NHS Trusts need to be able to work with private sector firms to find alternative finance solutions when it comes to equipment finance and leasing, says Philip Green of Solutions Asset Finance.
There’s no question that the NHS finds itself under significant pressure in the fight against Covid-19, with the so-called ‘third wave’ continuing to hit hard and lockdown 3.0 bringing little respite so far in January.
The demands of this pandemic have been felt throughout 2020 but at this time of year, the impact is particularly severe on the UK’s health service as the winter months bring an increased demand for critical services. Recent reports described the National Health Service (NHS) as facing a “triple whammy” with Covid-19 to contend with, on top of a treatment backlog and reduced capacity.
For suppliers working directly with the NHS, it would be easy to assume that demand is high right now, but in reality, the situation is much more complex. With mounting pressure on healthcare services, the NHS will need to turn to the private sector for help and support, so suppliers must be ready.
Finance companies understand that finding capital is a perennial problem, which is why flexible and creative funding solutions are essential for those wanting to do business with the NHS.
NHS equipment finance
A study released earlier this month by the Health Foundation, a charity, has laid bare some of the huge issues facing non-Covid care, with a backlog of almost 5 million people needing NHS treatment.
Referrals for routine hospital care were said to have dropped by a third between January and August this year, and almost five million fewer referrals in 2020 for treatment for things such as hip, knee and cataract surgery.
After the first peak we witnessed earlier this year, huge efforts were made by the NHS to reopen services and start to return to some kind of normality. But the reality is that very little time between that and the second wave means that the number of delayed routine procedures has continued to rise.
Tim Gardner, who co-wrote the report for the Health Foundation, warned of a “rising tide of unmet need that will have a significant impact on people’s health if a sustainable solution is not found”.
The problems facing the NHS have been well documented, but the path to a sustainable solution is much less clear.
When it comes to NHS funding, a set amount of capital is allocated to individual Trusts across the country. Typically, this will be used to help solve pressing issues, such as immediate building works or infrastructure repairs. Within each Trust, various departments must bid on this funding, meaning that it can be very difficult to secure the money each area requires. This is particularly true when it comes to purchasing new equipment.
While there have been some big headlines about increased funding and budgets for the NHS, based on our experience a Trust needs an average of five to ten times more funding than is allocated each year. Therefore, using this capital to finance a new facility, or expand an existing one, can take several years to be rubber-stamped.
The complex processes surrounding healthcare funding can also leave Trusts with no way to replace ageing equipment, introduce new facilities or fund anything that is not considered an immediate threat to the running of a hospital. It’s clear that right now, treatments not related to Covid-19 have had to fall down the priority list, but while that happens the backlog continues to increase, presenting an ever-greater challenge.
Where this is the case, NHS Trusts need to be able to work with private sector firms to find alternative finance solutions. The option to work outside of pre-agreed capital budgets and plan better for the future must be on the table, otherwise, a quote or proposal runs the risk of being tied up in red tape with longer delays than may be necessary.
At a time when getting agreements over the line is more important than ever for suppliers, offering more than a standard capital purchase option can increase conversion rates and help to strengthen relationships with customers.
NHS alternative finance: equipment finance
When NHS Trusts know they need additional funding – whether it be to source new facilities, equipment or something else entirely – they can and should be able to turn to the private sector. Capacity issues are only going to worsen as the pandemic continues and, with the UK’s ageing population well documented, private finance agreements can help to prepare hospitals for what’s to come.
Flexible finance solutions could act as a lifeline for Trusts that need additional facilities or medical equipment as soon as possible. Utilising these alternative funding methods is the best way to keep up with an influx of Covid and non-Covid related patients, while also making sure that the backlog of other procedures remains a high priority.
These funded solutions are supplied by independent companies that sit on approved NHS frameworks, such as NHS Supply Chain, meaning they are fully compliant and understanding of NHS procurement procedures.
Having been involved in supporting suppliers working with the NHS, there are many complexities to consider. Working with an approved finance provider can ensure the process is managed end-to-end by trusted and understanding partners that are well-versed in public sector funding.
Finance providers can also offer tailored solutions to suit a Trust’s individual needs, providing appropriately structured funding arrangements that amalgamate the cost of a new facility, along with equipment hire and ongoing maintenance costs, into one affordable monthly fee, for example.
Tailored funding such as this offer one solution for Trusts looking to expand capacity where they don’t have the capital upfront.
Many procurement projects are delayed or even cancelled where a need exists, but capital is unavailable. Offering compliant alternatives to outright capital purchases can support the NHS in delivering the things that are needed most and helping Trusts to plan longer term.
All eyes continue to be on the pandemic, yet the stark reality is that Covid-19 has not eradicated the need for other treatments to be undertaken. Instead, the demand for services and equipment has simply had to shift to help frontline services and key workers combat the virus.
Delayed procedures must still go ahead along with the procurement of vital new equipment, the government has made it clear it does not want to see procedures or treatments postponed further as they were earlier this year. Trusts still need the equipment, the capacity and the facilities to make this a reality.
More education, and greater awareness, is needed around the collaboration between the NHS and private sector in this area because these solutions will help support the capacity crisis. Speaking about the report from the Health Foundation, Tim Gardner also said: “There is no silver bullet – addressing these issues will take time, money and determination.”
There’s clearly a crucial role that funders can play in helping to tackle the problems. The NHS needs all the support it can get to provide world-class care right now, and funders and suppliers must step up to the plate.
Philip Green is the commercial director at Solutions Asset Finance, a UK provider of equipment finance to the private and public sectors