PROCUREMENT XXXX
Procurement champion: NHS trusts should know what good prices look like
Lord Carter of Coles talks to NHE’s David Stevenson on his first few months as chair of the new NHS Procurement Development Delivery Board, and his ambitions for the future.
In
June, the Department of Health named Lord Carter of Coles as its ‘procurement
champion’, calling on his expertise to help save money on the buying side to reinvest in patient care.
Prior to appointing the Labour peer, the department set out how it intends to take through a new ‘Procurement Development Programme’ that is “aligned to world-class standards”.
In the report – ‘Better Procurement, Better Value and Better Care’ – the DH announced the creation of the NHS Procurement Development Oversight Board.
The DH said it wanted as its procurement champion a ‘private-sector figurehead’ and
in Lord Carter it has one. Having served as chairman of the NHS Co-operation and Competition Panel, the UK head of US-owned healthcare firm McKesson and currently a member of the government’s Efficiency and Reform Group, Lord Carter’s wide-ranging experience was one of the reasons behind his appointment.
At the time, health minister Dr Dan Poulter said: “He will bring a wealth of experience to the NHS Procurement and Efficiency programme, which will help hospitals to cut waste, save money and drive efficiencies which can then be spent on frontline patient care.”
Quantifying issues
Catching up with Lord Carter, the founder of nursing home company Westminster Health Care, NHE asked him how the first few months of his chairmanship have been and what challenges he has identified.
“The first few months have been very interesting: there is no shortage of people identifying issues, as you see in the press,” he said. “The challenge is how to quantify those so they cease to be assertions, but are actually based on fact, and then to try to get a hierarchy of issues – so that we can tackle them one by one.
“Instead of responding to the latest ‘X can buy this cheaper than Y’ example, it should be about building a robust system, which will be very important for the health service.”
Lord Carter, who as part of his role chairs a new NHS Procurement Development Delivery Board (PDDB) to support the Oversight Board, noted that this will take time and currently the team is working through a ‘diagnostic phase’ and is seeing what structures work to help
24 | national health executive Nov/Dec 14 deliver the anticipated savings and results.
The NHS PDDB will steer and deliver the efficiency programme. It also brings together relevant stakeholder groups, including the NHS Confederation, the Foundation Trust Network, the Cabinet Office, Monitor, the NHS Trust Development Authority and Public Health England, along with the DH and NHS England.
The NHS acute sector spends more than £22bn every year on goods and services, which typically accounts for about 30% of operating costs. Drugs and pharmaceuticals (£5.5bn), clinical supplies and services (£4.5bn) and premises (£3.3bn) make up the sector’s largest proportions of non-pay expenditure.
The DH thinks £1.5bn can be shaved off the £22bn spend by 2016.
However, when asked about what savings could be delivered, Lord Carter told us: “The idea is to drive improvement and efficiencies, and it is encouraging. However, I wouldn’t want to put a number on the savings until I’ve finished the first phase of work. It is very easy to pull down a number, leading to a case of ‘speak in haste, repent at leisure’. Instead I’d rather try to get it right.”
Degree of market choice
Lord Carter says that irrespective of the precise changes implemented, it is important that there is a degree of choice in the market. “The idea we’re going to brigade people into one thing is not there, but I certainly think – as you see with the Atlas of Variation – that people should have access to what good prices look like.”
The DH report also outlines initiatives that could help deliver NHS supply chain
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