The state of UK health procurement – BBC Radio “File on Four” tomorrow

Last week Andrew Lansley, the UK's health minister, claimed that 20 hospitals were facing financial ruin because of their Private Finance Initiative schemes. There was immediate pushback from those who saw this as a political manoeuvre (the deals were done under the last Labour Government), and some of the hospitals pointed out that their problems had more to do with the reduced funding from this Government.

The truth probably lies between the two extreme views. Some of those defending PFI have a vested interest as well, and there is no doubt that some PFI deals weren't particularly well structured or negotiated. But it would rarely be the sole cause of a Trust struggling.

Then we had the publication of the review of the NHS IT programme, which I think we all know has been an unmitigated disaster from start to finish. We'll probably come back to that later, but we’d point out, as we have previously, that these disasters always have a Minister behind them, or even a Prime Minister, wanting to do something that civil servants in the main probably thought was mad. This is a case in point. (We have another example tomorrow.)

But this is all rear view mirror stuff. How is procurement across the health system now?

Well, listen to File on Four, BBC Radio 4 tomorrow (Tuesday) evening at 8pm for a programme that covers that ground. Following my experience a while back, when my interview for another radio show got cut at the last minute, I hesitate to say this but – I may be featured in this programme.

And yes, I may have used the word “shambles”.  I wasn’t having a go at any individual procurement people or functions across the health system, but when I was interviewed I was (if they use this bit) very critical of the lack of overall direction or strategy for procurement across the whole health system.

We've featured some of the issues around GP Commissioning (here for instance). And while there are some great stories at individual Trust level (see our posts on Durham hospitals), the picture is mixed. But most clearly, the overall procurement and supply chain landscape is “confused and confusing”, with individual Trusts, regional Health Authorities still playing some role, NHS Supply Chain, Government Procurement Service, regional 'hubs' and commercial support units alla cting pretty independently.

There’s no clear vision – or even a cloudy vision - for what should be bought nationally, regionally or locally (which the NAO called for some time ago), and some of these bodies are frankly putting their own interests ahead of that of taxpayers and patients. This was all identified in the OGC Procurement Capability Review in 2007, but it appears that things have got worse, not better since then.

For instance, we're now seeing hubs getting into jvs, or quasi-privatizing themselves, while other Trusts look to outsource procurement to private sector providers, which while it may bring local benefits, will undoubtedly cut across NHS Supply Chain and existing hubs.  And the whole picture appears to be developing without governance, guidance or direction from the Department of Health, who seem to have pretty much given up on procurement.

Yes, we have the QIPP programme, and there's the odd useful initiative coming from them as we reported – but there’s just not enough resource going into this to really make a difference.

Another indicator is the lack of anyone at Director-General level with a procurement mandate in the Department of Health. And here’s yet another indication of how seriously the Department takes procurement - the advert for non-execs for the new National Commissioning Board, which will oversee key commercial and procurement decisions and issues across the whole health system. It will be an incredibly powerful and important body as the NHS goes through major changes. They want non-execs who “are likely to provide leadership in one or more specific areas: patient representation; finance and audit; performance management and governance; business development; and clinical leadership”.

Spot the omission in that list? For a body that is overseeing commissioning, commercial and procurement systems? That says it all to me.

And most worryingly, it’s hard to see how the NHS can possibly hit its targets and make the efficiencies required without becoming truly excellent at procurement throughout the whole system. What are the chances of that happening?

Anyway, listen to File on Four tomorrow if you want to hear more.

Voices (8)

  1. Rob:

    Peter – I would be extremely grateful if you could enquire directly with the NAO why their project, which was initiated in early 2006, took so long to investigate and publish its findings (Feb 2011). The NAO has stated that the NHS could save £500m a year – that’s over £2 billion over that period of time. And please don’t let them pull the wool over your eyes – I was one of the first people that they interviewed.

  2. Sam Unkim:

    I am afraid that I rather doubt that Barts have actually made a saving, rather they have managed to mitigate some of the dramatic prices increases that DHL ( NHS-Supplychain ), via their myriad glove suppliers, have had to impose on the NHS in the last 12 months due to the global surge in raw materials pricing.
    As Zoe points out in the interview, why does NHS Supplychain need to offer ,the NHS, page after catalogue page of thing like gloves. Are they chasing the 1.6 Billion turnover target at the expense of savings?.

    Surely bulk purchasing (and supply rationisation ) is done best by the NHS’s wholesaler, rather than leaving it to Hospitals themselves ?

  3. Final Furlong:

    A very good radio programme last night – thanks for alerting it to us Peter.

    I thought it was hilarious how they held up Scotland as an example of best practice and I quote “We have a new system from Procurement. There is now a weekly top-up system where one of the guys from procurement comes into the theatre and checks out stockroom…” State-of-the-art – sounds like the local ‘supplies team’ has simply changed its name to ‘procurement’ having implemented a bit of technology….

    And it was wonderful to hear how Zoe Greenwell, at Barts, saved over £300,000 (out of £700,000) on gloves by getting clinicians to pursue her approach to standardisation.

    Anyway, you can still download it here….
    http://www.bbc.co.uk/podcasts/series/fileon4

  4. VegasChild:

    Peter – 2 things. 1. Will you put a link to the programme on your website, for those of us who can’t get to hear it live ( surely you won’t get edited out again!) and 2. Can you post a link to the advert for non-execs to the National Commisioning Board? let’s do something positive about them not actively looking for procurement experience, by giving them lots of applicants to consider who have it!

  5. John Warrington:

    Peter, whilst I can understand why you think all of this, I wonder if you might have checked with us (DH) first to find put what we are doing to improve procurement I’m the NHS? I would be very happy to talk to you

    1. Peter Smith:

      John
      A fair point but as usual, the BBC don’t tend to give you a couple of weeks to do the research – it is “can we speak to you tomorrow?” I would love to take you up on the offer of a chat anyway. Outside GP Commissioning, which just worries the hell out of me, my main criticism is of the landscape really and lack of any apparent strategy there – what has happened with Hubs etc – so I’d be surprised if you can change my view on that unless there is some grand secret plan behind the scenes.. but I’d love to feature some of the good things that I’m sure you’re doing.

      1. Final Furlong:

        Sorry, but procurement is the NHS is still a complete mess. Chatting to lots of suppliers in the NHS and putting their more ‘innovative’ products into an internal ‘sales brochure’ doesn’t exactly represent a major ground-breaking initiative. It’s taken the DH almost a decade to get to this point.

        You’re spot on about the hubs. And procurement at the grass roots level (in Acute Trusts) is still developing rather than maturing.

        Ask CIPS how many CIPS qualified staff they have in the NHS (out of 1.4m people) – is it still less than 1,000? Let’s say that half of them work in ‘collaborative procurement’ environments, that leaves 500 buried in the rest of NHS landscape. Still managing supplies teams too, no doubt.

        I’m also keen to hear what the DH is doing to improve procurement in the NHS especially when its own CEO (DN) turned up at the PAC on procurement in the NHS, clearly stating for the public record – and much to the dismay and disbelief of PAC members – what his strategy and plans are for improving procurement across Trusts: “Nowt to do with us. We’re devolving it all, so it’s up to them.”

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