How new NHS modernisation bill could shape future for UK healthcare sector

The Health Bill, which had its second reading in Westminster earlier this week, represents a major reset of NHS governance, shifting responsibility for how the health service in England operates at a local and national level.It also marks a re-centralisation of strategic control alongside operational integration at local level, with implications for commissioning, market access and data infrastructure – and significant implications for those operating in the healthcare industry in the UK.

What the bill does

The primary impact of the new legislation will be the abolition of NHS England, the arm’s length body overseeing health care in England. As a result of this, the functions of NHS England will be split between a series of new integrated care boards (ICBs) and the Department of Health and Social Care (DHSC). This will mean the ICBs gain expanded powers, but with much stronger direction – and control – from central government over how that will be implemented.

Alongside that, the big headline has been around the creation of a single patient record – a digital conjoining of patient data from various disparate sources into a single, integrated record which would prevent the need for patients to need to repeat information to different healthcare providers, and ultimately be accessible by patients themselves through the NHS app.

Other changes include a series of wider structural and policy changes to the NHS, such as abolishing integrated care partnerships, giving the Health Secretary much broader powers, abolishing Healthwatch England (HWE) and Local Healthwatch (LHW) in their current form to replace them with a patient experience directorate within the DHSC. It also abolishes the Health Service Safety Investigations Branch, transferring its duties into the Care Quality Commission instead.

What does this mean for health sector firms?

While the legislation is focused on the NHS structures, the implications of the bill will likely be felt across a much broader range of fields.

Private healthcare and outsourced providers

For those working in the private healthcare sector, or in providing outsourced services, there are likely to be significant impacts on how commissioning responsibilities change under the new regime.

The bill grants extra powers to the independent care boards and a broader sense of governance control to DHSC, which will gain the power to be able to cap day-to-day spending limits on NHS Trust, appoint foundation trust boards, issue directions to ICBs regardless of performance, and may shift care provision between public and private sectors depending on whether or not doing so is in the interest of the NHS.

While not explicitly stated within the bill, this could potentially influence routes into markets and procurement, and shift the balance between the national healthcare frameworks and previously local commissioning processes. It will also shape to what extent NHS services in England are able to partner with external providers over services going forward.

This could have mixed benefits depending on implementation, with either a much greater opportunity for integration with local systems or tighter central control which limits commercial routes.

Life sciences and medtech

For companies operating in the medtech or pharmaceutical spheres, the bill underlines the current, government’s focus on innovation, system planning and integration. This has potentially material consequences for increased engagement.

The introduction of greater centralised powers and increased governmental oversight could open the door to more opportunities for national or system-wide adoption pathways, and should lead to a more coordinated use of data for evidence generation and outcome tracking.

At the same time, increased structural control may create additional layers of approval or prioritisation and greater dependence on national strategy rather than local uptake.

The direction of travel suggests a system that is more coherent but potentially less flexible for early-stage adoption of newly approved medicines and medical devices.

Health technology and data companies

The data and technology sector is one of the most strategically significant areas to see changes under the bill, driven in a significant part by the proposed single patient record.

This approach, which is intended to bring together disparate sources into one record to be viewed by healthcare providers and, eventually, patients themselves, suggests an implementation of significant large-scale data integration projects across the NHS.

With this would come an increased demand for smoother interoperability, and procurement at a national level for infrastructure to underpin this new approach to joining up records efficiently.

For companies operating in the sector, that could pave the way for clear opportunities in platform, cloud and infrastructure provision, along with integrating AI and analytics systems for operations in clinical and administrative sectors.

It also raises significant questions – including concerns voiced by health professional representative bodies – over data governance and management, such as how that data could be accessed and who would have access to it.

With the reforms for ICBs and increased NHSC power, it also raises questions about how procurement for these systems might operate, meaning close attention will be needed for operators in this sector.

Social care and adjacent services

The bill’s scope includes the regulation of health and adult social care services, reinforcing the policy direction towards greater integration. 

For social care providers, this may result in closer alignment with NHS commissioning structures, opportunities to participate more formally in integrated care pathways, and having to navigate increased and more centralised regulatory oversight.

How operators should prepare

The Health Bill will, once implemented, represent a major reset of how the NHS is managed and governed, with a focus on three significant areas which will have the potential to shape commercial and policy relationships between the public and private sector.

It brings about an increased centralisation of decision-making authority, a clearer integration of delivery at local and neighbourhood level, and a significant overhaul of digitisation and system-wide data connectivity.

For those operating in or at the edges of the healthcare sector, there may be significant implications for future commercial opportunities - and with an increased focus on centralisation, this will depend on where they sit relative to these shifts, particularly in relation to commissioning access, data infrastructure, and system partnerships.

However, all companies who could be impacted by the new legislation should be taking the opportunity now to start preparing for its impact and, through consultation and amendments, try to help shape the legislation as it progresses through parliament.

This means making sure they have mapped the existing and potential political landscape, aligning relationships with the key political representatives who will shape the debate, and begin defining what their positioning is in relation to the new objectives outlined in the bill.

Understanding the scope of the changes the bill will introduce, with expert input and advice, will also enable companies to prepare for meaningful engagement as it proceeds through Westminster into law.