Tens of thousands of new jobs could be created were the Government to reform the market for healthcare innovation and embrace digital health technologies, it has been claimed.
Mr Sage told peers holding an inquiry on inquiry on life sciences and industrial strategy, that such a move would free up huge amounts of capacity within the health and care system.
He told the committee that individual NHS organisations are paid for activity rather than outcomes, which creates “perverse incentives” and encourages more people to be referred to hospitals rather than less.
This deters clinicians from embracing innovations like self-testing technology as they would be penalised financially, Mr Sage added.
He also criticised the use of multi-year block contracts, which he said prevented new market entrants and lumbered commissioners and providers with ageing methodologies.
Mr Sage said new ways for delivering care might save a fortune for the NHS overall but if individual organisations cannot realise any benefit they are not interested.
He said: “That’s why it is all broken. There is no overall control. If you have someone who has a holistic view of the spend and the best practices and best outcomes, they can make that choice and save the NHS money overall.”
Other witnesses included senior figures from GSK, AstraZeneca and the National Institute for Health and Clinical Care Excellence.
Speaking afterwards, Mr Sage said the digital health and life sciences sector is particularly strong in the Northern Powerhouse.
He said: “Reforming how the NHS adopts and purchases will deliver a huge economic boost to the North of England, which already has a great concentration of knowledge-based innovative health and life sciences businesses as well as world-leading universities and some of Europe’s best hospitals.”
“For all its bad press the NHS is looked upon as a leader in the world, as it adopts these new technologies other nations will follow, which is great news for UK PLC”
The Government has set out plans in its Industrial Strategy Green Paper to make the UK the best place in the world to invest in life sciences.
The House of Lords committee is looking at whether the Government has the necessary structures in place to support the sector, including how the NHS can use procurement to stimulate innovation.
Inhealthcare is a digital health company focused on developing digital care services for the NHS.
It is part of Intechnology plc, the stable of businesses owned by Yorkshire internet entrepreneur Peter Wilkinson.
The company’s technology supports care in many areas including stroke prevention, mental health, chronic pain, long-term conditions, cancer, diabetes, wound management, nutrition and care homes.
Its business plan is to work with local providers and commissioners to roll out its digital health platform region by region.
Its primary geographical focus is Yorkshire and the North East but it has engagement with NHS providers in London and the Home Counties, East Anglia, the North West, Scotland and Northern Ireland.