Procurement
l A focus on annual budgets: Compounding this is the focus on annualised in-year budgets and targets.18,20
Many organisations
require savings to be fully recognised within a single financial year. However, the complexity of some transformative VBP initiatives frequently means it takes over a year for the benefits to be fully realised.9
towards budgets that capture pathway or system-wide savings, preventing business cases from collapsing simply because costs and benefits fall to different budget holders.
This
misalignment between VBP timelines and financial cycles leaves promising initiatives stuck at the pilot stage.
3. Cultural inertia This points to perhaps the greatest barrier, cultural inertia and preference for simplicity over complexity. In an environment of unprecedented workforce pressures and system strain, the path of least resistance is understandably appealing. Procurement teams have decades of training and systems optimised for transactional contracting. In defaulting to simpler, price-based contracts, the NHS risks missing the very innovations that could help it overcome its challenges. Until procurement teams are incentivised to deliver long-term value rather than short- term cost savings, and until VBP is seen not as additional complexity but as a route to sustainable improvement, this cultural barrier will persist.
Steps forward: building momentum through collaboration Overcoming these barriers requires a fundamental shift in mindset from viewing VBP as too complex to recognising it as an opportunity to pool resources, share expertise, and jointly solve defined challenges.
Collaborative design: defining value and establishing baseline The foundation of successful VBP is multi- disciplinary collaboration to define what success means in measurable, local terms. Start with a shared vision and multi-
disciplinary team (MDT): VBP, can, and often should, start simply. The critical first step is bringing together the right people, the MDT, to define a shared vision of success and clearly defined outcomes. This team must engage clinical, finance, operational, and procurement perspectives, alongside patients and industry partners. The vision must reflect local priorities and be measurable in local terms. Without this shared understanding, VBP initiatives lack direction and purpose. l Overcoming silos: Engaging an MDT at the start directly dilutes the budget silo problem. This allows organisations to work
l Establish the baseline: A critical early action is understanding the baseline: where are we now, and how will we demonstrate improvement? Industry partners can play a valuable role here, working collaboratively with Trusts to measure current performance and establish the foundation against which the value of procured solutions can be compared.
Strategic and financial alignment For VBP to succeed beyond the pilot stage, financial structures and procurement processes must evolve to support it. l Reform performance metrics: Procurement
teams measured solely on cost savings have little incentive to pursue value-based approaches that may cost more upfront but deliver greater long-term benefit. Performance metrics must evolve to reward decisions that deliver sustainable outcomes, not just short-term cost reduction.9
l Reform contract mechanisms: Traditional fixed-price agreements are poorly suited to outcome-based procurement. Gain-share or risk-share models, where suppliers and the NHS share both the benefits and risks of achieving defined outcomes, offer a more appropriate framework for VBP.7
These
arrangements require trust, transparency, and robust measurement, but align incentives in a way that traditional contracts cannot.
l Evolve specifications and criteria: Procurement specifications and evaluation
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