Thirteen trusts are piloting a procurement system that places less emphasis on price, HSJ reports.
The trusts are part of a “private beta” testing group for a national procurement methodology that aims to judge medical technology products on the value they bring to care pathways and the wider health system.
Trusts piloting the methodology, including Guy’s and St Thomas’ Foundation Trust and University Hospitals Birmingham FT, are testing it on live procurements alongside the current way of evaluating would-be suppliers’ bids.
If it proves successful, the expectation is for the new methodology to be rolled out across the NHS provider sector in 2026.
The new methodology moves from the current requirement to judge the price and quality of competing bids to find the one with the best value for money, to one that judges the overall cost of a product and its wider value.
The Department of Health and Social Care predicts this new approach “will save billions of pounds by considering how well the pioneering equipment works for patients in the long term, supports patient and staff safety, and drives down future costs including warranty”.Draft guidance produced by DHSC provides new definitions of value in four “domains”, covering how a product would improve a patient pathway, how it supports patient experience and safety, the resilience of its supply chain, and how well it meets the procurement specification.
These four domains are to be given 50 per cent of the weighting when judging a tender for a procurement. Procurements are already obliged to give over a further 10 per cent of the weighting to social and environmental value.
The remaining 40 per cent of the evaluation weighting will be about “whole life cost”, including the purchase and post-warranty support costs, where relevant.
The guidance shifts from a subjective consideration of quality to a clearer objective definition of what value means as something that can be measured, according to Brian Mangan, CEO of Luach Consulting Group and formerly NHS Supply Chain’s value based procurement (VBP) project leader. It also moves from price to cost, giving “a more holistic way of assessing the financial value of a tender”, he said.
Local procurement leaders have welcomed the move, with one veteran procurement director telling HSJ the new guidance is “an important and timely intervention from DHSC”. They said VBP is “fast becoming a national policy” but “the consistency in process and practice that we’ve all desperately needed has been starkly absent.”
They warned that this will require a change in focus in the NHS: “Senior leaders in both procurement and finance need to rapidly shift their focus from price and in-year savings to value and outcomes. From cheapest-first to patient-first.”
This echoed concerns from other local procurement leaders who warned that the move to VBP will fail unless there is a cultural change in NHS finance teams from one that focuses on cutting costs and tracking savings to one that tracks value delivered.
Date: 8 October