- The global Coronavirus pandemic is expected to accelerate digital transformation in healthcare
- With capital in the healthcare sector even more constrained as a result of the pandemic, smart financing is essential to enable accelerated digital transformation
- New research from Siemens Financial Services (SFS) estimates the level of funds potentially liberated by smart financing – rather than being ‘frozen’ and illiquid if applied to outright technology purchase
With the Coronavirus pandemic continuing, and digital solutions becoming more crucial to the delivery of health services; experts are predicting that smart financing solutions will become central to ensuring continued innovation on the NHS frontline.
Siemens Financial Services (SFS) has released a new insight study which tracks the pressure on resources in healthcare around the world using its Healthcare Value Indicator model.
The paper, entitled Easing the Pressure: Working Smarter in the Healthcare Sector, 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.
The research evaluates the improvements being achieved in overall patient outcomes, and then combines these factors to give a comparative picture of value delivery in healthcare across 14 countries, including the UK.
While the value of digital healthcare is widely understood, limited capital expenditure budgets represent a significant hurdle for investment
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, the report states.
It says: “Escalating demand for healthcare – particularly for chronic conditions – means that focusing simply on symptomatic treatment is rapidly becoming unaffordable.
“Now, health authorities are focusing on creating healthier societies to contain and reduce healthcare demand.
“Investment is being targeted toward mobile diagnostics to communities to help spot signs disease before it develops.
“The goal is to make healthcare systems sustainable and affordable long into the future.”
However, to create healthier societies in this way requires an upfront investment in modern, usually digital, technologies that can help to spot disease indicators and prevent the need for more-costly treatments.
Investment in diagnostic efficiency and therapeutic productivity is also required to make clinical treatment more effective and to contain costs when, and where, therapies are required.
But the NHS does not have this capital, particularly in the light of the increased pressures brought about by the Coronavirus pandemic.
And this is where ‘smart finance’ can play a key role.
The report states: “In a world that will be experiencing the economic aftershocks of the global pandemic for some considerable time, capital remains very constrained – both for public and private organisations.
The goal is to make healthcare systems sustainable and affordable long into the future
“Healthcare systems around the world have been experiencing shortages in capital expenditure budgets for some time, and authorities have widely acknowledged that the required investment simply cannot be afforded out of the public purse.
“Harnessing private sector capital is therefore essential to healthcare’s transformation and its underlying investment in new-generation technology – especially at a time when the pandemic has placed even greater pressure on already-stretched systems.”
And it states: “The most-effective smart financing arrangements tend to come from specialist financiers who understand the ways healthcare organisations work, the technologies they deploy, and the likely real-world benefits that technology investments will produce.
“This specialist knowledge enables the finance provider to flex and structure financing arrangements and periods so that they are truly sustainable for each healthcare organisation, aligning payments with the operating and clinical improvements gained.”
Smart financing can be used in a number of ways, including modernising and upgrading equipment, financing improvement projects, and implementing smart building transformation
But what are the key financing techniques that UK health trusts can take advantage of?
- Modernising and upgrading technology:Smart financing makes equipment and technology acquisition more financially sustainable, spreading payments and aligning them with the benefits received
- Financing whole projects:Single pieces of equipment usually involve a whole raft of associated costs, such as setting up the buildings or facilities that house them. Smart finance, in the form of project finance or managed service agreements, makes these investments financially sustainable and embraces all costs in one financing agreement
- Maintaining liquidity and flexibility:To achieve value delivery in healthcare, the right funds need to be available at the right time. Smart finance offers a range of cash flow management tools to achieve this, covering short-term loans, invoice finance, even transition arrangements that ensure organisations are not paying for a new system or facility until it becomes operational and begins to deliver value
- Financing healthcare technology sales: Healthcare organisations have a wide supply chain of product and technology providers. Often, the point of need for new equipment comes at a time when available funds are under pressure from other urgent requirements. These supply chains benefit from having embedded, integrated financing options. These offer smart financing tools to speedily optimise the process of managing working capital and cash flow when acquiring urgent technology upgrades
- Implementing smart building transformation: Healthcare systems are under intense pressure to achieve operating cost efficiencies and smart, digitalised hospitals, which use technology such as touchless controls, distanced temperature measurement, and remote buildings management, have been seen to cope better with the pressures of a global pandemic. By leveraging smart finance solutions, healthcare organisations are able to fund infrastructure plans, simplify debt structures by refinancing and, ultimately, provide for financial flexibility
Chris Wilkinson, spokesman for Siemens Financial Services UK, said: “Not only does smart finance make new-generation equipment and technology accessible; it also liberates capital expenditure which would otherwise be ‘frozen’ in outright purchase of technology.
Harnessing private sector capital is essential to healthcare’s transformation and its underlying investment in new-generation technology – especially at a time when the pandemic has placed even greater pressure on already-stretched systems
“By using financing arrangements, these funds remain liquid and available for other urgent and tactical needs.”
He adds: “Healthcare systems around the world are under greater pressure than ever to transform care delivery.
“And, while the value of digital healthcare is widely understood, limited capital expenditure budgets represent a significant hurdle for investment.
“Smart finance can help healthcare management to unlock capital and realise sustainable digital transformation projects.”