NHS Procurement in the Spotlight
Daniel Legg, Category Manager (Medical & Surgical) UCLPartners Procurement Service
A new approach to procurement
A recent development in the procurement processhas seen the use of category management methodology, where procurement sub teams manage a defined range of products and services in order to become experts in their markets.
Having worked in NHS procurement for over 10 years I’ve been involved in numerous medical/surgical categories including wound care management and laparoscopic surgery. Whilst I’m not clinically trained, I’ve dedicated considerable resource to learn about each market in detail to ensure I understand the Trust’s clinical requirements and to negotiate contract terms with heavily resourced suppliers.
More importantly, category management creates opportunities for procurement to work in partnership with their clinical colleagues. Rather than procurement continually highlighting opportunities to switch products, clinicians have the opportunity to discuss new ways of working or introduce an innovative product.
The tender trap...
As public sector organisations, NHS Trusts are governed by EU legislation requiring that all contracts with a total value exceeding £111k be advertised in the European Journal (OJEU) to increase transparency regarding public spending and to increase competition in supply markets. Whilst the legislation achieves both objectives it is a lengthy process, which is heavily stacked in the favour of bidders who can legally challenge contract award decisions if they are unsuccessful in the bidding process.
The length of time required to undertake an EU tender can range from 6 to 18 months dependent upon the complexity of the contract and the number of suppliers involved in the bidding process. The EU tender process usually causes much frustration for clinicians as all they wish to do is procure the goods or services they have selected as fit for purpose.
In reality, the EU tendering process has its pluses and minuses. On the upside many small and medium enterprises (SMEs) often bring innovative products to market, which may go undiscovered if contracts were continually awarded to the well-known multi national corporations. Competition naturally helps to drive cost out of the supply chain as suppliers compete for business, meaning Trusts can achieve better value for money. On the downside the timescales involved are prohibitive at best and frustrating at worst.
To improve the process, procurement and clinicians need to work together to produce specifications that clearly outline the Trusts requirements; this will reduce the number of supplier clarifications which take time to respond to*. In addition, it is critical to agree upon workable evaluation criteria which are used to score the suppliers bids. In my experience the criteria should be tested using various scenarios, prior to the tender being issued, to ensure the criteria works in the best interest of the Trust because once the criteria has been issued it cannot be amended.
Thankfully Trusts don’t always have to undertake EU tender processes as numerous national and regional bodies create framework contracts. Organisations such as NHS Supply Chain, Crown Commercial Service and Health Trust Europe navigate the EU tender process on behalf of public sector bodies and award framework contracts which allow end users the flexibility to either ‘call off’ products/services from a chosen supplier, with no scope for negotiation or change to the specification, or run a mini competition.
The mini competition process permits end users to run clinical evaluations and determine which solution is fit for purpose. Procurement can also negotiate with suppliers and provide longer term commitment, if appropriate, and secure the best commercial deal for the Trust. The downside of frameworks however is the cost of access; many of the organisations listed above are for profit organisations and charge a fee to access their frameworks.
With the pressure to achieve savings steadily rising over the past few years procurement have taken to renegotiating contracts with incumbent suppliers but there’s only so many times you can skin a cat. Once a supplier has your commitment they will be reluctant to offer greater discounts unless there’s new business up for grabs. Whilst this might be the case in some instances, with growing public demand for services, a Trust’s ability to negotiate better discounts will only stretch so far.
For Trusts to achieve their savings targets I believe they need to adopt a bottom up approach reviewing patient pathways to determine total cost per patient rather than the current obsession with unit price reduction. In addition, clinicians need to be open to evaluating alternative products and solutions; no one likes change but without the threat of change an incumbent supplier is highly unlikely to reduce prices in the knowledge that their current business is safe. So when your Procurement lead shares a new product with you, keep an open mind as it may be help you provide improved, more efficient healthcare. Cheaper doesn’t always mean lower quality.
* Hot off the press…
A campaign to get nurses involved in procurement has been launched by NHS supply Chain, the Clinical Procurement Specialist Network and the RCN.
The Small Changes, Big Differences campaign aims to make savings and promote patient safety by providing interactive tools and sharing best practice to harness the knowledge and expertise in the NHS. A toolkit with best practice guidelines providing information about how to get the most out of working with procurement teams, and suggestions on how to take action is provided. The Traffic Light Support System, for example, helps nurses to label products in their stock rooms to raise awareness of their cost before selection, driving efficiencies without creating any extra work.
The campaign follows a survey of nurses on their purchasing practices; 87 per cent of nurses said patient safety could be improved if nurses had greater involvement in the purchasing process, and 91 per cent said that it would also help save money. The biggest barriers to getting involved in the purchase of clinical supplies were a lack of time, knowledge, support or that they were not allowed to.
NHS Supply Chain said there were thousands of products in the healthcare market, which vary in cost and could also vary in performance. By empowering nurses to get involved with purchasing decisions the most suitable products will be bought at the best price, it said.
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To improve the process, procurement and clinicians need to work together to produce specifications that clearly outline the Trusts requirements