Procurement of PPE, diagnostics and medical devices to be in-housed by national agency

NHS Supply Chain’s current operating model, which has existed since 2018, has outsourced day-to-day management of the procurement of most of the goods and services bought by trusts as part of the “category towers” structure.

Under this structure, 11 category towers each cover a different spend area with a service provider to manage the available products and services.

But, in an exclusive interview, NHSSC chief Andrew New said the 11 categories would be reduced to eight. Three of the new categories — personal protective equipment, “medical capital” (which combines large capital diagnostics equipment with smaller scale diagnostics, pathology and point of care testing categories) and “medical clinically complex” surgical products and services — would be managed in-house. 

The new model will come into effect in 2023-24 following a procurement process to find new suppliers for the revamped category structure, which starts on 11 April 2022 with the publication of the contract notice.

The government set up a “PPE buying cell” to manage the procurement and distribution of the kit during the pandemic. This has been folded back into NHS Supply Chain and continuing to manage this category internally will ensure the lessons learned from the pandemic are kept at the centre and “translated back into the organisation, rather than spreading it across a broader supply base”.

Keeping the management of PPE procurement in-house is important “from a resilience perspective,” Mr New said.

The NHSSC chief told HSJ the decision to bring the diagnostics and capital equipment in-house was influenced by NHS England’s push to develop community diagnostic centres, which will house a plethora of diagnostic modalities, and the push for a significant future investment in capital equipment.

There was a need to have closer control of this category so as to be quicker to respond to the needs of the product users and guide them in deciding what equipment they need, Mr New explained.

It will mean for “anyone who wants to buy capital equipment, there can be one central team with great understanding of product, great understanding of capability, that can help to drive to the right outcome for the consumers”.

The decision to bring the complex medical devices in-house was also influenced by a desire to be closer to NHS policy-makers and clinical leaders.

Mr New said there had been some “amazing success” in this area already through the Getting It Right First Time programme’s work addressing undesirable variation in clinical services.

“Having a really close engagement with the national clinical leadership, as well as the trusts and the local clinical leadership, is an opportunity to start being the commercial arm of that clinical team, leading the procurement process,” he explained.

NHSSC’s old model has been criticised for being expensive for trusts, which pay for it out of a cut from their budgets, while not always appearing to provide tangible benefits. 

Mr New defended the agency’s record, saying it is exceeding its performance objectives. But he also struck a conciliatory tone, saying the new operating model both reflects choices about how best to organise his agency but is also about “a cultural, behavioural part of the system that we’ve got to achieve at the same time”.

“We are part of the NHS family and we’ve got to behave like we’re inside the family, not behave like we’re outside of it trying to sell into it. Which means we’ve got to be more open and transparent; we’ve got to share our information and our capabilities across [the NHS] more broadly,” he said.

The changes will be cost-neutral, he added. Making changes to the operating model will free up existing resources to invest in people and technology, he explained.

He also said the agency is moving beyond “a cost definition of value” and moving towards a broader definition, focusing on the question of “how do we work with our colleagues across the system to make amazing product choices and service delivery choices to create capacity across the NHS?”

Categories covering the non-medical areas — food, facilities, office solutions — and medical consumables — surgical consumables and infection control products, and rehabilitation and community products (ranging from continence products to wheelchairs) — will continue to be provided externally.

NHSSC still needs “expert support” in these areas, Mr New said. “There’s a real interest when we’ve talked to suppliers about how they can use their different skills from different sectors, about retailing, about e-commerce about those things that actually are a slightly different set of procurement skills.”