16 March 2023 by Mat Oram
The UK health and care system is facing a sustained increase in pressure driven by rising healthcare needs. People are living for longer with a greater number of comorbidities, and our expectation of the health and care system remains high, despite the financial and delivery pressures resulting from the COVID-19 pandemic and, more recently, soaring levels of inflation. The procurement of medical technology, therefore, plays an increasingly important role in our ability to deliver the best care for patients, recently highlighted in the government’s medical technology strategy.
The strategy sets out the steps that need to be taken to ensure the health and social care system can reliably access safe, effective and innovative medical technologies that support the continued delivery of high-quality care, outstanding patient safety and excellent patient outcomes in a way that makes the best use of taxpayer money. It is centred around three objectives: (1) right product; (2) right price; and (3) right place.
At AdviseInc, we understand the complexities of NHS procurement, in medical technology and beyond, having helped NHS organisations save tens of millions of pounds through better use of procurement data and analytics. Applying our experience, we’ve taken some time to consider the med tech strategy and the three “rights” on which it is based.
Right product
Sourcing the right product is crucial for all procurement teams, not just those working in the NHS. But unlike other industries, where products that aren’t fit for purpose increase the likelihood of recalls and returns, in healthcare, the stakes are invariably higher. Above all else, the products we procure need to be safe to use and clinically effective. As a result, it is highly important that NHS procurement teams engage the end user and develop an understanding of their needs before swapping product A for product B.
To bridge the gap between budget holders and the NHS frontline, many of the organisations we work with employ clinical procurement specialists. A key>part of clinical procurement is embedding procurement into day-to-day clinical activity, and educating procurement teams and clinicians on the challenges and nuances of their respective roles. Procurement teams benefit from learning about the types of products being used on the frontline, and what clinicians look for and value in those products; clinical staff benefit from learning about external considerations, such as sustainability, which is rightly mentioned in the strategy.
With more than 60% of the NHS carbon footprint based within the NHS supply chain, procurement plays an essential role in helping the NHS to realise its ambition to become the world’s first net zero national health service by 2045. In the immediate term, a lot of attention will be paid to reducing the volume of long-lasting, single-use plastics, but to get even close to meeting its net zero target, procurement teams need to innovate, using data and analytics to challenge established processes, reduce carbon emissions and explore more renewable energy supplies.
Right price
At a very basic level, the primary goal for those working in NHS procurement is to identify efficiency opportunities. However, finding efficiency opportunities is becoming increasingly difficult, with many of our customers starting to feel the impact of global economic factors, such as inflation and the financial pressures born out of the COVID-19 pandemic. This was highlighted in our recent analysis of NHS procurement spending during 2022, which revealed significant price increases across many category areas, resulting in nearly £31m (11.0%) of additional cost. Using technology to identify price changes will be crucial for NHS procurement teams moving forwards, as it will help them to forecast, plan and budget more effectively.
Technology will also be crucial for helping NHS organisations manage the transition to integrated care. With a greater number of sites to manage across a larger region, procurement teams are finding it increasingly difficult to track procurement spend data and analytics, impacting upon their ability to find the right price. In response, we developed the NEW AdviseInc platform, bringing our suite of award-winning spend and analytics applications together under one roof, including our latest solution, Control Tower, which simplifies the vast amounts of information being collected and managed in each care setting within an integrated care system.
With a lack of resources and skills across the country, we expect to see more NHS organisations looking for innovative ways to identify cost-saving opportunities. But to ensure the best value for public money, there must be a shift in emphasis from a reduction in product costs to considering technologies that can influence a reduction in total costs within the patient pathway, also known as value-based procurement. As is the case with all good procurement analytics, clear and reliable data is essential for the success of value based procurement, with attention paid to affordability, long-term value and patient outcomes.
Right place
One of the biggest challenges facing NHS procurement is supply chain disruption, and so it was encouraging to see the importance of access, diversity and resilience of the supply chain referenced in the med tech strategy. But the reality of being able to confidently provide products at the time they are needed is easier said than done, with supply chains typically spanning across multiple countries, relying on extensive use of outsourcing for materials, components, assembly and supporting services. In 2021, for example, the UK imported around £7.5 billion of medtech products, excluding materials and subcomponents.
From disruptions to manufacturing and transport restrictions, to a lack of raw materials, a lot of the recent problems with the NHS supply chain are a direct result of the COVID-19 pandemic, Brexit and Russia’s invasion of Ukraine. To overcome these significant hurdles, NHS Supply Chain has put a number of measures in place, including stockpiling and the implementation of recommendations made in the Boardman report.
Lastly, more needs to be done to reduce CO2 emissions produced from delivering supplies, further supporting the NHS in its efforts to become net zero by 2045. We are already seeing ICSs create warehouses to reduce emissions from deliveries to inner-city areas and minimise supply chain risk (which is inherent across the NHS). It is crucial that this work continues.
If you enjoyed reading our thoughts on medical technology strategy and want to learn more about AdviseInc, visit: https://www.adviseinc.co.uk/
