Rationalisation and standardisation key for NHS procurement

Conference hears how a single e-auction helped to drive down the cost of medical devices by 47%

Medtech manufacturers and NHS procurement chiefs need to work together to meet the changing demands of the healthcare sector moving forward, a conference heard.

Speaking at the 2016 Hospital Innovations Exhibition and Conference at Olympia last week, Gary Welch, director of procurement and supply chain at Oxford University Hospitals NHS Foundation Trust, said: “With medtech there is an increasing focus on standardisation and rationalisation.

We think that if a product is good enough for one hospital, then it is good enough for all hospitals. We are trying to drive this in procurement moving on

“There have been a number of stories of the many different types of products being used across various trusts and the different prices paid, but the days of these freedoms are rapidly behind us and going forward it will be about rationalisation.”

Welch is also chairman of the Shelford Procurement Group, which comprises 10 leading NHS multi-speciality academic healthcare trusts dedicated to excellence in clinical research, education and patient care.

He told delegates: “We think that if a product is good enough for one hospital, then it is good enough for all hospitals. We are trying to drive this in procurement moving on.”

The Shelford Procurement Group recently carried out some research into two of the most-commonly-purchased needle products and held a 40-minute e-auction to see if it could drive down the cost.

In under an hour, the group shaved £600,000 off the total bill for procuring these devices over all 10 hospitals.

“This shows that acting together and talking volume can make huge savings,” said Welch.

“Before the auction the trusts bought 80% of these products from a single supplier. At the auction they were not the cheapest and we did not end up going with this supplier. But they did look at their pricing and, although they didn’t win the tender, their response was to reduce the price into the system for everyone by between 40-45%. Overall, through this e-auction we saved 47% on the cost of these two products.

We can’t collaborate if we just sit on the side of the swimming pool dangling our feet in the water. We have got to jump in

“This shows there is opportunity out there if we work together to harness and capture it.”

But he warned that, to do this over every category of procurement, would take investment and buy-in from board level down.

“To chief executives and procurement directors, I would ask that we be more creative,” he said.

“We can’t collaborate if we just sit on the side of the swimming pool dangling our feet in the water. We have got to jump in.

“We have got to leverage commercial value and we must improve our data and systems. This requires a change in behaviour. We need good leadership and we need resources in the budget. Doing work like the e-action does not come cheap and we can’t afford to get it wrong.”

Companies