Chris Whitehouse Q&A: The Future of NHS Procurement

Last year, Procurement Magazine spoke to Richard Maddison, Public Affairs Market Access and Strategic Healthcare Manager at Essity, a leading NHS consumable products supplier, about the work the company has been doing to generate an evidence base of case studies to support the development and introduction of a new value-based procurement model for the NHS in England.

Chris Whitehouse, an expert on MedTech and health policy, spoke to Procurement Magazine about the progress made towards the launch of the new methodology and highlights some of the remaining challenges that must be addressed if it is to be successful.

The government announced last September that value-based procurement (VBP) for medical devices was to be rolled out across the NHS in England. Where are we with that and why is there little sign of it happening yet?

Progress behind the scenes has been very positive. Officials of the Department of Health and Social Care’s (DHSC) Medical Technology and Innovation Directorate are currently reviewing the results of 13 pilot procurements that adopted the new VBP assessment methodology to see if any minor tweaks need to be made before it is launched across the NHS in England.

Ministers have been saying that they hope to launch in “early 2026” but that has slipped a little and we’re now hoping to see it actively promoted as official guidance across the NHS in England in June. In the future, if the methodology works as planned, then it could become mandatory for use. There are senior figures in NHS England who are enthusiastic about the approach and are talking about adopting it for all NHS procurement, not just MedTech. That really would be something of a paradigm shift!

What are the key elements of the new methodology, and what difference will it make in practice to suppliers, patients, clinicians and NHS trusts?

In the past, NHS procurement has typically attached as much as 90% of any weighting when assessing medical devices for procurement to price, yet it’s not rocket science to realise that when it comes to medical devices the cheapest product is unlikely to be the best, most innovative and most patient-friendly one.

The new approach will do two things in relation to price assessment. First, it will be a shift from “price” to “whole system cost” - comprising of the purchase cost and post-warranty support costs where relevant. The second change is to limit the weight that can be given to such costs to a maximum of 40% of the overall score. That’s a big change, but will simply bring the NHS into an approach to product value assessments that’s been around for decades in other sectors.

The bigger share of the score, a minimum of 60%, will be allocated to five of what the DHSC are terming “value domains”:

• Social value: will the device generate wider social and environmental benefits.
• Efficiency: to what extent will it improve the Patient Pathway.
• Patient and staff: how will it support patient experience and safety. 
• Supply chain: does the supplier have a resilient supply chain.
• Purpose: does the device meet the buyer’s specification.

Again, that 60% weighting for the value domains could increase as the 40% for whole system cost is reduced.

Officials have likened the approach to the way a Which? guide might enable a consumer to compare and contrast the different characteristics of a wide range of washing machines from different potential suppliers.

Will the new VBP methodology be aimed at community care, or just acute sector procurement?

The new VBP methodology is intended to be adopted across both primary and secondary care, but take-up, in my view, will be uneven. Some acute trusts will realise quickly the huge benefits to patient experiences and outcomes that VBP can deliver, with significant overall cost saving to the trust as a result.

Others will hang back, stuck in their old ways, stacking the questions better to reflect the historic procurement focus on driving down price. There risks being a lagging behind in primary care, too, as, despite the talk of patient pathways being at the heart of service provision, sadly that just isn’t always a reality when it comes to medical devices and consumables.

Is the new methodology being used by NHS Supply Chain for its national framework tenders?

Well, NHS Supply Chain (NHSSC) has claimed to be adopting VBP, promoting several case studies on its website, but worthy as these are, they aren’t using the standard methodology developed by the DHSC, which begs the question as to why not? There is a risk of real confusion if different models are being promoted by NHSSC and the DHSC, and certainly in recent tenders for national frameworks NHSSC hasn’t been either using the standard methodology or really embracing the principles of VBP when it comes to putting patient experience and outcomes at the heart of the value assessment.

NHSSC must raise their sights from short term savings delivered by haggling over price and cheapest product, instead embracing longer term and whole system savings. We have to wonder whether they are organisationally capable of this paradigm shift. And NHS trusts must be given the same flexibility and encouragement to work for longer term system savings, rather than short term cost cutting. The DHSC and NHS England must encourage this shift on the ground.

What remain the main barriers to the successful roll-out and adoption of VBP?

For VBP to deliver its full potential, it must, from the outset, be driven by a focus on patient experience and outcomes. In practice, this will need clinicians to be clear about the improvements in outcomes that they want procurement to deliver for their patients, and it will need patients and their advocates to be fully involved in shaping the tender process to ensure that it is the right device attributes that are being prioritised in any given procurement. Yet, all too often, clinicians and certainly not patients, are not involved in procurement. This needs to change, and will need engagement across the NHS to bring it about.

Similarly, the finance and administrative management of NHS organisations will have to be woken up to smell the coffee, to see the real benefits that consideration of a whole system approach, structured around patients, can bring. Instead, historically there have been too many silos, each one setting targets and incentives to reduce item price and total spend. The change that is needed in these approaches is colossal.

Pilots to date have focused on innovative products, but there is much value to be delivered by adopting the approach rapidly for established products, too. Integrated Care Boards must enthusiastically adopt the approach and embed it in the procurement processes and contracts.

Is the new approach likely to be adopted by the NHS in Scotland and Wales?

Already Wales is piloting VBP for some procurements, and we’ll be working with the new Welsh Government, after the elections in May, to harness, for example, the enthusiasm of Swansea University’s renowned Value-Based Health and Care (VBHC) Academy, to demonstrate the real benefits VBP can deliver in patient experience and outcomes, as well as cost savings across the health and care system.

Scotland has its own approach to procurement through its NHS Scotland Procurement Strategy 2024-2028, which seeks to embed sustainability as a key value in procurement, but there’s more needs to be done to ensure that patient outcomes are at the heart of the process in future, as set out in the Scottish Chief Medical Officer’s vision for Delivering Value Based Health & Care. And whilst NHS executives in Scotland are unlikely publicly to want to admit it as we run up to elections for a new Scottish Government in May, there’s no doubt that they will be watching closely what happens in England as the new VBP methodology is rolled out.