On the eve of the biggest week yet in determining what form Brexit might take, Wayne Close, the MD of BUPA Health Services, reveals the difficulties to drawing up a business plan in the current environment.
Having come from a finance background within the private healthcare group he is used to delivering insights from data in order to drive strategy. But he says the challenge with Brexit is the scale of the ‘unknowables’ that has made it very difficult to determine the approach for the foreseeable future.
A qualified accountant, Close built up a career in finance at polymer producer British Vita and Barlow Handling, a subsidiary of JJ Bibby & Sons, before joining BUPA as a hospital manager and operations director.
He rose to become finance director of BUPA’s insurance operations, before moving to the Middle East, becoming CFO of BUPA Arabia, before becoming director of finance and risk management across the international business.
A combination of finance and commercial roles across the global businesses of BUPA, led to his current role that he has held since October 2017. Close is now responsible for health services which comprises around 50 health clinics across the UK as well as the BUPA Cromwell Hospital.
It’s a position that he says should give him the ability to “see through subject matters like Brexit, how is it going to affect business,” in what he says is a definitive moment in decision-making for many companies.
Close says that on one level there is the data available to undertake effective strategic decision-making. “When I think about Brexit I think about hard decisions- those in health provision are around drugs, consumables, maintenance and equipment- they’re quite easy to get your hands around.
“We know that certain types of drugs are manufactured in Europe, so there may be a shortage of radioisotopes (used in cancer treatment) as an example. We have to make sure we get security in the supply chain. We’re fortunate in some respects because we have the NHS, which is the largest purchaser. That helps us in drugs and consumables.
“On maintenance a lot of our equipment is constructed in Europe in one form or another but we can have the conversations with suppliers about how we can continue to be supplied,” he says.
One area BUPA has already had to take a pragmatic decision with regard to Brexit has been in its international insurance arm, where the group has had to address the loss of ‘passporting’. “We’ve had to put contingency measures in place to deal with our insured members in Europe, which meant creating a new insurance vehicle,” he explains. This will allow BUPA Global, the group’s international private medical insurance business, to continue to serve customers who are resident or based in the EEA after the UK leaves the EU.
“I am more concerned about the softer issues,” says Close, relating to risks with greater levels of uncertainty. When it is suggested that a slowdown in the economy may result in redundancies and fewer healthcare programmes, he says; “Do we anticipate it? That becomes a really difficult one because planning cycles to an extent are a bit of a continuum, and are not built to deal with this type of soft uncertainty.”
Close says that it’s not just the corporate response to Brexit that will be unpredictable, but also that of individual customers. “As we move into the Brexit process, are we going to see individuals putting off healthcare, holding back because of the uncertainty? It may well be the case that you simply don’t have the time to take care of yourself over the next six months,” he says.
The area of staffing, that he describes as both a soft issue and a hard issue, is also hard to predict, when combining a shortage of domestic medical professionals with the Brexit challenge . “Whether its healthcare assistance staff or healthcare professionals, a lot of our staff have come from Europe. I don’t suddenly find that I’ve got gaps in terms of people returning to the EU, it’s more about- what happens next?”
Close says that in spite of the combination of hard and soft factors BUPA’s healthcare services business doesn’t need to change its plans until there is more clarity on Brexit. “We understand the factual challenges of Brexit, but there are some soft issues that could have a major impact. As we don’t understand those at the moment we’ll stick with our current 2019 plan,” he says.
But he adds: “We’re paid to deliver plans, to manage risk. You could argue that Brexit is a different type of risk, but in many ways it’s just part of what we’re paid to do.”
Wayne Close is participating in a discussion on Brexit at this year’s CFO Agenda.
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