Why EHC Exists
We get asked about this a lot, so thought it would be a good idea to write down why Ethical Healthcare exists, and why we think we’re pioneers of a pretty brilliant new way of doing business with the public sector. If you could even call it business, because most ‘business’ strategies don’t apply to the way we do things, which is why we think it’s so great.
A few years ago, one of our founding directors sat down with a large IT supplier to discuss aligning both sets of teams around a common purpose for a major NHS outsourcing deal. The NHS team’s purpose was obvious- improving patient care, enabling savings etc. The supplier however was brutally honest, the sole purpose of their team was to deliver their profit margins.
There was the first epiphany- there is an intractable challenge when the private sector interacts with the public sector. The NHS exists purely for patients, that’s it. And ultimately any private organisation exists to make money for its stakeholders, that is its raison d’etre. Yes, of course, it doesn’t mean that private organisations are all evil and don’t do good stuff, but absolutely everything they do is in service to profit. That’s not meant as a criticism, it’s just simply part of our socio-economic environment, if they don’t make money, they will soon cease to exist.
The NHS is full of people desperately trying to save money by doing more and more with less and less. Yet in the private sector you have people trying to make money- driving more and more profit by doing the least they can. Yes, yes, we know that’s a harsh statement, but if most companies could maximise profit by compromising on quality and still get the same levels of repeat business we’re pretty sure they would.
You honestly couldn’t really try to set up a worse starting scenario. How can you work with someone that has completely opposite values and motivations to you? But, other than working with other public-sector organisations, the NHS has no choice but to seek help from the private sector, so this dysfunctional relationship has just become the accepted norm.
Nonetheless, we thought there just had to be a better way, which led to the second epiphany- what if you took profit out of the equation? Could an organisation exist that was aligned with the NHS in prioritising patients and that had no motivation or mandate for profit? Yes, it can.
Community Interest Companies (CICs) are just that, and so we set up EHC as one of them. CICs cannot be bought out and are severely constrained in the levels of dividends that can be paid out. In short, there is no motivation for profit and no financial end game. If you have a CIC that is nicely profitable, there is no personal gain, the only thing you can do with it is reinvest it. That really is a game changer, it has allowed us to be entirely transparent in absolutely everything we do. Doing away with profit means simply being able to do the best thing for the NHS. Its honestly revolutionary. Imagine if every consultancy worked that way. The only people that would lose out would be shareholders. But the money they lost would be kept back in the NHS, which we think is a better use of money if we're honest.
But there is a long way to go before CICs are regularly considered as a viable alternative by the NHS, or even before the NHS becomes aware of CICs as a concept. And of course, many more CICs need to come into existence to offer the services the NHS needs. And although we’re very happy to be the only CIC supporting NHS Informatics, we would love more CICs to get out there in the market as we genuinely think that it is the future of external support for the NHS.
Our next blog will address some other common questions we get asked about the CIC model and how the model supports trust, which is critically important when working with the NHS.