The Advisory Board – procurement, supply chain (and more) support for the health sector

We featured some good work in the UK’s health service driven by the Department of Health recently, but there are private sector driven initiatives going on in the sector that also look capable of delivering real benefits.  I recently spoke to the Advisory Board, an originally US based organisation that provide a varied – and unique in my experience – range of services to hospitals, trusts and other health organisations. In the US, they’re very successful, supporting hundreds of health organisations, including “93% of the top hospitals in the US”.

They’re now looking to grow in the UK as well, and are already working with a significant number of Health Trusts this side of the Atlantic. They don’t purely support procurement and supply chain activities in the sector,  it’s worth pointing out – their interests cover health and hospital strategy, finance, HR, Marketing and clinical matters as well. The services are paid for generally via an annual subscription from members, which gives access to the wide range of services

Most of the solution providers I meet are easy to classify – they are consultants, or software providers, or outsourcers. Sometimes there’s  a bit of a crossover, but the Advisory Board are most unusual in the range of services they provide, even if we just consider the procurement area.  At one level, they are a spend analytics firm. Part of their service is in analysing hospital procurement spend data in a reasonably “traditional” spend analytics manner. Their capability here looks good, not dissimilar to the best firms in our more conventional procurement solutions provider market.

But it’s really what they bring in addition to that makes then different. They act as a membership / community organisation as well – building communities with their clients, so (for instance) they will develop research programmes and agree priorities that are of interest to a specific interest group within the health community, sharing the costs and results across that community. So they have some of the elements of community type organisations such as the not-to-be confused “Strategy Board” organisation.

But the Advisory Board also bring their own deep expert health related knowledge and market information to the table, which takes them into what we might term the consultancy and content / market intelligence markets as well. So category analysis in specialist medical spend areas is part of their offering, along with “themed” conference calls or webinars, perhaps around a particular supplier or product.

They also claim to be the largest training company in health in the USA, so as you can probably tell from my attempt to sum up their proposition, it doesn’t fit neatly into one of our usual buckets, but it all sounds potentially very valuable to trusts and other related organisations.

Although there’s not a huge overlap in services, there is some read across to Peto, who we featured previously here, in that Advisory Board is providing very useful services related to hospital spend that one might argue a more centralized Department of Health could supply. But in the highly devolved, cash-constrained  environment we now have in the heath sector, I suspect there is little chance of the Department having the funding to carry out this type of activity or the power to mandate such work. So there are opportunities for providers like Advisory Board to really help the sector – and of course succeed themselves in the process.

In addition to all of this, the Advisory Board is also developing a spend and price benchmarking service which could turn out to be the most useful thing they do in a UK health context. We’ll feature that in another post shortly, but in the meantime we’d suggest they’re worth a look at least for any trust interested in improving procurement, efficiency and general performance.

Voices (4)

  1. Sam Unkim:

    But on the other hand……..

    Let’s not forget, the NHS is supposed to have procurement hubs, capable of carrying out all of the functions above & the QIPP work stream is tasked with these as well
    &
    Of course AB is developing a benchmarking service. In effect they roll the PO data of each new NHS customer into their previous dataset. Hardly ground breaking stuff given each Trust has to pay for the privilege.
    &
    Have we NHS purchasing staff, been so alienated from each other (by artificial market competition) that the only way we can communicate, is through membership of an American Consultancy “community”

    Finally
    All these kind of companies really offer is a chance for CEO’s and DoF’s to starve their own internal staff of commitment and other resources whilst they wait for the next magic short-cut to procurement savings.

    1. Final Furlong:

      Hubs, and the like, don’t do this. They can’t afford it.

      There is plenty of benchmarking being undertaken and no-one is doing it for free. Data in the AB model is regularly updated (I am told).

      Yes, NHS buyers could and would communicate with each other but solution, aside from email, exists (yet).

      NHS must deliver £1billion+ in procurement savings do why are you surprised that CEOs and CFOs are doing everything they can to target product savings than people.

      1. Rob:

        The NHS once owned the capability to deliver much of this, in a national enabler called NHS PASA.

      2. Sam Unkim:

        Things aren’t quite some bleak
        The Hubs are doing a lot of work in this area, although piecemeal. They have to compare prices between the members to discover contract opportunities and they gather Trust CFO’s together regularly to discuss shared projects
        How can the NHS not afford to do this other stuff internally? With Jim Easton leaving, has the NHS given up on QIPP

        Each Trust paying ABCo £100k annually….It’s still the economics of the madhouse.

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