Sean Sullivan (below right) is one of the UK’s leading business transformation specialists with a strong reputation for tackling challenging healthcare assignments. We asked him to look into his crystal ball and predict what lies ahead for the sector
Sean Sullivan gained national recognition as Turnaround Practitioner of the Year 2014 due to his work for Castlebeck – the owners of Winterbourne View, the private hospital near Bristol that was forced to close after a BBC TV Panorama programme in 2011 revealed widespread abuse of patients.
This is alongside his other accolades, including those from the Institute for Turnaround.
Sean works with both private and public sectors, including investors and lenders. We caught up with him in London and asked him to look into his magic crystal ball and give us his business forecasts for healthcare in 2015.
Short term: next three to six months
No service provider can stay at the zero price increase plateau they have been on. Over the New Year and certainly by April 2015, we will see a slew of price increases from the private sector into the NHS and local authorities: 2-4% looks likely.
With greater than 50% of NHS trusts – both foundation trusts and trust development authorities – now facing stressed situations, expect to see your own NHS trust exert downward pressure over an ever widening range of situations to keep on track with both financial and operational targets.
When it comes to public and private sector financial and operational restructuring, beware the ever-growing army of well meaning, but unqualified turnaround wannabes who are having a go at grappling with inexperienced hospital clients.
No special pleading here, but there is nothing wrong in asking for their bona fides.
Longer term: through to 2016
Coming to a lender for your business soon: a softer, more cushioned approach to dealing with the fall-out from covenant breaches and repayment failures. Banks will be increasingly seeking to actively encourage client transformation rather than the more traditional threat of waving a foreclosure notice.
Why would the above point be of interest? Well, if you or your business has debt of any size and with the Bank of England base rate being static at 0.5% for all this time, any upward interest move after next year’s election may cause some pain.
Two interest rate hikes may start to prove fatal for ‘zombie’ entities hanging on with whatever appendages they have.
Expect to see a number of exits – or at the very least some reworking of debt – by those in this category unable to withstand a return to more normal interest rates.
Expect upwards pressure on wages. If the annual NHS wage increment under the NHS’s Agenda for Change and the Knowledge and Skills Framework do not do it – and the NHS pension can be substituted – then prepare for an ever increasing number of nursing and paramedical staff choosing to move over to the private sector.
By this time, we should be seeing a significant increase in private GP-owned and run walk-in GP practices on the High Street with £50-£120 per consultation and minor surgery fee range. GMS and PMS GPs, do you see yourself here?
We should, by this stage, be seeing a result in all the speculation that US investors are focusing on the UK healthcare market with a couple of purchases coming to realisation, possibly at either ends of the quality spectrum.
Those involved in aspects of providing residential care who consider themselves at risk of exposé by secret filming will be looking to install their own CCTV to head off trouble at the pass as quickly as they possibly can. This will, of course, have to be limited to public areas: receptions, dining, sitting rooms and corridors. As we all expect, stories of this flavour are not finished yet.
Sooner or later
Somebody is going to see the wisdom in funding a meaningful dementia service in the UK that is more than merely ‘elderly care plus’, making full use of the fast-advancing technology and understanding the concept of being fairly paid for a service fairly delivered.
The increasingly sorry affair that is domiciliary care contracting will finally find its real value to society with more realistic expectations for provision of services, time with users and travelling arrangements for carers.