UK Health Service Procurement – a look at “Raising Our Game”

In lieu of the NHS Procurement Strategy that was expected earlier this year, and has been delayed for further consultation and consideration till the end of 2012, the UK’s Department of Health published a report recently. titled “Raising our game”, which contains thinking about what needs to be done in the sector.

Whilst it may not be a full procurement strategy, there’s actually a lot of content in the document. So we’ll feature here the “actions” that are listed in it, and give a few of our own comments as well on each of the six 6 areas for improvement discussed - we’ll cover three today and three in part 2.

1. Levers for change

 Action: We will work with the relevant bodies such as Monitor to strengthen trusts’ accountability for procurement with implementation effective from 2013

Action: By December 2012, we will create a dashboard of indicators and measures to help trust Boards strengthen their accountability for procurement and to ensure the ability to report publicly

Action: We will develop a number of comply or explain initiatives, such as compliance to national framework agreements

Spend Matters comment: We (OGC) wanted Monitor, who oversee the self-governing Foundation Trusts,  to take more of a role when we did the Procurement Capability Review back in 2008. They weren’t interested, so I hope they will be now. The dashboard may be useful; I’m pretty cynical about “comply or explain” but I suppose at least it generates feedback about why national deals aren’t being used (taking the points we made recently about non-compliance being useful to procurement...)

2. Transparency and data management

 Action: Trusts should publish all tender and contract information for contracts over £10,000 in Contracts Finder

Action: Trusts should share their procurement data with other trusts for the purposes of benchmarking

Action: We will work with trusts to help them collaborate to benchmark their purchase information such as prices paid

Action: We will develop a suite of case studies of current procurement good practice

Action: We will provide financial guidance to support trusts’ investment decisions in procurement technology

Action: Trusts should include the requirement for suppliers to provide GS1 GTINs (Global Trade Item Numbers) and associated data as an integral part of any procurement process. In addition trusts should make it clear to their suppliers that provision of GS1 data will be evaluated positively in any competitive situation and over time provision of the data will become a mandatory requirement

Action: Trusts should analyse their non-pay spend and assure themselves they are complying with available contracts

Action: Trusts should analyse their non-pay spend and set themselves goals to ensure improved coverage by their e-procurement systems

Spend Matters comment: There’s a lot in this section.  We clearly need a national spend analysis programme – in the way that GPS are analysing data across all of Whitehall using the BravoSolution platform, we need the same for the health sector. There’s also the interesting comment that, “Trust Chief Executives tell us they would like to see price and product comparison systems that allow them to benchmark prices and performance, but they are not sure where to invest…” We suspect Mr. Trent of Peto will be offering to provide the answer to that (and they don’t even need to invest!)

3. NHS Standards of Procurement

Action: Trusts should appoint a Board executive to be accountable for procurement performance, preferably the operations or commercial director

Action: Trusts should nominate a non- executive director to sponsor procurement

Action: We will launch a set of procurement standards and a portal for the NHS to share best practice (Didn’t PASA have some of this before it was abolished)?

Action: Trusts should review their performance against the NHS Standards of Procurement and revisit their procurement strategies to ensure they align with the trust’s business priorities

Action: We will develop an independent diagnosis and accreditation system to allow trusts to assess their procurement capability

Action: Trust Audit Committees should regularly review procurement

Spend Matters comment- very interesting that the suggestion is for procurement to report to operations or commercial, not Finance. My sources tell me that’s apparently because there’s a feeling that Finance focus too much on cost and not enough on whole life and outcome / output measures of value. I like the idea of the non-exec sponsorship and Audit Committee reporting.

More to follow.

Voices (3)

  1. Mark Wasmuth:

    Healthcare regulators worldwide are adopting an international unique product identifier standard (such as GS1) and an international naming standard for Medical Devices (such as GMDN & Snomed CT) to support improvements in patient safety and healthcare efficiency. Why would the UK decide to adopt an alternative approach?

  2. Sam Unkim:

    Re 2. Transparency and data management
    GS1 GTINs
    Problem here is that it will take 3 to 5 years of contracting churn before we see any impact of GTIN through contracting unilaterally….
    Given the urgency perhaps the NHS (Tim & Beth ?) can take a lead from Australia and contract with GS1 or GHX,@UK,PETO to finally provide a (data rich) single catalogue solution

    http://www.gs1au.org/services/gs1net/industry/npc/index.asp

    Without which, we are never going to be able to benchmark effectively or even to consistently describe & classify products internally at each NHS organisation.

    Aaaahh but costs I hear you say.
    Well compare this to each Trust building its own 40k+line catalogue from scratch (and agonising over which Eclass to apply to each product) or contracting individually with one of the above suppliers
    and this looks like a saving to me !!!

    P.S. is a Wrist Brace, a splint (GMB) or an appliance (GMA) ?
    Answers on a post card to NHS SupplyChain who can’t seem to make up their minds.

  3. eSourcingSensei:

    More and more activities in the Publc Sector – exciting – but some say I am easily pleased…………….

    Now I may have missed a trick two years ago when I met up with some Procurement representatives form the main four areas of the Public Sector, including the Dep Of Health………….why………….well because of the quote you placed in the above piece:

    “Trust Chief Executives tell us they would like to see price and product comparison systems that allow them to benchmark prices and performance, but they are not sure where to invest”……………….

    Now my limited knowledge was/is that they already have access to such a system and have had such for nearly 18 months (I am not naming the provider just in case I am completely wrong, but I don’t think I am)………so why this statement

    I have to believe that the complexities of the way government works and individual parts of the Public Sector work means that everyone ends up working in isolation – if I am wrong in that (I am not in the Public Sector as you can tell) then I start to think that the Procurement body (again I presume this at Leadership level) have done a poor job in promoting their capabilities and abilities to provide a service with the tools they have available that will deliver exactly what this and other teams/departments/councils etc need

    I accept I may be naive but it is beyond my comprehension that there is not greater knowledge of tool sets available and greater knowledge on how to use and exploit such tools to the greatest benefit of the Government and in turn to us all as tax payers and citizens of the UK………………..

    My apologies if I’m barking up the wrong tree, but it all gets a little frustrating after a while to see mission statements of what departments/sectors want to achieve and state they are looking for things they already have available to them…………..

    On a positive note I applaud the idea of Procurement reporting to any function other than Finance – Commercial is great – release the chains and set that Procurement captive free!!!

    Sensei

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