Value-based procurement: turning idea into reality

Chris Whitehouse, a political consultant and expert on medical technology policy and regulation at Whitehouse Communications, chair of the Urology Trade Association, and a governor of the Anscombe Bioethics Centre, updates readers on value-based procurement.

Warm words are being repeated by government ministers on value-based procurement, but reality doesn’t match their rhetoric.

Many who deal with the NHS and social care will be familiar with the term ‘value-based procurement’, defined by government as“a procurement approach that delivers a reduction in the whole life costs of healthcare where value can be created from financial, efficiency, patient, and environmental benefits.” NHS Supply Chain launched a project of the same name back in 2019, although this quickly stalled due to the pandemic. 

I first wrote about value-based procurement back in May when former health minister Lord Hunt of Kings Heath tabled a parliamentary question on the very topic, in which he asked the government whether it is their policy that such an approach applies to medical devices and similar product procurements by the NHS and what steps they are taking to promote the widespread adoption of this approach.

That question generated one of the most detailed and important responses from government I had seen in a long time. Noting the government’s commitment to the concept, which was also implicitly referenced in the landmark medical technology strategy, several members of Parliament from across the political divide have since pressed government on their plans to implement it at scale across the health service.

And it is this questioning which has uncovered several new developments concerning value-based procurement. First, we now know that NHS Supply Chain are currently in the process of working on two separate value-based procurement projects for continence products. Second, we know that the government’s MedTech Directorate is working closely with NHS Supply Chain and NHS England to develop a consistent methodology for the adoption of value-based procurement at a local and national level. Both warmly welcomed.

Four months on it would be fair to say that Lord Hunt’s question sparked genuine political interest in the concept, and it is easy to understand why. If successfully implemented, value-based procurement has the potential to not only improve patient quality of life and outcomes, but also to impact positively upon the wider health and care system. 

Despite these glimmers of hope, frustration across the sector continues. It is a concept very difficult to disagree with, and yet progress has been disappointingly slow. So, why is it not happening at pace?

First, given the immediate challenges facing the health service, NHS purchasing managers are still being directed by colleagues in the NHS to focus on the unit costs of products, as opposed to their overall value. This approach is leading to an under-appreciation of whole system costs at a local level, which is only reinforced by the absence of central guidance from NHS England on value-based procurement.

Second, tenders for the provision of products continue to be heavily weighted in favour of price, often with no assessment of patient experience or outcomes. For example, a recent invitation to tender for the Urology, Bowel and Faecal Management framework gave a much more significant weighting to price (65%) rather than quality (35%). Additionally, the questions in the tender that appear to relate to quality did not in fact refer to the quality of the product or provide for the identification of aspects of the product that will improve patient experiences, relating instead to only criteria such as ‘operational and supply chain resilience’ and ‘effective stewardship of the environment’. 

It is difficult to see how impact upon patient quality of life and outcomes, and overall system costs are taken properly into account in this example, which focuses so much on price. This is despite repeated assurances from the government that the application and adoption of value-based procurement in the NHS is a key priority.

The third barrier is the limited take-up by clinicians of new technology and new approaches. The MHRA estimates that there are almost 2 million different products registered for use in the UK, with many claiming in some way to be innovative. The sheer volume of these products leads to what is termed the “adoption challenge”, where products may reach the market but struggle to be procured, even if they are shown to be more clinically appropriate for patients. 

To address this challenge, there must not only be a common definition of innovation, but also a greater understanding and awareness at all levels of the benefits of value-based procurement to patients, healthcare professionals and system costs. This will encourage clinicians to suggest products that will promote better outcomes across the board, whilst in many cases simultaneously delivering significant overall cost savings.

To achieve the latter, NHS England should issue guidance to Integrated Care Systems (ICSs) on value-based procurement and should also establish a mechanism that will enable ICSs to be held accountable for the implementation of value-based procurement. Industry stands ready to support the NHS with this, but ultimately it is up to the government to provide direction.

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This post originally appeared on TechToday.