Joining up the procurement of goods with the commissioning of services

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A lack of synergy between the procurement of goods with the commissioning of services creates inefficiencies in the system but an integrated approach could resolve these issues, writes Alan Turrell

The potential end of the purchaser provider split with the introduction of sustainability and transformation partnerships, new models of care and accountable care services on the one hand combined with the Carter efficiencies and the Future Operating Model for Procurement on the other, will provide a much needed opportunity for a more joined up approach to the procurement of goods and the commissioning of services.

Currently, purchasing of goods and general services by trusts and the commissioning and procurement of services by clinical commissioning groups are governed by two separate policy regimes and are conducted by separate sets of professionals. This lack of coordination potentially leads to inefficiencies and ineffective service to patients.

As illustrated at the recent Nursing Times / HSJ Round Table on wound care, the goods purchased and the services commissioned are very much intertwined with the level of synergy between the two impacting on the clinical service and not least the outcomes for patients.

Benefits of consolidation

A more integrated approach should enable some of the key issues within the current system to be effectively addressed:

Firstly, as recognised by the Carter Report data, accurate identification of the full costs and outcomes of the existing service is often lacking or is incomplete. This includes insufficient understanding of the levels of activity, product volumes purchased, value of stock held, actual usage of product, the level of wastage and obsolete stock and the lack of measurement of patient outcomes.

This severely hampers intelligent analysis of current service provision and meaningful comparison with alternative modes of provision which may deliver efficiencies and improvements in services.

Transparency regarding the degree of influence exerted by product providers also forms part of this analysis. Areas such as tissue viability and stomacare. are often associated with a range of “added value” services, including sponsorship of nurses and “free” stock, offered by providers.


Accurate identification of the_ full costs and outcomes of t existing service is often lacking or is incomplete


Notwithstanding the obvious potential conflict of interest and undue influence on the choice of product used, this is troublesome because the true cost of providing the overall service may be obscured, and therefore, makes it difficult to compare different approaches to service provision.

Secondly, the practice of products such as dressings and stomacare products being initially provided to a patient in hospital (paid by the trust) and subsequently provided through FP10 (paid by commissioners) also raises a myriad of issues: has the most appropriate product been specified; how often are products used and reviewed; who monitors and controls the level of stock held in patient homes; and is FP10 the most cost effective way of purchasing the product?


More significant efficiencies can often be achieved through improved demand management and operational practice


At the Wound Care Round Table, it was made clear that some commissioners are reverting to more direct supply routes, such as through NHS Supply Chain, which provides a lower product cost. However, with the onus of responsibility for storage and transportation of product being transferred to community providers and their staff, is this a true saving?

The providers view here is that a significant increase in this practice will have a destabilising impact on the market with the potential to, amongst other things, significantly increase prices charged to hospitals.

However, this is not just a matter of reducing product cost or the overall cost of supply. More significant efficiencies can often be achieved through improved demand management and operational practice including: whether there is a need for the product at all is there a more effective product even though the initial product cost may be more; is the product being used appropriately ;and are staff sufficiently trained to use it effectively and efficiently?

Addressing these issues currently often fall between the focus of providers and commissioners.


The “right” approach is likely to be determined by local circumstances


Thirdly, the increasing diversity of service provision also increases the level of complexity. On the one hand, for some services such as wound care, specialist centres are being established purely concentrating on the specific specialty whilst, on the other hand,” one stop shop” community based services, as associated, for example, with multispecialty community providers, are offering integrated services but perhaps with less specialist clinical input.

The “right” approach is likely to be determined by local circumstances but in all cases a joined up multidisciplinary approach involving clinicians, nurse specialists, finance staff, and procurement specialists irrespective of whether they are aligned to “providers” or “commissioners” is needed. A key consideration here will be ensuring that the product supply arrangements support the optimum service provision.

Some good work on these issues is already taking place in some forward looking localities and nationally through the work of the NHS Clinical Evaluation Team.

However, the union of commissioners and providers within STPs and through the creation of accountable care systems and other new models of care together with a focus of the new “category towers” (being created as part of the Future Operating Model for Procurement) on the impact of procurement decisions on clinical services, provide an excellent opportunity to facilitate a more joined up approach to address these issues.

Meaningful liaison between those specifying the form of service to be provided and those selecting the products to be used could, within the new structures, develop and deliver more efficient, effective and joined up “whole care” solutions resulting in improved patient services and outcomes.


Author: Alan Turrell FCIPS,  writing in the HSJ
Date: 20 July 2017


Alan worked in the NHS for 36 years in senior management positions with providers and commissioners in procurement, contracting and strategic commissioning and is now operating his own management consultancy, Commissioning and Procurement Solutions Limited. He is a Fellow of the Chartered Institute of Procurement and Supply.