More from the NHS Procurement Strategy conference (but no strategy)

As we reported in our initial post on the recent “NHS Procurement Strategy” conference, Beth Loudon from the Department of Health (DH) had the unenviable task of explaining why she wasn’t going to present the new strategy! She’s very impressive, and actually pulled that off about as well as anyone could. So she told us that strategy was going to include:

  • NHS standards of procurement
  • Governance and metrics
  • Maximising procurement technology
  • Leadership & capability

It was also going to consider a number of “external environmental” factors – working with industry, innovation, collaboration and use of procurement partners, and procurement in commissioning.

However, just before the strategy was going to be published, the decision was taken that this “wasn’t ambitious enough”.  Very senior people (finally) “got it” and realised that  it needed to be stronger.

But, Loudon told us, it is agreed that:

  • Procurement is a key driver in delivering care and outcomes, not  just savings
  • Procurement is multi-faceted, both back and front of office
  • Trusts need to start making improvement at local level on understanding and improving procurement performance and becoming more transparent
  • There is no easy answer to transforming the function, the solutions lie in a combination of evolutionary / revolutionary approaches; local / regional / national actions, and process / cultural changes

So there is going to be an initial publication of a consultation document in May, leading to an “NHS owned” procurement strategy by the end of 2012. There will be wider consultation, and as we reported last time, “senior leadership” from the DH. Now we had it on good authority that leadership would be provided by was Sir Ian Carruthers; but we’re now hearing a rumour that wasn’t quite the done deal we thought. Perhaps the internal politics and power games in the Department are kicking in here…

Back to the event - after Loudon, Lord Hunt spoke. Before he got his peerage, he worked in health management for many years, as well as being a local politician, so he is genuinely very knowledgeable. He was particularly interesting in terms of the conflict between centralisation of procurement activities and the greater freedoms and devolved nature of the health service. This is indeed a huge issue, and no procurement strategy can be successful if it doesn’t address this very clearly.

Hunt feels that if the NHS doesn’t get its act together on procurement, in a couple of years there will be a cry of “why don’t you do centralised procurement in health like John Collington and co in the Cabinet Office do for Whitehall”?

I think he’s right, but the difference is that no-one has the levers to control hospitals now in the way that Cabinet Office can (sort of) mandate co-operation from departments. Hospitals are becoming increasingly independent, self-governing and even competitive with each other. So no-one is going to be able to force collaboration or compliance, even if we thought it was a sensible idea for certain spend areas.

Hence collaboration will be voluntary, which means that other factors need to come into play. For instance, real improvement is likely to need much better communication, transparency and information provision. Indeed, there may well be greater benefits for instance in more openness about pricing than there would be from simply struggling to put in place large-scale aggregated buying.

So we wait with interest to see what is in the May document – and while there are lots of good intentions, it is not clear that we’re much further forward really in terms of seeing significant improvement in health procurement.

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