More on NHS Procurement League Tables – Our Readers Comment

We had some interesting comments on our article about the NHS procurement “league tables”.

To remind you - NHS hospitals are now ranked in a league table based on how much they spend on commonly bought items.  NHS Improvement says there is still wide variation in prices paid, with some trusts paying more than double the norm for items like surgical scalpels. For instance, prices paid for a single pack of 12 rubber gloves can vary from 35p to £16.47, while the cost of a hip implant ranges from £761 to £3,669 according to the data.

Our old friend Bitter and Twisted highlighted an odd aspect of the data:

“The precision of the figures is quite interesting, Wrightington, Wigan and Leigh NHS Foundation Trust – Estimated savings target (lower level) – “£ 672694.057650001”.

 

Bill Atthetill said: “First it was the farcical Atlas of Variation, now this. If they need to publish a table publicly then it needs to contain complete, accurate data. This just puts the Department of Health in a very poor light. It will distract procurement teams from adding any strategic value by compelling them to beat up their suppliers over a few quid. I do feel sorry for all the supplier commercial and sales teams, especially in the top 10% of “volume” suppliers – they are going to be bombarded by requests as they are put in the cross-hairs of any tactical FD”.

Indeed, this is going to be challenging for suppliers, although maybe in some cases the hassle might be deserved!

Mr Grumpy said this; “There is this ambition it seems to have the entire NHS pay just one price for one item and make that uniform. I appreciate the rather drastic variations in price currently across the NHS, but most procurement functions in these NHS organisations will always strive for a better deal than one proposed by consortia silos. It’s what I’d expect any procurement function worth it’s salt to do.

This constant banging of the price per item drum the DOH and NHSI keeps banging. I really wish that was the only challenge NHS procurement was facing”!

There are a couple of key points to unpack here. If there really was just one price – and presumably one supplier – for gloves, would that really be a good thing in the medium or long term? Is a monopoly supplier a good idea? and what about innovation? Surely in a really competitive market, you see multiple suppliers continually striving to offer better value, so of course there are price variations at any single point in time. But how many politicians or top civil servants understand markets or economics?

And the final point Mr Grumpy makes about challenges. This is perhaps the most depressing aspect here.  We’re stuck talking about rubber gloves when procurement and supply chain functions should and could be contributing to far bigger issues and problems the NHS faces, from staff shortages and reliance on locum / temporary staff, to rotten PFI contracts, to wastage of drugs and other products.

But let’s give the final word to “Been around the block a few times” who said this.

“As much as I agree with all of the points made over the last 7 days on this subject, the “price” issue won’t go away in a hurry, so we better get used to it”.

Unfortunately I suspect Mr or Mrs Block is correct. So we look forward to debating this and other issues of note to the sector at the HCSA conference next week in Harrogate.

Voices (3)

  1. Sam Unkim:

    As I have pointed out before.

    The NHS use a huge variety of gloves from Marigolds to Lead Lined X/Ray Gloves.

    Whilst I respect the work PPIB are doing, I am still far convinced that this variety has been reflected in the their latest splashy headlines, revealed only to Jeremy Hunt in time for his recent rousing (for Daily Mail readers) conference speech.

    Similarly I fail to understand why Hunt is “bewildered” by the difference between a Littmann Classic Stethoscope (which will be carried as a badge of honour by doctor for a decades ) and a pound shop special left in a crash trolley drawer for anyone to use, abuse and dispose of after a single use.

    1. Final Furlong:

      Sam, each category strategy, using robust data, should (ideally) determine a wide range of key dynamics, including the optimum (and actual, based on reality) number of in-use products. In absence of any (robust) category strategy, everything is a best-guess.
      Eg: let’s say that each ortho manufacturer owns a catalogue of, say, 50,000 products, and let’s take a stab and say that each major ortho centre may use, say, 5,000 products in any one year. And let’s say that you would need (or would want) to keep four ortho manufacturers in the NHS to maintain clinical engagement, competition (given they keep buying each other…), and be able to conduct revisions (let’s not forget those…). So that’s at least 20,000 ortho products. That’s just for ortho. Notwithstanding the notion that clinicians (supported by procurement) may identify additional products used in other healthcare systems that are better, cheaper, more innovative along a specific pathway, or simply be a more up-to-date version (incremental innovation).

      Let’s take all of this with a pinch of salt. Just standard table salt, nothing special.

  2. Mr Grumpy:

    Peter thanks for the props. I want to just expand further on my comment around the one price per item. Taking the rubber glove. Now I know it’s not practical to have just one glove as per say for the NHS to use, when considering the non-latex element as well. So lets say a range of 5 to 6 gloves. The league tables highlight the huge variations in price that Trusts are paying for the same item and to me the message from Lord Carter is “Why are NHS Trusts not paying the same price for said item/range?” In my previous NHS life, when Framework Agreements were put in place on volume based pricing, suppliers were falling over themselves to offer further price reductions for exclusive supply contracts with individual Trusts as it is guaranteed demand. You could go as far to say that Framework Agreements served as a good cost benchmarking exercise if procurement departments wanted to improve on that pricing. I think it’s those complexities that are not given due consideration at higher levels. Does rationalising on NHS procurement agreements over the long term really add and deliver value? As you highlighted, where can innovation thrive? The risk of killing or stagnating a market increases. I’ve been out of NHS procurement for many years, and even now when speaking with former esteemed colleagues and other procurement professionals in the NHS, it’s a very complex beast into which there is no one stop shop ideal that will solve it’s problems.

    Absolutely agree on the other challenges. Agency staff and drugs. It’s policy that really needs to drive change in those areas and I’ve beat my head against a brick wall over the years trying to sell into the senior levels of management within a Trust that challenging and trying to change policy will see a lot of un-necessary cost driven out. I can imagine many NHS procurement professionals have experienced the same or similar frustrations.

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