OPINION


Value-based procurement: an opportunity for reform


Beth Loudon, Director of Market Access, British In Vitro Diagnostic Association


The NHS is embarking on a significant shift in how medical technologies are evaluated and purchased. Through the rollout of Value-Based Procurement (VBP), the Department of Health and Social Care is encouraging the NHS to move beyond acquisition cost and consider broader measures of value, including patient outcomes, pathway efficiency, sustainability, resilience and whole-life cost. The ambition is clear: procure technologies that deliver the greatest value, not simply the lowest price. For in vitro diagnostics (IVD) and pathology, this is a welcome development. BIVDA has long supported approaches that recognise the wider contribution diagnostics make to patient care and health system performance. However, for VBP to succeed in pathology, we need to address a more fundamental issue.


The pathology challenge Pathology has historically occupied a somewhat unique position within the NHS.


Despite informing the


majority of clinical decisions and underpinning almost every patient pathway, pathology services have largely been commissioned through block contract arrangements. These funding models have focused on ensuring service provision and controlling costs, but they have done litle to measure or reward the wider value pathology creates across the health system. As a result, commissioners


have generally had a clear understanding of what pathology costs, but much less visibility of what pathology delivers. The contribution of diagnostics to earlier diagnosis, reduced admissions, faster treatment, improved patient outcomes, elective recovery and system productivity has often remained invisible within commissioning frameworks. This has had important consequences for procurement behaviour. There is often an assumption that procurement teams simply need beter


tools or training to adopt VBP. While capability is important, the real issue is incentives. Providers operate within the financial


framework established by commissioners. If they are commissioned to deliver services within a fixed financial envelope, they will naturally focus on cost control. In that environment, a diagnostic


technology that costs more upfront but delivers benefits elsewhere in the system can be difficult to justify. While the laboratory pays for the test;


the benefit may be realised through: reduced hospital admissions, earlier diagnosis, faster access to treatment, reduced length of stay, fewer outpatient appointments, or improved workforce productivity.


The budget holder making the


investment is rarely the budget holder seeing the financial benefit.


Why ICBs are central to VBP success Integrated Care Boards (ICBs) are uniquely positioned to address this challenge. Unlike individual providers, ICBs have oversight across entire pathways and populations. They can consider how diagnostics contribute to wider system objectives rather than focusing solely on individual departmental budgets. This allows them to ask fundamentally


different questions: Does earlier diagnosis reduce downstream healthcare costs? Can improved testing reduce pressure on emergency departments? How can pathology support elective recovery? What contribution can diagnostics make to prevention? How can testing reduce health inequalities? Where can pathology improve productivity across the wider system?


These are commissioning decisions, not procurement decisions. If ICBs begin commissioning services


around these outcomes, they create the financial incentives for providers to seek technologies that deliver them.


Value-based commissioning The current VBP framework places significant emphasis on value domains


Beth Loudon Beth Loudon is Director of Market Access at the British In Vitro Diagnostic Association (BIVDA)


–


the national industry association for manufacturers and distributers of in vitro diagnostics. Previously she was the Medical and Surgical Consumables Director for NHS Supply Chain, leading the clinical and commercial team responsible for assurance of value and resilience for the supply of clinical goods to the NHS and was also Category Director for Pathology and Therapies for NHS Supply Chain during the COVID19 response. Beth has broad and deep experience across the NHS procurement and commercial landscape, gained over 25 years.


www.bivda.org.uk


such as efficiency, patient outcomes and whole-life benefits. This is entirely aligned with the role that diagnostics play within modern healthcare. However, there remains a risk that


procurement reform is expected to solve a commissioning problem. If providers continue to be measured primarily on activity and cost, procurement teams will remain incentivised to buy on cost. If providers are commissioned and


rewarded for delivering outcomes, pathway improvements and system productivity, procurement teams will seek solutions that maximise those outcomes.


An opportunity to reposition pathology For pathology, this presents an important opportunity. For many years, pathology has been viewed primarily as a support service and cost centre. Yet the NHS increasingly depends on diagnostics to deliver earlier diagnosis, personalised medicine, prevention, operational productivity and sustainable healthcare delivery. The introduction of VBP offers


a mechanism for recognising this contribution, but only if commissioners actively measure and reward the value generated by pathology. The real transformation will not


occur when procurement teams start asking beter questions. It will occur when commissioners start valuing pathology for the outcomes it enables across the healthcare system. If ICBs commission pathology


services for value, providers will procure diagnostics for value. Until then, the aspiration of Value-Based Procurement will remain more difficult to achieve than it needs to be.


PPi October 2026 WWW.PATHOLOGYINPRACTICE.COM 5


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56