UK Health Service Procurement – a look at “Raising Our Game” (part 2)

This article previously appeared on Spend Matters UK/Europe. A special thanks to Peter Smith for allowing us to republish his work.

On Wednesday we started coverage of the recent UK Department of Health “Raising our Game” report on procurement in the sector. We’ll continue today looking at the actions recommended in the report under the final three headings, and our (brief, initial) thoughts on those issues.

4. Leadership, clinical engagement and reducing variation

Action: Trust Chief Executives should consider using the ICARE approach to lead change in procurement

Action: We will support the HCSA in developing as a professional association that provides leadership to NHS procurement

Action: We will work with HCSA and CIPS to develop an academy for NHS procurement

Action We will work with trusts and clinicians to identify best practice for reducing variation and managing demand for products and services

Here’s the ICARE thing in detail:

Invest their time by showing procurement is important and if need be, invest in the people, processes and technology

Be prepared to sponsor and, if required, lead Collaboration between trusts on procurement issues

Appoint a Board Executive to be accountable for procurement and a non-Executive director to sponsor the procurement function

Ensure the procurement function gets the attention and Recognition it deserves

Ensure senior managers and clinicians Engage in procurement to drive a cost-management culture

Spend Matters comment – The report says: “The procurement profession must also raise its game and play its part”. It goes on to in effect say that the Department wants to “outsource” responsibility to the Health Care Supplies Association and CIPS for –

• Learning and development for procurement professionals and staff involved in procurement activities

• Policy advice and communications

• Ownership of best practice and the NHS standards of procurement

• Benchmarking facilities, including trust dashboard metrics and price benchmarking

• Guidance on how best to use outsourced procurement partners

• Networking

• Development of an academy for NHS procurement

I find that extraordinary! Can you imagine a Unilever, Tesco or Ford saying “we’ll let professional associations determine how good our procurement people (or accountants, or HR professionals) are”! That would be a dereliction of duty. HCSA and CIPS can of course support the actions – but if the Department and the health system wants a procurement academy (for example), they should take responsibility for setting one up.

5. Collaboration and use of intermediaries

Action: We will work with the FTN and others to find ways the NHS can become a more informed customer in the use of procurement partners

Action: We will work with trusts and their procurement partners to find ways in which firmer commitment can be given to suppliers

Action: We will ask NHS Supply Chain, the Government Procurement Service, and others, to produce information on ‘lost opportunities for savings’ for trust Boards to consider

Spend Matters comment – There is a paradox here, which maybe explains why there isn’t actually much in here around national contracts for instance. The comments about commitment are of course reasonable – that’s how to get better deals. But earlier on in the report it says this.  “The Department worked with the FTN (Foundation Trust Network) last year to benchmark prices paid for a sample of medical products from a small number of trusts. The results showed smaller trusts often secured better pricing than larger ones”.

So that would suggest national contracts in themselves are not enough to guarantee success. (Work by the National Audit Office has also found the same, interestingly). It seems that volume is not always the answer –  we’ll return to that theme, but it obviously means that simplistic aggregation approaches may not be enough. And the document also gives no clue as to how the strategy might address the complexity of the landscape in terms of multiple collaborative procurement and supply chain organizations. That will be a tough nut to crack.

6. Suppliers, innovation and growth

Action: Trusts to acknowledge the Government procurement pledge

Action: Trusts should stop using PQQs for low value contracts (under £100,000)

Action: We will update and publish an NHS standard set of terms and conditions of contract for goods and services

Spend Matters comments – All good Whitehall / Government Procurement Service stuff. We haven’t written about the procurement pledge – it strikes us as something more designed for the politicians to put in their list of achievements rather than something with tangible benefits, but we’re open to be persuaded…  And the lack of PQQs, as we’ve said before, means buyers are putting PQQ type elements into the tender documents – we’re still not sure this really works any better. Standard Ts and Cs – again, didn’t PASA have this years ago?

That’s quite enough for now – we’ve given a reasonable level of detail on the “actions” and some initial views, so we’ll come back to health procurement next week and look more broadly at where all this might be leading.

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