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19.12.18

NHS Supply Chain: Driving the way forward

Source: NHE Nov/Dec 2018

Jin Sahota spent two years at the Department of Health and Social Care (DHSC) establishing the future operating model for the new NHS Supply Chain. Now, as the organisation’s CEO, he talks about what’s changed.

Over the next five years we have set ourselves an ambitious goal of delivering £2.4bn of savings for the NHS by providing clinically assured, high-quality products at the best value for NHS trusts, by using the immense collective purchasing power of the NHS.

Our contribution ensures that each pound we liberate from negotiating a better deal is another pound for our frontline services and, in turn, for enhancing patient care.

Why was there a need to transform NHS procurement?

Often overlooked, procurement is an area that commands high spend; it can make a real difference and bring money back to the frontline.

The NHS currently spends £5.7bn on everyday hospital consumables, common goods, high-value healthcare consumables, and capital medical equipment. Although savings have been made in procurement, there is still huge potential for the NHS.

In February 2016, Lord Carter published a report identifying unwarranted variation in procurement across the NHS and the need to improve operational efficiencies in the way the NHS chooses, uses, and purchases supplies.

Following the report, the Procurement Transformation Programme was established by the DHSC to undertake this transformation and deliver a new NHS Supply Chain.

The new NHS Supply Chain

The new operating model for NHS Supply Chain is now in place and operational. There are 11 specialist Category Tower service providers delivering medical, capital and non-medical products and services, and two support services for logistics and supporting technology.

The management function of the new NHS Supply Chain, Supply Chain Coordination Limited (SCCL), manages the towers and ensures that they work on behalf of the NHS to deliver clinical and non-clinically assured, high-quality products at the best value. The towers will do this through a more sustainable approach, including more rigorous and responsive management of supplier accountability, as well as through category strategy development.  

Our goal of saving £2.4bn by 2022-23 will be achieved by:

  • Reducing unwarranted price variation and increase product range optimisation across the NHS;
  • Delivering clinically-assured, high-quality products at the best value and supporting procurement activity across the NHS;
  • Leveraging the buying power of the NHS at a national level;
  • Increasing usage of NHS Supply Chain from 40% to 80%.

What has been achieved so far

Our aspiration was to set up one of the most powerful procurement entities in Europe, and our achievements show that we are realising this vision.

To date we have awarded over £1.5bn of contracts, successfully launched the new management function, and set up a new office in Nottingham, with the majority of our staff now based there. SCCL now employs around 245 staff.

The SCCL Board has now been formed and I am very pleased that we have a new chair and four non-executive directors with expertise in commercial, technology, clinical and finance.

In addition, we have set up a Clinical and Product Assurance (CaPA) team, which is now part of NHS Supply Chain, to ensure that the voices of Allied Health and Care Professionals (AHCPs) and patients are heard throughout the procurement process and beyond. Led by Jo Gander, CaPA aims to connect expertise across the health and care system to ensure products procured via NHS Supply Chain meet the required standards and represent the needs of the end users.

I am very proud of the progress made so far, but there’s no room for complacency – our work has just begun. Key strategic initiatives for 2019-20 include:

  1. Deliver savings for the NHS

There will be a change to how the NHS Supply Chain model is funded as we move to a centrally-funded model with a more transparent pricing policy, ʻBuy Price=Sell Price,ʼ in April 2019. We are continuing to work through the details of the new model, that will deliver savings of £150m by 2019-20.

  1. Reducing product and price variation

NHS Improvement’s Nationally Contracted Products (NCP) initiative, operated by NHS Supply Chain, will expand over the coming year. The principles of the initiative – reducing product and price variation across the NHS, reducing NHS spend by collaboration, and consolidation of NHS purchasing power – will continue to be central to the development of Category Tower service providers’ procurement strategies.

  1. Meet the diverse needs of the NHS

Customers’ experience of the NHS Supply Chain service is of vital importance. We are investing in our account management teams to provide an increased level of support across all sectors of the NHS. These teams now work closer with trusts to understand their future needs and provide dedicated support for agreed account plans with targeted propositions.

  1. Providing clinical assurance

We are driving better efficiency in procurement across trusts and suppliers. Our CaPA team will help ensure greater clinical involvement and assurance in purchasing decisions. By working with programmes such as the National Wound Care strategy, we will ensure that we keep the voice of the clinician at the heart of everything we do.

The new operating model will focus on value rather than unit price. Our concern is on whole-system cost, not just quick fixes that can potentially cost the NHS more in the long term.

We can only achieve this with the support from our customers, suppliers and partners. Collaboration is crucial to the success of the new NHS Supply Chain.

 

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