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Knowledge Hub

Value for money: what does it mean in the new NHS procurement landscape?

Oli Hudson, of the Wilmington Healthcare Consulting Team, assesses the immediate and longer-term priorities of the NHS procurement category towers:

The 11 new procurement category towers, which are now live, are part of an overhaul that aims to help the NHS save more than £2bn by 2022 on the purchase of common goods and equipment.

Tackling unwarranted variation in purchasing costs is key, but how will the towers meet this challenge? Will we simply see medtech device prices slashed, or will tower leaders be required to take a more holistic approach to delivering value across the whole care pathway?

Price priorities

One key tool that is currently being used to reduce unwarranted variation across suppliers, categories and products is Purchase Price Index and Benchmarking (PPIB). Introduced in 2017, PPIB collates and analyses purchase orders across all NHS hospitals to provide transparency on pricing.

Some medtech company leaders fear PPIB will mean NHS procurement is all about cutting unit costs and that manufacturers of high-end products will be pushed out of the market. However, while consistency of pricing is the top priority for the towers, it must be remembered that they will be incentivised to reduce total spending within the whole NHS system.

A key barrier to achieving this goal is that it will take time for the towers to develop the working relationships required to understand whole system benefits. At the moment, the towers are trying to engage clinicians in the review process. However, sometimes this involves engaging with just three or four clinicians, in order to obtain advice on product quality and benefits in relation to a specific therapy area.

So, for example, a specialist consultant may be asked to explain the clinical value of different transcatheter aortic valve implantation (TAVI) devices; or define what type of hip prothesis a 40-year-old patient requires compared to an 80-year-old. But they are unlikely to have the detailed wider NHS system costs information needed to move towards value-based procurement. This information could include data on how TAVI or different types of hip protheses could reduce the financial burden of aftercare, including outpatient visits or the cost of treatment failure further down the line.

Integrated care perspective

Whole pathway costs put a totally different perspective on patient management and they will become increasingly important as the NHS continues to move towards integrated health and social care systems that see one provider or a group of providers responsible for all the costs of a defined population. This integrated approach means that costs that were once hidden away among a variety of different providers for everything from lighting and food in hospitals to medical devices and drugs, will suddenly become more visible and it will be easier to measure value across the whole system.

To align with the integrated care agenda, the towers must look to obtain deeper value and they are open to suggestions on how this might be achieved. This is good news for medtech companies that can identify whole system advantages for their products, but they will need to facilitate the engagement process among clinicians, finance, system leads and other key stakeholders.

The benefits of the integrated care style of thinking are clearly demonstrated by NHS RightCare, which has defined optimal care pathways across wide-ranging therapy areas. These scenarios powerfully demonstrate the impact of getting the right treatment at the right time – not just in terms of the cost to the NHS, but also the effect on the individual patient, their family and the wider community.

Some medtech companies are already mapping out their own RightCare-style pathways and measuring the cost of optimal care versus sub-optimal care with the help of Wilmington Healthcare’s data, analysis and consulting services. We are also helping medtech companies to understand and harness methodology used by Getting It Right First Time (GIRFT), which is reviewing around 40 surgical and medical specialties in total. GIRFT is a key enabler for the procurement towers and its findings and recommendations on the types of products that should be used have profound implications for the medtech industry.


The NHS procurement system is being redefined and while achieving consistency on pricing is the immediate priority for the new category towers; delivering whole pathway value is their ultimate goal. Consequently, medtech companies need to future-proof their products by understanding and clearly demonstrating how they can save money and add value across the whole care pathway.

Data and analytics are key to proving a product’s worth and now is the time to start using them in line with NHS best practice initiatives, such as NHS RightCare and GIRFT. By working in this way, the medtech industry can play a valuable role in helping tower category owners to define how they can deliver real value-based procurement.