Transformational Change NHS Health Economy | FTI Consulting

UK Healthcare Solutions: Modelling Transformational Change in the NHS Local Health Economy

Healthcare & Life Sciences | Corporate Finance & Restructuring

March 30, 2017


Following the consensus achieved by the Five Year Forward View and the “front-loaded” Spending Review settlement, 2017 has emerged as a critical year for the NHS to achieve scale and pace in redesign.

New models of care and organisational forms are required to meet the financial and clinical challenges facing our health sector. The sector has been challenged to think beyond individual hospitals and CCgs, and local health economy (LHE) modelling is one key step to facilitating meaningful progress.

There is no “one-size-fits-all” LHE definition for modelling transformational change. The appropriate LHE to model will depend on how healthcare is delivered and the objectives that transformational change is designed to address. The LHE in any particular situation refers to the linkages between a population with healthcare needs, providers positioned to meet those needs (primary and acute healthcare, social care, and mental and behavioural health), and one or more funders of care delivery (CCgs, NHSe, local authorities, each with different commissioning geographies and remits). NHS England has defined 44 STPs (Sustainability and Transformation Plan) geographic “footprints” for place-based, multi-year plans that will drive sustainable transformation in health and care outcomes between 2016 and 2021. The NHS, however, recognises that these 44 STP boundaries will not be appropriate for all transformational planning in that appropriate LHE plans will need to sit above and below STPs to deliver transformational healthcare. For LHEs to maximise their healthcare delivery within a defined budget, it is paramount that healthcare decisions are supported by detailed underlying economic analysis around cohorts, diseases and costs.

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Key Contact

Susan H. Manning, Ph.D.

Senior Managing Director – Chief Operating Officer, Center for Healthcare Economics and Policy