Dr Christine Armistead, Partner, Public Sector BIP UK, explains where the NHS’s next major digital savings could potentially come from.

The NHS has entered a new phase in its digital journey. For years, technology has been framed primarily as a tool for modernisation, improving safety, patient experience and access to care. Today, the question is more direct: where does digital actually save money?

Following the 2025 Spending Review, the government has set a target of delivering 2 per cent annual productivity improvements across the NHS over the next three years, generating £17bn in savings across the period. Digital transformation must therefore demonstrate clear financial value, not just technological progress.

Globally, health systems facing the same pressures as the NHS, including rising demand, workforce shortages and constrained budgets, are learning that digital transformation does not deliver financial value evenly. Some investments stabilise finances quickly, while others reshape the economics of care over many years. The systems making progress understand this distinction and sequence their investments accordingly.

Across international health systems, I have seen that the financial impact of digital health consistently concentrates in five areas where productivity gains are most visible, each operating on a different time horizon. Together, these form a practical roadmap for where NHS leaders should focus digital investment if the goal is sustainable productivity improvement.

These five areas are outlined below:

1. Administrative Automation: The Fastest Savings

The first, and often uncomfortable, truth is that the fastest savings are rarely the most glamorous. Administrative activity still absorbs a significant proportion of healthcare spending, often between 15 and 30 per cent in developed systems. Digitising and automating this layer consistently delivers the quickest returns.

Automation of coding, procurement, HR, finance and repetitive back-office workflows reduces labour intensity, improves data quality and eliminates rework. Internationally, reductions of 20 to 40 per cent in administrative workload are now common in targeted functions, with payback frequently within 12 to 18 months.

Emerging AI tools are accelerating this shift. In one European healthcare provider, generative AI was deployed to analyse service contracts and automatically identify compliance risks and performance issues. The result was a 60 per cent reduction in contract review time, freeing legal and operational teams to focus on higher-value decision-making.

The NHS does not face the multi-payer billing complexity seen elsewhere, but the lesson remains relevant. Shared services across ICB footprints, digitally enabled procurement and trust-to-trust automation represent some of the most immediate and achievable productivity gains available. This is not transformation theatre; it is about supporting the NHS productivity challenge at a time of sustained financial pressure.

2. Releasing Clinician Time: Unlocking Existing Capacity

An even more powerful lever sits alongside administrative automation: clinician time. Workforce capacity is now one of the NHS’s most constrained assets, and technologies that give time back should be treated as core infrastructure.

International deployments of ambient clinical documentation are consistently freeing two to four hours per clinician per week. In the NHS, this is less about reducing headcount and more about releasing capacity currently buried under documentation burden.

AI is also beginning to support clinicians directly in diagnostic workflows. In one hospital group in Northern Europe, AI-assisted analysis of chest X-rays improved diagnostic sensitivity for lung nodules by 19 per cent while reducing image review time by around 30 per cent, enabling faster reporting and reducing radiologist workload.

Reducing administrative and reporting burden allows clinicians to spend more time with patients, supporting efforts to tackle the elective backlog while sustaining emergency and urgent care services.

3. Optimising Electronic Health Records

Beyond these early gains lies a slower-moving category of savings that compounds over time. Electronic health records are now widely embedded across the NHS, but the financial return rarely comes from implementation alone.

Productivity often dips before it improves. The real value comes when organisations move from deployment to optimisation, for example, by reducing duplicate diagnostics, improving theatre utilisation, enabling safer prescribing and using real-time data to deploy staff more effectively.

Operational AI is increasingly being layered on top of these digital foundations. Predictive modelling applied to hospital admission and discharge patterns in a Southern European hospital network helped optimise bed allocation and patient flow, delivering an 18 per cent reduction in emergency department wait times and a 22 per cent improvement in matching patients to appropriate bed types.

Countries such as Denmark and Estonia demonstrate what becomes possible when digital health records are treated as national infrastructure rather than isolated IT projects. The returns take years rather than months, but without strong digital foundations automation, AI and prevention cannot scale.

4. Virtualising Care

Some of the most striking international lessons are emerging from virtualisation, where digital does not simply make care cheaper but makes some care unnecessary.

Saudi Arabia’s Seha Virtual Hospital illustrates the potential. By connecting more than 100 hospitals through a national digital command model, specialist expertise is shared virtually rather than duplicated physically.

For the NHS, the implications are significant: reducing agency reliance, addressing geographic inequality and making better use of scarce specialists.

Closer to home, virtual wards and remote monitoring are already showing reductions in bed occupancy and length of stay. These gains typically take three to five years to materialise because they require pathway redesign and operational change. But their impact on system efficiency is far greater than any single back-office intervention.

5. Prevention and Early Detection

The largest financial prize lies further ahead. Prevention and early detection are where health system costs truly begin to bend. Late-stage treatment is exponentially more expensive than early intervention, and AI-enabled population health analytics are beginning to identify deterioration before it becomes acute.

Emerging AI tools are starting to support this shift. In one European initiative, a generative AI assistant was used to identify at-risk patients and recommend appropriate screening programmes, preventive campaigns and follow-up interventions based on patient history and risk profiles. This helped increase uptake of screening programmes while enabling more proactive outreach to vulnerable populations.

International evidence suggests that mature prevention-led digital ecosystems could reduce total health expenditure by 10 to 15 per cent. For a publicly funded system like the NHS, where the Treasury ultimately carries the cost of late-stage disease, this is not simply good policy but sound economic logic.

However, prevention also creates the greatest strategic challenge. Benefits accrue over long time horizons and often across organisational boundaries. They rarely align with short-term financial cycles. Delivering them requires system-level stewardship from national bodies and ICB leadership, not just individual trusts.

In practice, what I am seeing across health systems is that the most common strategic mistake is not choosing the wrong technology, but choosing the wrong sequence. Some organisations look to long-term prevention technologies to solve immediate financial pressures, while others automate administration and declare digital success. Neither approach delivers sustainable value.

The systems making real progress follow a clearer progression: stabilising finances first, releasing workforce capacity next, then strengthening digital foundations before virtualising care at scale and ultimately realising the economic benefits of prevention.

Over the next decade, the NHS organisations that succeed will not be those with the most technology, but those that deploy it with financial discipline.