The NHS as an anchor

How can health care organisations maximise their resources to improve population health? 

The Five Year Forward View and evolution towards integrated care systems have placed greater expectations on the NHS to work across a geographical area and maximise its resources to improve the health of a local population. And while this focus on place-based systems of care has spurred developments in the way services are designed and delivered to help prevent ill health and promote wellbeing, limited attention has been given to how the NHS can influence the economic conditions that help create health in the first place. 

The impact the NHS has on people’s health extends well beyond its role as a provider of treatment and care. As large employers, purchasers, and capital asset holders, health care organisations are well positioned to use their spending power and resources to address the adverse social, economic and environmental factors that widen inequalities and contribute to poor health. 

But what might this look like in practice? The concept of anchor institutions offers a helpful way of thinking about how NHS organisations can maximise their role in local economies. 

The role of anchor institutions 

First developed in the US, the term anchor institutions refers to large, typically non-profit organisations like hospitals, local councils, and universities whose long-term sustainability is tied to the wellbeing of the populations they serve. 

Anchors get their name because they have ‘sticky capital’ (ie are unlikely to move given their connection to the local population) and have a significant influence on the health and wellbeing of a local community through their sizeable assets. Given this vantage point, anchor institutions make an important contribution to the strategic development of local economies – they can be a key voice in where and how resources are spent. 

The idea of anchor institutions is not a new one in the UK. The Centre for Local Economic Strategies for one has been working with partners in Preston and other areas over the last decade to understand the impact anchor institutions have on local economic development. 

While an increasingly well-established idea in the UK, much of the conversation has centred on the role of universities and local authorities as anchors. The NHS has often been missing in the debate, begging the question of how and to what extent the NHS functions as an anchor, and where the most significant opportunities and challenges lie for health care organisations to harness their resources to support population health.  

What are the opportunities for the NHS?

There are several potential ways the NHS could align its assets to influence the broader factors that impact health. Here are just three of the ways the NHS can support local economies in its role as an employer, purchaser, and property developer.       

The NHS as an employer  

Organisations in the health sector are often the largest employers in local areas: the NHS alone employs more than 1.6 million people in the UK. And given that employment is vital to good health, increasing the amount of hiring an NHS organisation does locally may be an opportunity to increase the impact that it has on the wellbeing of communities.  

Examples of NHS organisations working with partners to support local residents can be found across the UK. This is something that Guy’s and St Thomas’ NHS Foundation Trust is doing through schemes that target apprenticeships and work placements for people who are long-term unemployed. And given the workforce challenges confronting the NHS, thinking about ways of broadening the recruitment pool and developing new local partnerships to attract more people to the service is especially timely. 

The opportunity extends beyond getting more people into work. The quality of the work also matters. In-work poverty is on the rise in the UK, in part due to low wages and insecure, part-time jobs. Current pay scales in the English NHS mean that some employees on lower band salaries do not earn the national living wage, though the recent deal reached between union leaders and ministers means that this may soon change.  Beyond pay, it’s important to consider how NHS organisations can have a direct impact on poverty through its actions as an employer and support stable, secure employment for all parts of the population. 

The NHS as a purchaser

Health care organisations spend roughly £20 billion on goods and services. As major procurers and purchasers of services, NHS organisations have an indirect impact on the conditions of many more workers not formally employed by the health sector. By sourcing more goods and services locally, and with organisations that offer a living wage, NHS organisations could have a greater impact on community wealth. For example, a Joseph Rowntree Foundation analysis of the Leeds City Region found that if ten anchor institutions (including clinical commissioning groups and hospitals) shifted an additional 10% of their total spend locally, this could drive an additional £168–£196 million into the Leeds economy.

The NHS as a capital estate holder and developer

The NHS also has significant capital assets. NHS hospitals alone own roughly 1,200 sites worth £9 – £11 billion.  Ensuring these assets are used in ways that address resource gaps in communities and support residents to live healthy lives may help address environmental and economic disparities. For example, Sandwell and West Birmingham Hospitals NHS Trust are working with partners to make use of unutilised buildings on trust grounds to provide housing through their apprenticeship programme, which targets young people at risk of or facing homelessness.

What are the challenges?

Even with these opportunities, there are many questions and tensions that must be thought through to understand how NHS organisations might maximise their role as anchor institutions in the current context. For one, what are the implications of shifting more procurement locally for efficiency, and how might this be at odds with national strategy to consolidate procurement following the Carter review? And what appetite is there among NHS organisations to change practices when the system is already being tested to its limits in terms of what it is expected to deliver? 

We also recognise that key to thinking about the NHS as an anchor is thinking beyond what the health sector can do in isolation. Though the NHS has considerable influence over local economies in its own right, maximising impact will come from thinking about ways NHS organisations can work with other anchors and local communities to collectively harness resources to meet shared economic and social objectives. However, developing these relationships takes time, and current system reconfiguration (though evolving) has often made it difficult for NHS organisations to work across institutional siloes for the collective benefit of a place.

This is why the Health Foundation has been exploring these issues with partners including the Centre for Local Economic Strategies and The Democracy Collaborative to understand these and other practical implications for changing practice to align with the anchor mission. We want to know how the NHS can best support population health, and where the greatest opportunities are. We look forward to sharing our plans over the coming months.

Sarah Reed is an Improvement Fellow in the Health Foundation’s Improvement Team. Twitter: @sjanereed