NHS procurement savings will ‘kick in’ next year

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The NHS’s long-awaited centralised procurement overhaul will start seeing savings in 2019, according to the Health Care Supply Association (HCSA).

Alan Hoskins, chief officer of the HCSA, which represents procurement and supply professionals in the NHS, told SM he expects to start seeing recurring savings when the new Future Operating Model (FOM) comes into effect next March.

His comments follow last week’s performance update from NHS Improvement, which provides financial oversight for the health service, that showed the sector’s end of year deficit year was double its target.

NHS Improvement said the healthcare sector had a budget deficit of £960m at the end of 2017-18, £464m above the target for the year. While most of the overspend was attributed to an unexpectedly large demand for NHS services, it added that many of the savings made were “dependent on non-recurrent items” that did not help the longer term financial sustainability of providers.

Speaking to SM, Hoskins criticised the distinction between recurring and non-recurring as being dependent on how organisations run their budgets, but said he expected the FOM system to see an increase in recurring savings.

FOM is a new structure for centralising the procurement of common goods across different health service trusts and organisations, based around a set of category towers. It was scheduled to replace the existing NHS Supply Chain contract, administered by DHL, in October, but the launch date has been pushed back to March 2019.

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Source: https://www.cips.org/en-GB/supply-management/news/2018/june/nhs-to-see-price-reductions-when-reforms-kick-in/

Author: Francis Churchill in Public sector, Supply chain