Transcript The NHS Commercial Environment
Lord Hunt
President of the Health Care Supply Association The NHS Procurement Landscape
Agenda
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Introduction
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The NHS Commercial Environment
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The Procurement Landscape
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The Optimal Route to the NHS Market
Introduction
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Lord Hunt background
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Career review
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Current role and view of procurement
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Health Care Supply Association
The NHS Commercial Environment
The NHS is in constant state of change........
• • • • Necessity Not Nicety / Commercial Skills for the NHS – Commercial Support Units – – Demise of PaSA Formation of PICD and SMDU Liberating the NHS – Demise of PCTs and SHAs – Greater accountability for GP Consortia (now Clinical Commissioning Groups) FT Network / Other Providers and the competition agenda – Foundation Trusts competing to provide services QIPP agenda driving £20b savings – £1.2b from procurement
……. but how do these changes affect the supply market?
The NHS Commercial Environment Pre White Paper
Department of Health
Interim Position
Department of Health
Post White Paper
Department of Health (?) National Commissioning Board Regional Commissioning Organisations SHAs SHAs Commercial Support Units Regional Specialised Commissioning Groups Commercial Support Units Collaborative Procurement Hubs (CPH) CPH / Collaborative Commercial Organisations Regional Specialised Commissioning Groups PCTs PCT Clusters Trusts (NHS/FT) GPs Private Healthcare Trusts (NHS/FT) GP Consortia Private Healthcare Commercial Support Units Collaborative Commercial Organisations Regional Specialised Commissioning Groups GP Support Organisations Trusts (FT) Clinical Commissioning Groups Private Healthcare
….. but do we understand the role of each organisation??
The Procurement Landscape
NHS procurement leadership and strategy appears uncoordinated?.....
• • • National Strategy – Procurement, Investment and Commercial Division – Shared Business Services (CPS) / NHS SC / OGC Buying Solutions subsumed into Government Procurement – The QIPP Agenda and the role of the SHAs – National Procurement Council – National commercial organisations (regional) – Public and Private Regional Strategy – SHA’s morphing into something new – Commercial Support Units (Commissioning / Provider Services) – Commissioning Support Units – Public / Private Local Strategy – Acute NHS and Foundation Trusts / GP Consortia
…..there is little linkage across the players
The Challenges for Buyers
• Information – Lack of transparency of price paid – No single place for “rich” data on products and markets • Communication – Use of value measurement i.e. innovation vs the need for cash releasing savings – Clinical engagement with decision making – Various routes of communicating with supply market • Business process – Inefficiency caused by framework contracts – Difficult to operate collaboratively without bureaucracy – Delivery to support Trust strategic objectives
.....no professional voice
The Challenges for Suppliers
• Information – Weak information and market intelligence – Slow uptake of new products and innovation – Clinical evaluation inconsistent • Communication – Time and cost to take a new product to market – Limited performance & improvement feedback • Business process – Multiple routes to markets – confusion – Prescribed supply routes may not be optimum – GPO / Intermediary business models – Access to decision makers
…..what is the optimum for suppliers
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NAO / PAC Summary
NHS Acute and FTs in England spend over £4.6billion Each Trust controls its own purchasing, in line with the Government’s strategy Trusts can purchase consumables in various ways Foundation Trusts act independently and will choose how it collaborates – DH acknowledges that it is accountable for NHS procurement across the system, but it has no control over the actions of the individual trusts who could deliver improvements Fragmented system of procurement has produced a great deal of waste, with trusts being charged different prices for the same goods A lack of quality data - bar-coding of products would help trusts to rationalise the range of products they buy and compare prices, providing the data they need to benchmark their performance.
NAO / PAC Conclusions and Demands
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2.
There is a need for clarity from the Department about how it will deliver the necessary improvements in procurement by NHS hospitals when trusts are independent of its control.
It is not clear how trusts will be motivated to deliver collectively the £1.2 billion savings required from procurement under the Quality, Innovation, Productivity and Prevention (QIPP) programme.
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Information on what products trusts buy and the prices they pay is poor.
NHS Supply Chain is not demonstrating its value to the NHS.
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6.
Regional purchasing structures are confused and lack transparency There is a risk that, faced with the need to make savings, trusts will not identify procurement savings and will instead cut elsewhere.
The Optimal Route to the NHS Market
What is the most effective route for suppliers to sell to the NHS? What drives the organisations involved?
• • • National – NHS SC – OGC Buying Solutions – SBS (CPS) Regional – Developing Commercial Organisations – “Old” Hubs Local (Direct) – 400 Trusts – 200 Acutes / 150 PCTs / 30 Mental Health / 20 Others – Potential GP Consortia now Clinical Commissioning Groups
…do you sell on price or value? …how much capacity do you have?
Is Your Strategy Aligned to the NHS?
• The £20b challenge and the QIPP Agenda • Support and investment locally • Tri partite relationship – clinician / buyer / supplier • Transparent benefit to all parties • Strategy Meeting between ABHI and HCSA on 19 th July • HCSA National Conference in Manchester 2 nd /3 rd Nov “NHS Procurement “Where Next?”