NHS Supply Chain: Value Based Procurement project report and findings

With increasing demand for healthcare set against a backdrop of limited financial resources, there remains ongoing need for procurement to deliver increased year-on-year savings across the NHS.

To address this challenge, in May 2019, NHS Supply Chain commenced a project designed to consider the potential benefits and practical application of VBP.

VBP involves a shift in emphasis from a reduction in product costs to working with industry to consider technologies that can influence a reduction in total costs within the patient pathway.

VBP will provide an additional methodology that can be adopted by category tower service providers as a means of driving sustainable increased savings and improving patient outcomes.

The new report shares the outcomes and observations from the pilot study phase of the project. Additionally, it outlines a proposed approach for progressing the introduction of VBP across NHS Supply Chain, NHS buyers and suppliers. It concludes with the potential implications for VBP post Covid-19 and how progress towards the adoption of VBP can be maintained.

Key findings

• The project focused on establishing a range of small-scale pilots, during which benefits could be recognised within six months of the start of the project.

• NHS Supply Chain engaged with 20 strategic NHS Supply Chain suppliers and a blend of subject matter experts. In total 27 proposals were received and 13 taken forward as viable pilots. The pilots demonstrated the practices and principles of VBP.

• Clinical feedback from the pilots suggested that the forecast expectations of improved patient care and operational efficiency were delivered. However, due to Covid-19, it has not been possible yet to validate how these benefits have been accounted/reported against trust cost or efficiency improvement plans.

• From a sustained programme of stakeholder engagement throughout the project, it became apparent that there is an emerging interest in the benefits of the potential application of VBP in the NHS from clinical, finance and procurement communities.

• Assurance of delivery is a key area highlighted by finance directors that needs to be addressed to gain greater traction for the approach. As a result, a VBP assurance framework has been developed, which can be used as a guide to engage and support both buyers and suppliers to help resolve this challenge.

• VBP has the potential to offer healthcare executives ‘choice’ over and above traditional procurement product price reduction strategies.

Visit the NHS Supply Chain: Value Based Procurement webpage for further information on how the project began, an interview with Brian Mangan (VBP project lead), and to read the Value Based Procurement project report and findings.