Understanding the risks associated with setting up an NHS company and how to deal with them are key to maximising the chance of success.
Both NHS organisations and their members are at different places on the journey to commercialisation.
From conversations with the sector, we understand that some consider commercialisation as part of their day jobs while many are uncomfortable with the risk and uncertainty.
To manage the risk and uncertainty, thorough planning and developing a business case with long-term commercial objectives is essential. Conducting an options appraisal of the available structures can help identify differences in areas such as management, funding and staffing, and the level of risk associated.
Ensuring that the objectives of the trust and company align at the planning stage and there is a clear ‘purpose’ for the company can alleviate some of the potential challenges and risks associated with commercialisation in the NHS.
The round table identified the following key risk areas for NHS trusts starting companies:
- Strategic – such as clarity over the process for agreeing changes to the strategy
- Reputational – such as poor relationships with local community and service users
- Operational – such as a lack of governance arrangements
- Legislative and market change – such as potential changes in taxation or legislation
- Financial – such as potential losses and how these are covered
Companies perform best when they have flexibility, however attendees/participants agreed that managing the dynamic between this flexibility and their reputation proves to be difficult.
Operationally there is a risk of taking on too much, too soon. It is paramount to develop a clear strategy on priorities, a timeline for delivery and a decision on how to measure outcomes. Getting the pace right will allow rewards to be seen as early as possible whilst mitigating risks.
Download ‘NHS companies – An enterprising approach to health (PDF) [ 1884 kb ]’, which looks further into the key risks when setting up NHS companies and how to best manage and mitigate these to foster the innovation need to deliver quality services to the community.