NHS needs a staggering £8bn for IT - McKinsey

If the NHS invests £8bn, it could make £13bn in savings, which would help to cut an estimated £30bn shortfall in NHS finances by 2020-21, says McKinsey

The NHS needs to spend a staggering £7.2bn to £8.3bn on digital technology over the next five years in order to achieve savings of between £8.3bn and £13.7bn, according to a report by management consultancy firm McKinsey.

The firm suggested that if the NHS did spend those eye-watering sums on digital technology, then it could help to drastically cut what it predicts will be a £30bn shortfall in NHS finances by 2020-21.

A copy of the presentation of the report was sent to Digital Health News by pressure group Spinwatch, which obtained it through a Freedom of Information (FOI) Act request.

The report sets out why the Department of Health has bid for between £3.3bn to £5.6bn in the government spending review. The government review announcement will be made on 25 November, and the Department of Health will be hopeful that it can obtain the full amount of its budget until 2019-20.

The McKinsey report, dated April 2014, suggests ways in which the NHS could close the gap between funding and the predicted increase in costs and demand by 2020-21.

It believes that the NHS can save £3.2bn to £3.9bn in the acute sector alone by investing in electronic health records and other digital technologies such as barcoding, RFID, e-rostering and patient flow management. McKinsey states that savings could also be made in primary care (up to £2.8bn), community care (up to £2.2bn), mental health (up to £3bn), integrated care and screening (up to £2.5bn) and primary prevention (up to £900m).

McKinsey estimates that the total upfront investment to achieve these savings would be £5bn to £5.2bn, with running costs of between £2.3bn and £3bn until 2020-21. The upfront investment includes the initial technology investment in each of the areas where McKinsey believes the NHS can make savings, as well as training costs and adoption costs.

As the information included in the presentation is not as detailed as what may be in the full-length report, there is little information of how the savings will be achieved. The full report is not publicly available.