Some of the market’s major winners will be companies that offer palpable cost savings to under-pressure public sector.
A case in point is Deltex Medical (LON:DEMG), which has a device called CaridioQ that could save the National Health Service an estimated £1 billion a year.
Today the all-powerful National Institute for Clinical Excellence, or NICE, put its weight behind the heart monitoring device used in patients undergoing major or high-risk surgery.
NICE’s recommendations are keenly followed by the physicians and more importantly hospital bean-counters who hold the purse strings.
Its guidance was wider ranging than anticipated, meaning that CardioQ-ODM could be considered for use in up to 1 million patients a year.
So powerful was the NICE endorsement that the shares shot up 9.55 pence, or 48 per cent, to 29.55 pence.
Deltex chief executive Ewan Phillips: "NICE's final guidance is a resounding endorsement for the CardioQ-ODM at a time when the NHS is charged with delivering £20 billion of efficiency savings over the next four years.
“Implementing this guidance in full would be a significant step towards the NHS delivering these savings while improving considerably the care given to those patients undergoing major and high risk surgery.
"The NICE guidance follows on from the 'How to, Why to' guide published in 2010 by the NHS National Technology Adoption Centre setting out 'real world' lessons on how to implement effectively the CardioQ-ODM into routine practice in NHS hospitals."
CardioQ changes the way that doctors care for patients undergoing surgical procedures, helping them recover faster and enabling them to leave hospital sooner and in better health. This frees up surgical ward beds and delivers an estimated net saving of £1,100 per patient.
The device is an oesophageal Doppler monitor, or ODM for short, and comprises a monitor and a single-patient disposable probe, which is placed into the oesophagus through either the mouth or the nose with the tip of the probe positioned so that it is close to the descending aorta.
The speed of blood travelling down the aorta is then measured by using a low-frequency ultrasound signal.
Being able to measure blood velocity helps patients by enabling doctors to reduce the complications that arise from a medical condition that is common among almost all patients who undergo surgery, as well as many others in intensive care or arriving in an accident and emergency department.
This condition, known as hypovolaemia, is a reduction in circulating blood volume and it arise in surgical patients due to a combination of pre-operative starvation, anaesthetic agents and the blood and fluid losses associated with the surgical procedure itself.
The body struggles to get sufficient blood to the tissues and vital organs, which are consequently starved of oxygen, which can cause medical complications including major organ failure that can in turn lead to severe long-term health problems and even death.
Clinical trials have shown that the use of oesophageal doppler monitoring to guide fluid management in patients reduces complications and the length of hospital stay after surgery.
All things considered, this is positive for both the NHS and Deltex.
The company is expected to make the bulk of its money not from the monitors themselves, but from the disposable probes. Analyst Chris Thomas of Arden Partners reckons this is a £65 million a year opportunity.
“We believe that the NICE guidance will carry significant weight within the NHS and the endorsement of cost savings and better patient outcomes should be a powerful “carrot” to help drive adoption.
“The NICE guidance also introduces an element of “stick” as well, as failure to implement NICE guidance could also leave hospitals more vulnerable to litigation if there were complications during surgery.
“(It) comes on top of a number of other NHS initiatives designed to address the failure by the NHS to take full advantage of new technologies that can improve its performance. Deltex is at the forefront of NHS initiatives already underway to address this problem.”