IPPR June 2015
- This paper explores the barriers to introducing and spreading innovation in the NHS, and how to liberate those who develop, commission and use potentially revolutionary healthcare innovations.
- Informed by case studies and interviews the report describes three key market failures that continue to inhibit innovation in the NHS. These 'market failures' prevent or slow down the spread of innovations in the way we would expect to see in a 'perfect market', by:
- making it hard for buyers and sellers (or commissioners and developers) to identify and make contact with each other, or by requiring developers to invest time and money in educating would-be buyers about their product (an asymmetric information problem)
- allowing commissioners to make investment decisions that are motivated more by concerns about costs or risks than by patients' healthcare outcomes (the principal–agent problem)
- sustaining rather than dissolving the silos that exist between care services (for example, between emergency and community service areas), and by inhibiting investment decisions which are not permitted to account for future savings in other parts of the healthcare system (a misaligned incentives problem).
- The report makes recommendations for central government and for AHSNs
