NHS procurement – a dose of communication salts needed

(We're pleased to feature a guest post from Jonathan Betts of Science Warehouse, providers of eProcurement solutions to public and private sector organisations).

I’m a relative newcomer to working with the National Health Service, but talking in various business forums I usually get a couple of comments from other suppliers:  

  •          How difficult it is to do business with the health service
  •         Where business is being done the margins are, let’s say, comfortable.

I can sympathise with the first point, having been through the machinations required to get onto a contract. And to an extent this is understandable – as the guardians of the materials that are applied to our bodies and used to manage medical information, rigorous gatekeeping is required.

The second point perplexed me though; having been through the contract process I was well aware of the cost pressures being applied on the health care supply chain! Having increased my knowledge since though, I believe that low levels of procurement influence are the root cause (I’ve heard that in some trusts the level of spend under management is as low as 15%).Why is this the case?

The procurement landscape in the NHS is undoubtedly complex. The centralised approach of the past and the development of collaborative hubs have resulted in a relative under-investment in procurement capability at the local level in some trusts at least. Procurement is subsequently seen as a tactical order processing operation rather than truly creating value.

Evidence of procurement’s status can also be seen from a quick look at the job boards. A typical NHS Category Manager role markets at £30-40k whereas the equivalent in the commercial sector is £35-70k. Also revealing is that a search for ‘NHS CPO’ on Google produces results for Carbapenemase Producing Organisms (nasty antibiotic-resistant bugs) but nothing to do with strategic procurement!

Nevertheless, it is clear that investment in procurement capability and commercial expertise is critical to the health service achieving its demanding savings goals. Sir David Nicholson’s ‘NHS Procurement: Raising Our Game’ report last year flagged the need for better and smarter procurement.  The report usefully raises profile for procurement; but it’s important that the buzz doesn’t stop at the threshold of the purchasing department. The messages need to percolate out to CFOs and department heads and make a difference on the ground.

So how can procurement gain that influence and credibility in Trusts? I believe professionals have to combine a “local” approach with the ability to see the wider picture and think strategically.

“Acting local” means overcoming the specific legacy processes and institutional inertia in their organisations. This may seem a Sisyphean task but a starting point is to recognise and leverage local sources of expertise. A consultant friend of mine who works in a busy acute trust says that Nora* in their department does all the ordering:

 “Nora understands the needs of the clinicians and knows the products. Her supplier relationship skills mean she can get quick delivery on goods and gets a better deal than the central contract team”.

Nora is bringing something to the users that procurement does not. So procurement has two choices here – to learn from Nora and make sure they offer a similar level of understanding and service to those users. Perhaps even recruit Nora into the procurement team or at least enlist her as a local champion? Or, if actually Nora and those clinicians are acting against the wider best interests of the organisation, procurement needs to provide the evidence to demonstrate that big-picture cost or risk to the organisation.

However the Nora type issues are handled, procurement needs a strong communication plan combined with a confident approach and the demonstration that procurement is an enabler rather than a barrier. The Nicholson report and robust figures can drive confidence. Simple, consumer-like buying tools to make compliant purchasing easy can help to drive enablement.

The pressures on the NHS of expanding demand and reducing budgets require innovation. In the case of procurement the first step is the acceptance of a ‘new procurement’ – one that delivers value and doesn’t just process orders. Confidence, strong communication and enabling tools are the three key ingredients in influencing behaviour.

*Names changed to protect the innocent!

Voices (12)

  1. Rasputin.:

    Simon, your valid points just dont make as good reading as the lazy gross generalisations peddled by the myth seekers.

  2. Simon Walsh:

    The Health Care Supply Association has just held a very successful one day Conference that focused on all the good work that is taking place in NHS procurement.

    We in HCSA are committed to increasing the skills and influence of our members in the NHS.

    It is easy to criticise NHS procurement….we prefer the harder path of making it better through professional development and increased profile.

    Simon Walsh

    Chairman

    http://www.healthcaresupply.org.uk

  3. Pauline:

    Without sounding like a real bureaucrat….the majority of consultants and ‘Nora’s’ have no idea of Public Contract Regulations or the Trust Financial rules governing procurement. Good NHS teams work with the regulations, educate medical teams, but are often seen as the policeman by the Nora’s and ignore (until of course there is a problem that they then need to be bailed out of by the professional team).

    My long experience is that the good teams work with the consultants to meet their requirements with each respecting the part each has to play as a professional to ultimately meet the patients needs.

  4. Michael Bennett:

    Nora has some client relationship management skills, some transactional procurement capability, and some deep category knowledge, but that’s about it. Sam is right about Nora having been groomed. She’s a salesman’s dream. One time transactions, last minute requirements, zero strategy, off-contract spend, and all on the supplier’s terms no doubt.

    Nora’s are everywhere (I even think I might be married to one!). Because we all spend money in our personal lives, we all have some purchasing skill, but the art is in having the full procurement tool kit at your disposal, knowing which to deploy in what circumstances, and to be able to do so with equal skill. The challenge we continually face is to make certain that the difference is recognised, and I mean that in the broadest sense.

    Sorry Nora, you’re doing shopping, not procurement.

    1. bitter and twisted:

      I guess we are all refighting our last war.

  5. Sam Unkim:

    Noreen’s incentives are a two year pay freeze, followed by 1%, and the scorn of everybody else in the Trust.

    Or did you mean her pride in doing her job well and the hope that some of the savings she makes daily, can find their way back into resourcing front line care, rather the pockets of Covidien directors….

    1. Dan:

      in hindsight, this career sucks

      Is it too late to become a struggling artist?

    2. bitter and twisted:

      if Nora “can get quick delivery on goods and gets a better deal than the central contract team” then the central contract team shouldnt get 1% raises. They should get fired.

      1. Dan:

        Fired? In the public sector?

        Bwahahahahahah!!!

        Thanks. I needed that.

  6. Sam Unkim:

    Looks like it’s me to go first………………..

    We all know “Noras”; we have to deal with them on a weekly basis.

    She has actually been thoroughly groomed by “her” suppliers to passively accept their “best” pricing and last minute deliveries, bought down by that nice sales-rep, who stays for a coffee and a chat afterwards.

    I bet it just breaks their hearts, to tell her about unexpected price hikes, due to earthquakes, chinese demands & CO2……..

    1. Final Furlong:

      Bloody Nora! (Before I go on, did you know that Bloody Nora refers to a maiden who once stabbed someone with a celery stick. Just goes to show, with all of this publicity about healthy lifestyles – salad can kill!). Jonathan makes a noteworthy point about relationship management skills. But, as you say Sam, there are many folk like Nora across the system – some quite gifted, with a deep understanding of their products, working with procurement on some very complex programmes – while others are gifted amateurs, simply acting as gateways to clinicians’ preferences. Nora is often a nurse, sometimes an admin person – always in ‘scrubs’ – and it’s quite true that their specific blend of relationship management skills are often favoured over the ‘suits’ in the centre. It is important to note, however, that senior clinicians and consultants are exposed to a Nora pretty much every day, and always in the context of tactically assuring supply. Indeed, suppliers love them because they enjoy a free pass to ward and clinical areas (where many trusts have closed this loophole through an effective reps’ policy). Folk like Nora have often earned their stripes in theatre and have the similar ‘patient-centred’ mentality as their divisional sponsors. So, not an easy set of dynamics to replicate. Some trust procurement teams have already absorbed these folk and, if they are a qualified nurse, have successfully influenced them to manage formal ‘clinical product evaluation groups’. Finally, many if not all trusts have a team at the centre which continually seeks and secures best pricing (in the context of each hospital – as opposed to any national benchmarks) for med surg’ products. However, if Nora (in this instance) is independently negotiating deals for high value products, like prostheses, then the trust is truly in the dark ages, and is not a sound reference point when determining the level of maturity within the system as a whole.

      1. bitter and twisted:

        Nora has a cousin called Noreen. Shes a CIPS qualified procurement professional. Shes incentivised to deliver savings, and savings she will deliver…and damn the consequences.

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