Procurement
that the NHS is in a “critical condition,” citing deteriorating productivity.17 Addressing these pressures requires utilising
every lever of efficiency and productivity, including procurement, which shapes clinical pathways and resource use. However, traditional price-driven procurement is reaching its limits18
. While standardisation and aggregation
have historically delivered significant savings, price-driven procurement often overlooks whole-life costs and clinical outcomes.18
Short-
term savings can lead to higher downstream costs, and actively create barriers to adopting innovative technologies.19,20 This is where VBP comes in. The NHS spends approximately £8 billion annually on medical equipment and consumables.15 Adopting VBP ensures this investment delivers measurable benefits. For example, a device may have a higher upfront cost, but its value is demonstrated through reduction in bed days, lower readmission rates, or improved patient experience. Early VBP pilots have already shown this approach can release capacity, reduce waste, and improve operational productivity.21 By shifting procurement from a transactional
cost-reduction function to a strategic enabler of better care, VBP supports fiscal resilience, optimises clinical outcomes, and accelerates innovation adoption, critical steps toward a high- quality, sustainable NHS.19 This strategic alignment is fully consistent with national policy, including the NHS Long Term Plan and the DHSC’s VBP methodology.4,22 The question is no longer whether to adopt innovative procurement practices such as VBP, but how quickly the NHS can embed them at scale.
Key barriers to VBP adoption Despite growing interest and policy momentum behind VBP, adoption across the NHS remains limited.6
The challenge is not in the concept itself, but in transitioning a complex healthcare
system away from decades of traditional purchasing. Understanding the following systematic barriers is essential to overcoming them:
1. Defining and measuring value One of the most foundational challenges lies in the absence of a shared, agreed-upon definition of “value” and the necessary systems to measure it.7,9,18 l Absence of a shared definition: Projects frequently stall because “value” is a subjective concept. For some, it is purely cost savings, for others, it must encompass clinical outcomes, patient experience, operational efficiency or sustainability. When key questions remain unanswered: “What specific problem are we solving? What constitutes success? Why does this matter to our patients, staff and the system?” – measuring value becomes impossible. If success is not defined, there is no framework to evidence return on investment, measure objectives, or justify continued investment. This lack of clarity prevents industry partners from tailoring solutions effectively, causing VBP initiatives to stall before they can begin.
l The challenge of intangible benefits: A major challenge is converting qualitative benefits into measurable indicators that can justify higher upfront costs.7,18
Factors such
as enhanced staff safety and experience or reduced environmental impact often go unmeasured, meaning they are excluded from procurement decisions.
l Lack of data infrastructure and baseline: The historical focus on cost means that existing systems and processes have been designed to track primarily financial metrics. Policy
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now demands broader metrics (productivity, efficiency, outcomes, and sustainability), yet the infrastructure to capture these is often not in place.5,18
Compounding this
is the difficulty of establishing a clear baseline of current performance. Without it, demonstrating improvement is impossible. Even once baselines are established, objectively capturing and tracking outcome measurements requires collaborative pathway mapping between the NHS and its suppliers. Yet such collaboration often remains the exception rather than the rule. Ultimately, without comparable data to accurately assess long-term value, a price- only comparison remains the simplest, and therefore preferred option.
2. Structural and financial misalignment Even when value is clearly articulated, and data is available, structural and financial barriers often block adoption. l Budget silos and upfront costs: Budget silos make it difficult to consider total lifecycle costs and system-wide benefits.7,9,18
A solution
that releases nursing capacity may benefit multiple departments, but if the higher upfront cost falls to one budget holder, while the savings accrue elsewhere, the business case often collapses.
l Contracting mechanisms: Traditional contracting mechanisms are designed for transactional, price-based purchasing, not for long-term, risk-sharing VBP models. Creating new contracting vehicles to accommodate shared savings, risk-sharing, and outcome- based payments requires significant legal, procurement, and financial overhaul, often slowing VBP initiatives to a halt.
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