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Opportunity or Threat?

An investor’s view on the impact of Covid-19 by health and social care investment expert Boda Gallon.

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Before the Covid-19 pandemic, people from all sectors and political backgrounds accepted that the current health and social care system wasn’t fit for purpose, nor was it sustainable.

It’s an organisationally, culturally and financially fragmented system at odds with itself. It lacks whole system integration, and is often frustrating for people with neurological conditions and their families as they navigate their new lives after hospital.

It’s a challenging and conflicted maze for neuro-rehab professionals and providers delivering the best possible services and outcomes for patients and their service commissioners.

NHS Strategy has been in place for several years, and has attempted to address many of these issues. As part of this strategy, Sustainability and Transformation Partnerships (STPs) have been created to bring local health and care leaders together to plan around the long-term needs of local communities across England.

In some areas, STPs have evolved to become Integrated Care Systems, a new form of closer collaboration between the NHS and local councils. The NHS Long Term Plan states that all of England will be covered by an integrated care system by 2021, replacing STPs but building on their good work.

Guidance clearly acknowledges that the independent sector needs to play a key role in helping individual footprints meet the requirements for STPs and ensure the plans are effectively delivered. The support required from the independent sector was broken up into the main pillars of the three Cs: capital, capacity and capability.

  • Capital: helping to access and secure external investment
  • Capacity: providing additional, flexible capacity to meet demand and patient need
  • Capability: enabling learning and dissemination of good practice from independent providers.

However well-intentioned and essential this opportunity is for the independent sector, the NHS and social care, it has been perceived as a threat, primarily due to the significant cultural barriers existing between and within sectors.

The perceived threat of the NHS being privatised has generated significant resistance, with many fearing to have care and rehabilitation delivered for profit.

Significant commissioning barriers and budget conflicts still exist along patient pathways, blocking service integration and improved patient outcomes. It’s no surprise, then, that social care is still considered a ‘Cinderella’ service; a poorly funded, ticking timebomb that’s been swept under the carpet for future governments to address.

The impact of the Covid-19 pandemic, however, has been multi-layered.

Health and social care has been hit hard, but everyone across the system has pulled together. Private and NHS providers have collaborated to scale-up services and support patient flow and bed capacity.

Trust has been deepened, barriers have been broken down, and relationships and trust have been built.

This time has demonstrated the importance of collaboration, how the independent sector complements the NHS, statutory and third sectors, and how they shouldn’t be perceived as being in competition with each other.

There has been even more public goodwill for the sector, contributing to an enhanced public profile and significant support in the Parity of Esteem for the social care sector and its workforce. Hopefully, there is now the political will required for transformation and integration of the whole sector.

There have, however, also been many challenges emerging from Covid-19 for independent sector providers. Costs have significantly increased, and services have been challenged by staff shortages and the initial search for PPE. There have been issues delivering hands-on support for some services, and, in turn, generating income.

Regulator advice has been slow and fragmented, with the future still uncertain, and the various organisations designed to support the system often weighing it down.

Primary care often stopped supporting social care, leaving many providers to deliver services as best they could. Government funding for social care providers has been very slow or non-existent, with funds held up in local authority bottlenecks.

Residential service providers have been forced to address the perception that clients and workers haven’t been following government guidance around social distancing within their services. In conflict with long-term NHS and social care strategy, there has been calls by some for a National Care Service.

From an investment perspective, this uncertainty has led to many taking a breath to assess the situation. There have been delays in progressing deals, and the full due diligence required couldn’t progress under lockdown conditions.

However, health and social care providers have demonstrated incredible resilience in the face of extreme adversity and have remained operational in the face of a global pandemic while other sectors have struggled.

As a result, health and social care is now very attractive to investors looking for long-term income, with many already looking for new opportunities.

This will probably lead to existing investment funds redirecting an extra percentage of their funds into the sector, and several new investment funds entering the market. Values are already holding up well, despite the wider economic pressures, with envisioned increased demand potentially driving values upwards.

Residential and community services operating within the specialist health and social care marketplace have been impacted far less than elderly care, and as a result, are an even more attractive proposition to potential investors, providing an opportunity for specialist care organisations to review their plans and potentially take their businesses to market for a potential exit.

This increased interest in deals and funding should hopefully drive creativity, opportunity, competition, productivity, and efficiency across the sector, delivering positive change and improved services for patients, their families and their professional support teams.

In the face of apparent adversity, uncertainty and a gloomy economic outlook, there is a positive outlook for investment, service development and redesign within neuro rehab and the wider specialist healthcare marketplace. This positive outlook, however, comes with a need to embrace change, break down cultural barriers and focus on opportunity planning, which is much easier said than done.

So how can proactive service providers respond to Covid-19 to maximise impact and the value they provide? How can people reposition from fighting fires to being ahead of the curve in the new normal?

We will be exploring this in future on NR Times, looking at the political will for change; disruption in the system to create new partnerships that embrace fundamental change; delivering different ways of working; new models of care; service flexibility, and responding to the hidden waiting lists and pending demand required to support the NHS.

Hopefully, this article will help stimulate some online debate in advance. Please see www.bodagallon.com for my social media profiles.

Boda Gallon is a health and social care consultant. You can contact him at [email protected].

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