What does the future hold for procurement?

In the September/October 09 issue of NHE, Professor Paul Goddard said: “The medically-knowledgeable individual... will find the less knowledgeable managers both a threat and a problem.” This goes not only for general managers but for other support professionals as well, says Renata Towlson

Procurement officers constantly battle with a lack of in-depth engagement and co-operation from consultants where the more complex medical or surgical equipment and systems are concerned.

Why is it an issue? It is a problem because anything above the OJEU value, approximately £90k, has to go through a competitive process open to other members of the European community. It is a legal requirement, whether clinicians like it or not.

Some of them do understand the compliance issues but still seldom attempt to evaluate what the market offers other than their current arrangements. This in turn agitates procurement officers who feel massive pressure to follow the prescribed rules and processes.

Often they will conduct an OJEU exercise with minimal or even no input from consultants only to discover that, if they do, in the end they will not award the contract other than to the supplier preferred by the consultant as there will be no appetite for using ‘unwanted’ suppliers. General managers, finance accountants and directors are all frustrated by this especially if there could be a potential saving by making an alternative choice.

The best practice guidance for the procurement process is to be involved at the design stage. This has been taken from the manufacturing industry. The idea is simple and effective. If buyers are present at the design and birth stage of the product they can ask potential suppliers all the right questions about the most economical way to realise the project. Designers and suppliers could be asked to reconsider expensive materials and the complexity of specifications in order to do reduce the costs. This often works very well.

This is not so in medical and surgical systems. Surgeons with highly specialised knowledge and a very different professional network to procurement managers talk about their ideas with other colleagues or those very well trained within the medical category companies’ salespeople.

If buyers had half of the enthusiasm and level of training as the sales profession, maybe we would be more successful in finding our way to clinicians. Unfortunately, this is not the case.

Nowadays, sales people often have degrees in psychology, human behaviour and other social sciences. In procurement, on the other hand, CIPS, the most widely recognised procurement qualifications, does not require a candidate to have a scientific degree and the discipline of intellectual training is therefore not present within the profession.

This is not to say that some procurement specialists and managers do not have outstanding category and contractual knowledge. Regrettably, however, I have to say that the biggest emphasis is on the concept of legal compliance.

Why does this matter? It matters because by concentrating on ticking all of the compliance boxes, which might work quite well in a less complex tendering environment with more defined variables, we are failing to address the creativity and ingenuity of the minds of individual consultants who design surgical tools, equipment, implants, and medical systems with research and development teams and manufacturers but escape the eyes of procurement officer who most of all want to ensure compliance, best practice, achieving best value for money and the legal obligations of a public corporation.

Clinicians hear about the possible challenges from the market, accusations of corruption and danger of bordering on fraudulent activities but they do not have the time and patience to follow requirements which they feel stifle them by not taking into consideration the reality of the complexities of individual decisions made within any given network of possibilities.

Ultimately, they work for medicine and patients, even when driven by recognition and higher status within their profession. But for procurement professionals who are only involved in the last stage of process, it seems unfair, not transparent enough and therefore the best value for taxpayers’ money cannot be established or justified.

What we have here is an individual concept as a result of impenetrable intellectual and intuitive processes entering the public domain, where the rules of behaviour in that domain are very different from the micro cosmos of our individual entities thus resulting in tension.

What can be done? Professor Goddard says: “The egalitarian managerial system is in direct opposition to the elitist professional system.” This is very true but in the very complex political, economical and social climate of the public sector, egalitarians and elitists have to work together in order to deliver the objective of best value for money for a free at point of delivery health service.

If this cannot be done, the model is false. If the model is false, whatever effort and resources we put into it will not pay the expected dividends. British governments have been sponsors of a sixty one year old experiment. I have not seen as yet a comprehensive report on the falsification of the NHS model. And I do believe the public deserves one even if it means a change of the political agenda or deeper understanding of egalitarian and elitist notions in a democratic society.

Meanwhile, however, procurement managers who recognise the legal difficulties of ensuring that consultants in the public sector domain are compliant, spend hundreds of thousands of pounds of taxpayers’ money on legal advice instead of applying their own judgment as to which procurement process is the most appropriate in the circumstances.

British law is case law. Procurement law is a new discipline and as long as one applies reason and transparent rationale behind any decision, there should not be the need to involve expensive lawyers.

However, procurement heads need to become more knowledgeable professionals in order to make this happen as, with all its ambitions and aspirations, public sector procurement does not attract highly educated individuals. There was no need for it in the past. There is certainly now.

What does the future hold for procurement?

As Professor Goddard says: “This may change as medical science develops and as methods of delivery of the information also evolve”

Once this happens, we will again be able to reduce the number of highly educated people within procurement management as the delivery of information will be such that well trained staff will be able to process information against designated formulae and criteria and then move forward in a recognised way.

The current fashion for bringing in consultants and other experts in order to provide intelligence is no longer sustainable . There is a need for in-house intelligence on a permanent basis. Not simply because of financial pressures, although these alone are bleeding the NHS, but because consultancy, by definition, comes and goes without in-depth studies of the organisation and its processes and builds reports around well designed, high definition tools which cannot be easily translated to the clinician-patient relationship.

Renata Towlson , is a senior procurement manager at Nottingham University Hospitals NHS Trust