failing to aid his knighthood bid. Not wanting to be outdone, Banks has vowed to stand against Carswell at the next election if the dissenter is not purged. Any suggestion that the party's bloodlust was sated by the flooring of Steve Woolfe and Diane James's 18-day leadership has been entirely dispelled.

For all this, it is too early to pronounce Ukip's death (as many have). Despite May's ascension and its myriad woes, it has maintained an average poll rating of 12 per cent this year. This is far from its 2014 zenith, when it polled as high as 25 per cent, but also far from irrelevancy. Incapable of winning Labour seats itself, Ukip could yet gift them to the Conservatives by attracting anti-Tory, anti-Corbyn voters (in marginals, the margins matter).

Though Theresa May appears invulnerable, Brexit could provide fertile political territory for Ukip. Those who voted Leave in the hope of a radical reduction in immigration will likely be dismayed if only a moderate fall results. Cabinet ministers who boasted during the referendum of their desire to reduce immigration have already been forced to concede that newcomers will be required to fill vacancies for years to come. Ukip will be the natural vehicle for those aggrieved by Brexit "betrayal". Some Leave voters are already dismayed by the slowness of the process (questioning why withdrawal wasn't triggered immediately) and will revolt at the "transitional period" and budget contributions now regarded as inevitable.

The declarations of Ukip's death by both conservatives and liberals have all the hallmarks of wishful thinking. Even if the party collapses in its present form, something comparable to it would emerge. Indeed, the complacency of its opponents could provide the very conditions it needs to thrive.

George Eaton is political editor of the New Statesman.