"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

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.