Nuffield Health has been on many journeys over the last decade as it moved from
being a hospital provider to a connected health and wellbeing business. Credited with accelerating its metamorphosis, CEO Steve Gray talks to Maria Davies about how the company has transformed over the last five years and how it has adapted during the last three months of living with Covid-19
Steve Gray has the kind of congenial, informal manner that seems to befit these unconventional times when bookcases have become the backdrop of board meetings and journalists meet CEOs in online chat rooms rather than the dining halls of the Institute of Directors.
Nuffield Health CEO since December 2015, Gray spends the first ten minutes of our Microsoft Teams meeting asking how I’ve found the last three months and empathising about life in lockdown with a teenager.
Clearly, he is someone with a natural ability to connect. A useful quality in a business that has placed joined up, connected healthcare at its core.
Gray joined Nuffield Health at a time when, in his own words, the charity was ‘good but not fulfilling its potential.’
It was, he says, a big personal decision to take up the role. After many years working in the retail pharmacy sector, he was global healthcare director at AS Watson, the parent company of Superdrug. And the company had just embarked on a five-year strategy which could potentially extend its reach to a third of the world’s population.
Going from that to a UK based organisation with a customer base of under one million required a huge leap of faith but Gray says he was enticed, both by the challenge and the potential of the 60-year-old charity’s vision.
Nuffield Health had been something of an anomaly in the sector for a decade when he took the decision to come on board. In 2005, it was the UK’s third largest hospital operator with around 44 hospitals and 1,600 beds but it had ambitions to diversify into the nascent wellbeing market at a time when it was as much maligned as it was misunderstood. That year, it dipped its toe in the water with the acquisition of Sona Positive Health – a provider of health, fitness and nutrition services to corporate clients
However, it was not until two years later that it took the truly transformative leap into the world of wellbeing and acquired Cannons Health and Fitness from Royal Bank of Scotland. Further acquisitions in the health and fitness sector ensued while it slimmed down its hospital portfolio with the aim of becoming an integrated health and wellbeing business.
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By the time Gray took over, the charity had 77 fitness and wellness centres across the UK alongside a 31-strong hospital portfolio. But despite some success, sector commentators questioned the fit of the two business streams, which had not quite become the cohesive wellness proposition envisaged.
‘When I joined, I found this organisation that almost wasn’t quite sure who it was or what it was. It had some really good things going on. It had some fantastic people. It had some great ideas, but it wasn’t all coming together. And I suppose the biggest single thing was that it had a strategy of connected health and wellbeing, but it wasn’t delivering connected health and wellbeing. So, we had all these different component parts and yet they weren’t really joined up,’ he says.
Gray embarked on a radical restructure early in his tenure. In his first month, he made sweeping changes to the charity’s management structure and brought the two distinct hospital and wellbeing divisions together at board and operational level. Operationally, the charity restructured by geography rather than service line and it has spent the last four and a half years increasing its footprint – both in terms of service provision and geography.
‘Your internal culture has got to meet your brand proposition,’ Gray tells me. ‘If those two things aren’t the same, you’re never going to have long term success and you’re not going to be able to deliver what you want to. So operationally, we needed to bring it together. And then we needed to bring together the customer proposition.’
In 2015, just 3% of Nuffield Health’s 900,000 customers were using two or more of its service lines. Today that figure has grown to 13% and at the same time its customer base has swelled to 1.5 million.
‘That might sound like a relatively small movement in four years but if you extrapolate that over the next five years, we should be about 40 to 50%,’ says Gray. ‘So, we want half of our customers to be accessing more than one service so that we are truly a connected health and wellbeing provider.’
Expanding its proposition has been a key part of Nuffield Health’s vision over the last four years and Gray is keen to point out that it is not in the ‘gym business’.
‘We acquire gyms, and then we turn them into a Nuffield Health fitness and wellbeing centre and that’s about making sure that people have a wellbeing programme that’s tailored to them,’ he says.
All Nuffield Health fitness and wellbeing centres have resident physiotherapists and following its acquisition of CBT provider CBT Services in 2016, three quarters now also have emotional wellbeing specialists.
Crucially, says Gray, it is this expanded wellbeing offering that acts as the bridge connecting the charity’s fitness centres and its hospital business.
‘Wellbeing could be physical fitness, it could be emotional wellbeing, it could be a health assessment, it could be other clinical services, or it actually could be a precursor for secondary care services,’ he says. ‘And that’s actually started to pull the whole organisation together. And if you think of where the market is going, it’s absolutely about preventative care. We know that whether you’re a corporate, an individual or a government, if you invest in preventative care, you can have better health outcomes. And you’re going to have
a reduced total healthcare bill because your curative care costs will go down.’
However, fast forward to March 2020 and the Covid-19 pandemic has threatened to tear apart those carefully crafted connections. As the hospital business signed over its entire capacity to support the NHS during the peak of the crisis, the health and fitness facilities were forced to shut up shop under the government’s lockdown measures.
‘It’s almost like sometimes the strength of an organisation can be its weakness and vice versa. So, our uniqueness of health and wellbeing gave us some challenges straight away,’ Gray explains. ‘Half the organisation had enforced closure and the other half was co-opted
into the NHS. So, it has been a massive challenge.
In the early stages of the pandemic, when it looked like the NHS could be overwhelmed, 3,000 of Nuffield Health’s fitness and wellbeing centre staff volunteered to retrain to work in its hospitals. Fortunately, this has not been needed, but staff across the organisation have had to adapt quickly to what Gray describes as an ‘absolutely different world’ as some hospital sites took on urgent NHS procedures in cardiology and cancer care and others set up Covid wards.
‘If you take our Woking hospital, for instance. I think the last time Woking hospital had a death was probably something like 15 years ago. And yet what their trust needed them to do was Covid-19 palliative care. So, on the first day of accepting those patients they had death straightaway. It has been really traumatic for that team,’ he says.
In April and May, Nuffield Health saw almost 50,000 NHS patients. That’s more than in the whole of the previous year and, Gray says, it’s a trend that continued into June.
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‘The way our teams have stepped up to it and met the needs of the NHS is incredible. And I think it just shows what happens when you remove the supposed stigma of the independent sector. Actually, it’s just really great clinicians and medical teams delivering fantastic frontline care, and the NHS and the independent sector working really well together,’ he says.
All 31 of Nuffield Health’s hospitals have been working with the NHS. In many cases, completely integrating staff and services with local NHS trusts to deliver seamless, joined up care for patients.
Both sides have learned from one another, operationally and clinically but, says Gray, they have also learned about each other. And this, he believes, has the potential to permanently transform the relationship.
‘At governmental level and at an NHS systems level, there is an absolute acceptance that the best way of managing the population’s health is for the independent sector and the NHS to work together, like the German market where the system is so intertwined that patients often don’t even know if they’re in a private hospital or a state hospital. And that is translating at a local level, so I do think that this attitude of the two are somehow in competition has disappeared,’ he says.
As the independent sector moves into the next phase of the contract with NHS England, Gray says providers will need to strike a balance between continuing to treat NHS patients and ramping up services for their traditional private pay customer base. With new social distancing and infection control measures, along with rising costs from PPE and an uncertain economic environment, making that work will require careful planning.
‘In the short term we’re going to have some bumps in the road without a shadow of a doubt,’ he says, ‘But I think medium to long term, the independent healthcare sector has got an incredibly bright future. I think it’s going to grow and grow, but it’s got to be value for money, it’s got to be connected, and it’s got to be preventative and curative as well.’
Despite the uncertainty that lies ahead, Nuffield Health’s plan is to increase its customer reach to 10% of the population over the next five years. It is an ambition that Gray says will have to be delivered in partnership – whether that be with insurers, the NHS, other providers or corporates – but is achievable even in the face of Covid-19.
‘We need to make sure we come out of this with a market leading strategy and we know what that looks like,’ he says, ‘And do we want to grow the organisation? Yes, we’re in a period of growth and we want to continue to grow. If we see the right opportunities we will go for them – if we are to reach 10% of the population, we will need to evolve what we do. We have learned a lot over this period of time and that has led us to re-prioritise some of
our objectives and reassess how we work internally and with others. We’ve learned a lot, but we also know that we went into this really strongly, and we’re going to come out of it even stronger and we want to accelerate our growth because the need is out there.’