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January 06, 2017
TRANSFORMING NHS PROCUREMENT IN A FRAGMENTED LANDSCAPE?
By: Sara Ford

The NHS is under pressure to achieve greater efficiencies, in the face of budget constraints and rising demand caused by demographic shifts. This pressure has been compounded by the pound’s recent decline, and the results of the 2016 financial year are revealing an aggregated deficit of £2.45bn.

In response to these issues, and with a view to supporting the delivery of the Five Year Forward View, the National Procurement Transformation Programme is rightly focused on tackling unwarranted variation in product cost and usage across the NHS.

However, it is important to remember that removing unwarranted variation in Trust purchasing channels can also yield efficiencies. Front-line staff often have multiple ways to purchase a single, patient-critical product. This fragmentation leads to a wide variation in both the products used on patients and their cost, as well as in the overall efficiency of the NHS supply chain. It is therefore little wonder that in Lord Carter’s report—Operational productivity and performance in English NHS acute hospitals: Unwarranted variations—evidence from a sample of 22 Trusts showed that they purchased “20,000 different product brands, [and] more than 400,000 manufacturer product codes” in just one year. This ease of access to multiple purchasing channels is a significant barrier to maximising value in the NHS.

Targeted, innovative transformation in the supply chain at a national level would present a unique opportunity. It would not only help reduce variation across the NHS, but also help Trusts improve their capabilities, deliver greater savings and develop high-performing procurement functions. Such functions would have the ability to:

  • Utilise market-leading supply frameworks, underpinned by volume commitments, to deliver products that serve recognised clinical pathways and the specific needs of the Trust.

  • Consolidate purchasing routes through a single portal/catalogue for end users.

  • Reduce product variation through sustained rationalisation and standardisation exercises that are not subject to product creep.

  • Streamline Trust purchasing, freeing up capacity for procurement teams to maximise value elsewhere through strategic, rather than tactical, procurement initiatives.

By transforming supply chains, improving purchasing practices and reducing variation, NHS Trusts can achieve greater efficiencies in 2017, helping to meet rising demand against an increasingly fragmented landscape.

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