Health procurement gets airtime at the Public Accounts Committee

OK I confess - not on the ball there.

We published our first piece yesterday about the QIPP programme in the Department of Health, totally forgetting that the Public Accounts Committee was discussing the National Audit Office report on consumables procurement in hospitals on Tuesday (a session which I had been warned to look out for.)

Supply Management has a good report on it anyway here. I liked this quote from Sir David Nicholson, Chief Executive of the NHS.

Sir David said that although he had “no power to make it happen”, it was more a matter of foundation trusts being able to deliver efficiency by getting information systems right. “The idea that we can do all this from Whitehall is nonsense,” he said.

That's top civil servant code when speaking to politicians for "p** off and leave me alone, it's nothing to do with me and / or I can't do anything about it".

Which is quite true of course, as Foundation Trusts are by creation and definition independent.

I was also interested in the comment from Howard Rolfe, director of procurement at the East of England NHS hub, who said;

"At a national level we have NHS Supply Chain but it is the middle level of hubs and private sector organisations that is complex. There is conflict between hubs trying to take over the work of other hubs. I personally don’t think hubs going to the private sector is useful.”

That's indicative of the war breaking out between 'new' ventures like the Steria NHS Shared  Business Services / North-West hub, and the potential HPC / HCA link up (see here), versus existing (and in some case struggling) hubs still in the public sector, NHS Supply Chain (DHL).  Very messy.

Here's the OGC Procurement  Capability Review of Health, from November 2008, covering the same topic;

There is competition (both overt and covert) between procurement organisations supporting the front line Trusts -particularly hubs, NHS Supply Chain and NHS PASA, as well as external providers. Some of this competition may be healthy, but it appears to be promoting inappropriate behaviour and distracting from strategic objectives.

Although there is a key role for a “regional”procurement tier and the hubs have achieved considerable short term success, the current hub funding model is unsustainable as it focuses on short term price reduction rather than improving real value, and there is a lack of clear direction. Some hubs are pursuing innovative business models, but without a sense of how it might fit into the overall procurement landscape and NHS “family”.

We (I was a reviewer on this study) pointed out these issues with the 'landscape' to Nicholson  (before his knighthood) and others then.  In response, PASA got abolished (which we didn't recommend)  and the 'commercial support units', another new set of region commercial bodies, were invented.  I'll leave it to readers to judge whether any progress has been made since 2008, and perhaps also judge where procurement in hospitals sits on Sir David's no doubt very challenging list of priorities.

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  1. Final Furlong:

    Peter, you’re spot on.

    The DH has spent a considerable amount money trying to address the same set of issues over a considerable period of time.

    NHS PASA and NHS Logistics were originally created (circa 1998-2000) in response to a system-wide failure (replacing a previous ‘national body’).

    Circa 2004-2005 onwards, a truly enormous amount of money was poured into SCEP (Supply Chain Excellence Programme) and ATK, the lead adviser, generated a set of recommendations which include the outsourcing of NHS Logistics (and relevant parts of NHS PASA), the formation of 10 ‘Collaborative Procurement Hubs’ (there are 9 government regions but 10 SHA regions – where in local government is the ‘region’ called ‘South Central’?), a national procurement programme across a range of specific categories (ideally suited to being purchased at a national level), and a slightly ‘tangential’ organisational review of NHS PASA. All of which would ‘address’ the circa £15 billion of products and services purchased by NHS Trusts.

    Notably, the recommendations also incorporated a range of other ‘best practices’ which would need to be pursued, if the DH and NHS were ever to achieve the status of ‘excellence’ in their procurement of products and services. These included a national Supplier Relationship Management (SRM) programme (ideally led out of the ‘NHS-facing’ NHS PASA) and, more importantly, a new national data warehouse of suppliers, products, pricing and spend across all Trusts. The former was never pursued by NHS PASA, while the latter dropped off the radar of the DH, never to be seen again – until recently, that is, when best practice procurement practitioners have subsequently arrived on the edge of the same old landscape and asked the same decades old question “erm, why don’t we have this data?”.

    So, the DH, in 2006, launched ‘national procurements’ across a range of categories, at the same time as launching hubs which immediately launched regional procurements across the same categories, at the same time as launching NHS Supply Chain which, erm, launched procurements across the same categories at national, regional and local levels.

    I think this landscape is in desparate need of a qualified landscape designer, and a new gardener….

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