The must-read stories and debate in health policy and leadership.

Skinny margins

To cover its operating costs, NHS Supply Chain would add an extra cost – or margin – to the products it purchased from suppliers when they were sold onwards to NHS trusts.

Trusts therefore did not know what NHS Supply Chain had really shelled out for the products, making it impossible to assess whether savings could be made by switching to another supplier.

This ambiguity around the margin NHS Supply Chain applied became one of the most criticised elements of the procurement model.

However, after 12 years of operation, NHS Supply Chain’s model is changing – and national chiefs pledged to devise a new system where NHS Supply Chain would sell wares for the same price it bought them. 

This appeared to be a red line. But HSJ has now revealed senior chiefs considered applying a “skinny margin” to bolster NHS Supply Chain’s income, although the option was dropped.

According to a document leaked to HSJ, the two main reasons for ditching the margin were the extra income not being deemed vital and concerns over the “adverse reaction” from trusts.

Introducing the margin would have been completely inconsistent with previous messages about the new model, and would likely have fuelled much scepticism and anger among trust procurement staff.

With that in mind, it is surprising NHS Supply Chain, which is run by Department of Health and Social Care subsidiary company Supply Chain Co-ordination Limited, felt the need to consider the option at all.

It would seem that, amid negotiations about how much trusts should pay to fund SCCL’s operating costs, the company felt it necessary to explore all options – however unpalatable – to ensure it delivers financial balance.

Out of time

Low risk operations, such as hip, knee and certain gynaecological procedures, are increasingly being done in the private sector due to high demand in the NHS – the proportions are eye opening.

But is this a help or a hindrance for surgical trainees?

The Royal College of Surgeons has warned training hours – along with trainees’ morale – are being “negatively impacted” by this shift.

So not only does the NHS see tariff flow away from NHS trusts (who need the money), but the surgeons of the future are not getting the experience they need.

This has long been one of the murky interfaces between the private sector and the NHS. The public pays (a lot) for the training of doctors, the independent sector gets the benefit of this for free. (The tax on private health insurance doesn’t cover the cost of Health Education England – and private hospital groups don’t pay that anyway.)

The royal college has called on HEE to review how surgeons access training in the private sector, highlighting that, when opportunities are provided, they vary in quality.

RCS has made clear a scheme such as this needs to be properly funded, and has suggested a tariff based system where funding follows the patient. But will these additional training opportunities result in the private sector putting its prices up for NHS work?