Case Study: Developing a Comprehensive Procurement Strategy to Ensure Financial Stability for the NHS

Transcription

1 Case Study: Developing a Comprehensive Procurement Strategy to Ensure Financial Stability for the NHS Warren Simms Associate Director Clinical Procurement and Market Management

2 Context. NHS Procurement is under pressure to deliver, but in the wider context of NHS efficiency The Challenges Facing the NHS and Procurement Performance standards and financial balance - implementing the Five Year Forward View whilst maintaining performance standards and financial balance. Cost reduction - The NHS is expected to deliver efficiencies of 2-3% per year, effectively setting a 10-15% real terms cost reduction target for achievement by April Operational productivity and performance - Lord Carter s review of Operational productivity and performance - unwarranted variation worth 5bn in terms of efficiency opportunity. Procurement opportunity - A 750m opportunity was identified specifically to procurement but there is a significant role for improved procurement support in the other identified resource areas of clinical staff (agency staffing), pharmacy and medicines, diagnostics and imaging, backoffice functions, and estates and facilities.

3 Commissioning Support Clinical Procurement Full Service Collaborative Contracting, and Transactional Procurement and Supply Chain Service Transactional Procurement Service Healthcare Procurement and Market Management Collaborative Contracting and Transactional Procurement Service Collaborative Contracting Service Benefits Co-ordinated procurement in patient pathways across healthcare, social care and providers Back office rationalisation Financial savings Capacity/Staffing Goods and Services Increased capability/skills across all organisations Business Intelligence clinical and spend analysis Collaborative links to wider skills and services New service mobilisation skills Project management skills

4 Who We Serve. Commissioning Support Units (CSU s) Clinical Commissioning Groups (CCGs) Shared Vision: Delivering a healthier future, Leading local partnerships and Transforming healthcare in England

5 Case Study Example NHS England Clinical Procurement Support

6 NATIONAL REGIONAL Working Architecture High, medium and low complexity PROJECTS Local Pipeline Regional and Local Reports Dental Primary Care Region 1: Arden GEM CSU Region 2: North & East London CSU Region 3: Central South & West CSU Region 4: North of England CSU National Reports Armed Forces Health & Justice Key project information flows to all 4 Regional CSU Delivery Allocation Advice & Support Delivery Allocation Advice & Support Delivery Allocation Advice & Support Delivery Allocation Advice & Support Performance reporting Knowledge repository Public Health Advice & Support Specialised Acute Services Mental Health Key national project information flows Regional work plan flow National Reports National Procurement Pipeline Specialised Commissioning Highly Specialised Procurement Pipeline Performance Reporting Governance Standard Systems and Processes

7 Case Study: Delivering efficient, collaborative procurement services to NHS England The challenge NHS England required procurement support across its portfolio of directly commissioned services To reduce inequalities and improve the overall delivery of health care to patients To add value to every pound spent on clinical services and reduce the cost of delivering clinical procurements Develop standardisation Finalist Our approach Arden & GEM delivered the project under a Lead Provider model and a partnership approach made up of three other Commissioning Support Units We established a single front door operating model for all services procured via the contract A strong governance structure, clear operating model and detailed SLAs The outcomes 870,000 saving in procurement costs Full year cash releasing savings of circa 13.5 million for reinvestment in patient care 5-6% efficiency factor from capacity utilisation

8 Enhanced Procurement and Supply Chain Services Skills, capabilities and capacity Realising the full productivity and efficiency opportunities will be challenging, requiring access to a combination of procurement skills, capabilities and capacity not found in local organisations. Shared service approach Carter identified the productivity and efficiency benefits of a shared service approach. CSU s are well placed to provide a coordinated procurement service improving quality of service through: collaboration, cooperation and economies of scale local focus whilst aligned to the implementation of national best practice CSU s End to end procurement capability Capability across complex contracting programmes and transactional procurement services supported by highly effective - Business Intelligence Project Management Rapid Mobilisation solutions A nationwide team of highly experienced and highly trained procurement professionals Transactional procurement service experience and technology

9 Approach..

10 Methodology: Governance Strategic Sourcing Seven Steps Project outputs Gateways Scoping Project Mobilisation Opportunity Assessment Staff & Resource Estimate Develop lines of enquiry Interim report to confirm affordability & priority of recommendations & initiate consultation Assign named staff & budget Stakeholder Map Service Boundary definition Mapped links to wider health economy Agree PID Comms & Engagement Plan Project Plan & milestones Gateway 1 approval to commit resources Baseline Assessment Gather evidence of access, quality, efficiency Deep dives, pathway maps Health needs assessment Review service models and specifications Develop & test/model hypotheses Future State & Gap Analysis Demand & Capacity model Evidence for provider landscape Interim report to confirm affordability & priority of recommendations & initiate consultation Model service line economics Test with patients, experts & stakeholders Gateway 2 approval to consult/engage Define Strategy Final report to authorise the implementation of market intervention strategy Purchasing Provider impact analysis EU Advertising Market Engagement Final report to Authorise award of contract Evaluation Criteria, PQQ Tender /Competitive dialogue Mobilise Implementation resources Implementation Contract finalisation Mobilisation & Transition plan Incorporate consultation response Compliance review (section 75), IRP tests Lotting Strategy Award (& Challenge resolution) Communications Business as usual Gateway 3 approval to procure Gateway 4 approval to award

11 Wider Stakeholder Map LOCAL AUTHORITIES Procurement Hubs 11

12 Case Study Examples

13 Case Study: NHS England Specialised Services Excluded Devices The challenge Information Asymmetries Purchase price variation at device and MPC level Supplier dominant market Our approach NHS wide Joint working groups to agree approach Review contract coverage and EU Compliance Industry engagement (ABHI) Initial two phased approach to market Operational establish reference prices and breakdown actual cost of devices Tactical undertake EU super tender to align prices Strategic approach Zero Cost Model Option Reduction in clinical variation process The outcomes Cash releasing savings in of 6.5 million Complete and accurate records and Potential to drive new innovation and efficiency for excluded devices

14 We created the Zero cost model..

15 Case Study: Delivering coordinated, patient-centered and localityfocused services The challenge Fragmented community services across Nottinghamshire Patients experiencing inconsistent levels of care Lack of coordination between providers Treatment often delivered far from home Our approach Active involvement in the definition of the service scope Market analysis and data validation Public and patient consultation and engagement Clear governance structure for quick decision making Clinical and wider stakeholder engagement Innovative use of technology The outcomes Improved patient outcomes and access to services Procurement efficiencies Significant economies of scale by combining ten procurements into one Savings of 12.04m over the full 7 year contract Further savings and improved quality expected through contract management/monitoring and QIPP

16 Case Study: Procuring a new Child Health Information System The challenge Issue with child health records being lost or misplaced when families move Immunisations and screenings missed NHS England wanted to procure a new solution for 12 CHIS in the West Midlands Our approach Clarity on outcomes required via steering group Review of current service provision Thorough options appraisal Expansive market engagement that helped to explore issues around optimal contract length, interoperability and realistic mobilisation timescales Competitive open tender process whereby two or more evaluators were used and disparities in marking were subjected to a rigorous moderation process The outcomes Cost savings of 4.4 million over the 5 year contract Complete and accurate records Better service assurance

17 Thank you for listening. Any questions?