Eggs, Gershon and NHS Procurement of Temporary Staff

We are delighted to bring you this post from John Milton, Business Development Director, Comensura, supporting our Health Services topic for November.

The NHS faces mounting pressure to deliver sizeable savings. The burning question is of course, how can these savings be delivered without compromising service?

The same question was asked of Local Government by Sir Peter Gershon in his 2004 Comprehensive Spending Review. Gershon forced the issue with Local Government, empowered procurement and made it think outside of the box. He made procurement break a few eggs, metaphorically speaking. Change, dressed as innovation and continuous improvement, became de rigour.

The results? In the temporary staffing industry, where the introduction of our neutral vendor model has seen agency margins, pay rates and overall usage brought fully under control, we have seen substantial savings and demand management that has in some cases seen council expenditure fall by over 60 percent.

Can this be replicated in the NHS? We believe yes, but it will certainly take time and require NHS procurement to break a few eggs too! Here are our suggestions on how this can be achieved:

1.   Understand the category. In the world of staffing, particularly locum doctors and nurses, I have not yet met an NHS buyer who could provide a detailed breakdown of their charges where a Preferred Supplier List (PSL) was in place. PSL pay rates (and recruitment agency margins) are regularly escalated, often at the last minute to fill a vacancy, with margins as high as 45 percent. Speak to a Managed Service Provider (MSP) with experience of managing NHS expenditure. The more you understand the category, the more you can influence it.

2. Throw out the rule book. The recruitment agency community thrives on spot selling because it maximises their profit. Demand outstrips supply, especially for locum doctors, so a key question has to be, is supplier consolidation really practical?  Of course not, but traditional procurement principles always seem to suggest that the best way of getting savings is by reducing the supply chain and leveraging total spend. Consolidation of recruitment agencies might be appropriate but it’s equally likely that it won’t. We believe, the first thing is to gain 100 percent visibility of expenditure and put control processes in place through the implementation of an MSP.

3. A framework agreement should support the process, not be the process. A framework agreement is designed to help you achieve your goals – if it doesn’t, don’t use it! Of course you need to understand the category first before you can set your goals. Don’t select recruitment agencies because they are on a framework, select them because they are what you need.

4. If it sounds too good to be true, it’s unlikely to make much of a difference. Delivering the same services for less requires change. No-one, not even Paul Daniels, can wave a magic wand and ‘hey presto!’ deliver the savings without work on all sides. Any sales pitch that professes to do so is more like a session with Derren Brown!

5. Talk to a specialist. If you want the medical locum category properly managed, you’ll either have to do it yourself or bring in an expert. For temporary staffing, the easiest way to help you reach a decision on this is to speak to an MSP, not a recruitment agency. Remember, a recruitment agency is an expert in supplying workers not managing the supply of workers. There is a fundamental difference.

It is without question that to operate efficiently, the NHS requires medical locums to support service delivery. NHS procurement professionals have a real opportunity to deliver greater value by gaining a greater understanding of the temporary staffing category. To do this will take time, be bold and break a few eggs along the journey. Yet, if managed appropriately, accounting for the high demand and low supply of candidates, procurement can deliver sizeable savings.

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  1. Stephen Heard:

    Hello John,

    I can relate entirely to this situation as I was recruited into OGC Buying Solutions in 2003 from the private sector to enact the changes that Peter Gershon recommended. We had some spectacular successes during my time at Buying Solutions (and some that were not so successful!) and then I left in 2008 to try and replicate this in the NHS. I should have stayed where I was as trying to secure the necessary behavioural changes, particularly in clinicians, was nearly impossible so I left in 2012 and set up on my own where bizarrely I’ve had more success at securing the necessary changes. As they say you can take the man out of the NHS but you can’t take the NHS out of the man!

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