procurement transformation programme -...

Procurement Transformation Programme

The Future Operating Model

September 2017 DH – Leading the nation’s health and care

Procurement Transformation Programme and the Innovators’ Journey

19 Sep 2017

Partners




We support the NHS to find digital solutionsto solve problems relating to the delivery of care

We build the capability of innovatorsto navigate the NHS and innovation pathway, in order to gain market access

We build London’s digital health ecosystemto speed up the adoption and commission of digital innovations

We build the capability of health and care staffto support and lead digital health enabled transformation in the NHS




Support for Industry:

ü Masterclasses

ü 1-1 Innovation Clinics

ü Pitching support

ü Resources and opportunities

ü Notice of funding, news and events from across London

ü Bespoke consulting services




09.30– 10.00 Refreshments&registration

10.00– 10.05 WelcomefromDigitalHealth.London Yinka Makinde,ProgrammeDirector

10.05– 10.10 WelcomefromCocoonNetworks Yating Yuan,MarketingManager

10.10– 10.45 IntroductiontotheProcurementTransformationProgramme

(20minutepresentation+15minsQ&A)

MariellaChilde,SupplierRelationshipandEngagementManager–DepartmentofHealth

10.45– 11.20 TheInnovatorsJourney&theNHS

(20minutepresentation+15minuteQ&A)

ChristopherSchonewaldCommercialPolicyAdviser–DepartmentofHealth

11.20– 11.30 Round-upandfeedback MattRigby, ProjectManagerDigitalHealth.London

11.30– 12.30 Networkingand1-1s

Today’s agenda

14 DH – Leading the nation’s health and care

The Big Picture

1955-6 Health (11.2%)

Other publicservices budget

2015-6 Health (29.7%)

Other publicServicesbudget

• NHS spending rising as percentage of public spend

• Aging population and increasing healthcare costs fuelling increase• Significant public/media/political concern over ‘spiralling’ NHS

15

£5.7bn spend across the NHS on goods in 4 key areas:

- Everyday Hospital Consumables - Common Goods- High Value Healthcare Consumables - Capital Equipment

DH – Leading the nation’s health and care

Context – Macro Numbers

Goods £5.7 BNon

Influence£8.2 BPharma

£6.0 B

Goods & Services

£9.0 B

Only £2.2bn goes through NHS Supply Chain today (£1.5bn goods

and £0.7bn capital equipment)

16

The Current NHS Procurement Landscape

40%40%

20%

Hubs (7)NHS Supply ChainTrust Procurement Teams (200+)


• Complex, fragmented landscape with “internal” competition for the range of products

• Widespread duplication of effort with procurement expertise spread across the system

• Disaggregation of demand

• 7,000 of 320,000+ (2%) SKUs represent 80% of total supply chain consumables spend (£1.2bn)*

*All figures valid for the last 12 months*Total consumables spend £1.5bn


T O

D A

YT

O M

O R

R O

W

20% 40% 40%

10% 85% 5%

NHS Supply Chain

Future Operating Model – Category Towers

Trust Procurement Teams

PublicHub

PublicHub

PublicHub

PrivateHub

PublicHub

PrivateHub

PublicHub

CT 5

CT 11

CT 7CT 8

CT 9

CT10CT 6

CT 2

*Indicative breakdown following procurement exercisesTrust Procurement Teams

G G G

GG

CT 1CT 3

CT 4G

G

G

G

G

G

G

C1C2

C3C4C5 C6C7

C8C9

C10C11 GC1

C2C3

C4C5

C6 C7 C8C9C10

C1C2C3

C4C5

C6 C7 C8C9C10

GC1C2

C3

C5 C6 C7C8C9

C1

C3C4

C5C6 C7 C8

C9C10

C2C3

C4C6 C7

C8C9

C1

C10 C3C4

C5C6 C7

C8

C10C2 GC1

C2C3

C4C5

C6 C7 C8C9C10

GC1C2C3

C4C5

C6 C7 C8C9C10

GC1C2

C3

C5 C6 C7C8C9

GC1

C2

C3

C4C5 C6

C7

C8

C9

C11C10

GC1

C2

C3

C4C5 C6

C7

C8

C9

C11C10

Current and future landscape

Hubs not involved in Category Towers

18

This model envisages disaggregating the service into 5 functional components:

The body that contract manages the delivery of functions and

manages the governance and customer boards. It will have

~200 staff

It also undertakes the customer service and relationship

management function, ensuring that customers have a clear

route of communication into a more disaggregated landscape.

One organisation is currently in charge of the procurement / category management of all

items. We envisage a new model where separate specialist

organisations focus on mutually exclusive category groupings.

All of these functions require integrated IT platforms in order to work seamlessly.

A similar concept to the service provided today, with

a greater focus on continuous improvements.

This is all seamless from a client perspective, with items purchased through a NHS Catalogue

IntelligentClientCoordinator

LogisticsProvider

ProcurementCategoryTowers

SupportingTechnologyInfrastructure

TransactionalServices

One organisation providing accounts payable, accounts

receivable and management of invoice queries.

Ensures the delivery of consolidated invoicing to users

Future Operating Model



Category Tower Composition

Non Medical

Tower 11NHS Hotel Services

Tower 4Orthopaedics,

Trauma & Spine, Ophthalmology

Medical

Tower 3Infection Control And Wound Care

Tower 5Rehabilitation,

Disable Services, Women’s Health

& Associated Consumables

Tower 2Sterile

Intervention Equipment And

Associated Consumables

Tower 10Food

Tower 9Office Environment

Capital

Tower 7Large Diagnostic Capital Devices incl. Mobile & Consumables

Tower 8Diagnostic

Equipment and Associated

Consumables

Tower 1Ward Based

Consumables

Tower 6Cardio-Vascular,

Radiology, Audiology & Pain

Management

20

Opportunities for Suppliers

• Reduced sales and marketing costs.

• Clinical expertise will be embedded into the towers.

• There is a clear route for innovation.

• Commitment deals will make it easier for suppliers to plan their business and outputs, and to reduce internal costs. This also means more certainty and predictable cash flow.

• Category Tower managers will be incentivised on reducing total cost in the system, not on reducing unit cost.

• Reduced burden of participating in procurement exercises, as the number of buyers is reduced.


21

Why might suppliers feel threatened?

• Entry points into the system will be reduced, reducing opportunities for targeting sales into Trusts.

• Product lines will be rationalised, resulting in some products being de-listed.

• Commitment deals mean that continuous opportunities to win business will be reduced.

• Clinical expertise embedded in towers may be focussed differently from a supplier’s USP. Suppliers may need to reconsider product specifications to meet the NHS specification.


22

Clinical Evaluation Team


Their reports so far can be read at: http://www.nhsbsa.nhs.uk/CommercialServices/5651.aspx

The full work plan is available at: http://www.nhsbsa.nhs.uk/Documents/CommercialServices/CET_work_plan_2016_-_2018_(V1)_12.2016.pdf

23

2016 2017 2018

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC


Category Tower Timelines

Cat Towers #1Medical

Cat Towers #2Capital & Non

Medical

Contract AwardGo-Live

OJEU

Office Supplies CCS

Selection PhaseInvitation To Tender

Evaluation & Approvals

24

2016 2017 2018

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC


Other Workstreams

Supporting Technology

Transactional Services

Logistics

Contract Award

Go-Live

OJEU

25

Contact:

Paul Webster:[email protected] 972 2314

Laurence Hodgson:[email protected] 972 1247


The Innovators Journey

Procurement and the NHS


27

Invention Evaluation Adoption


Introduction

• Health System has complex innovation landscape.• Three stage process, with different bodies addressing different parts of

the process:

• DH Commercial Directorate’s focus has been on transition from evaluation to adoption.

• Today I want to talk to you about the common form of meetings we have with suppliers…

28

• Are you addressing a particular condition e.g. diabetes?

• Which part of the health system are you addressing?

• How are you addressing the problem e.g. new technology or software?


Question 1 – What is the problem you are trying to solve?

29

Question 2 – How big is the problem?


How many patients are being affected by the

problem?

£How much waste of

resource or money is occurring?

?Are there other problems e.g.

employee safety?

30

Question 3 – What is the current solution we are using?Question 4 – Why is your solution better and innovative?


• What is the solution currently in use:• What is the patient experience of this including safety record and side effects? • What are the connected costs – in buying the solution and other effects (less

time in hospital)?

Create a detailed comparison of your solution vs. the status quo

31

Patient Benefits


Clinical• Direct patient benefits• Less side effects• Lower recovery time • Lower risk of infection

Non-Clinical• Outpatient procedure• Less time in hospital• Follow-up by phone or at GP

Surgery

32

Economic Benefits


Clinical• Cost of the product• Cost of consumables• Faster – uses less of a

clinicians time• Lower risk of infection/side

effects – lower costs on future treatment

Non-Clinical• Less time in hospital/no

overnight stay• Follow-up by phone or at GP

Surgery saves time/cost

Can these benefits be easily articulated and shown?Do you have a Medtech Innovation Briefing (MIB) for the technology?

33

Question 5 – Who are you working with and who agrees with you?


The following individuals will give weight to your product:

• Clinical advocates• NHS Trust Administrators • NHS Trusts• Institutes or Royal Colleges• Academic Centres e.g. Universities.• Academic Health Science Networks (AHSNs)

34

Question 6 – Do you have all the necessary accreditation?


Check relevant NICE guidance to make sure your product has the right accreditation, examples include:

1. CE demarcation;2. If it’s digital – do you understand the cyber security requirements;3. Are your ISOs all in order; and4. Have you spoken to NICE and MHRA.

35

Question 7 – Are you connected into the right places?


• National Institute for Health Research (NIHR) (Biomedical Research Centres (BRCs) and others)

Invention

• NIHR (BRCs and Diagnostics Evidence Co-operatives (DECs))

• Academic Health Science Networks (AHSNs)• National Institute for Health and Care Excellence

(NICE) – publish guidance for products.

Evaluation

• NIHR – DECs and Collaborations for Leadership in Applied Health Research and Care

• NHS England – Innovation Technology Tariff• AHSNs

Adoption

36

Question 8 – What are your specific challenges?

• If you have answered questions 1-7 then try and identify your unique issue.

• This will potentially be a technical point to do with:• pricing;• procurement; or• prescription.


37

Next Steps


• Digital technology – check G-Cloud;• Talk to the Department of Health and NHS England;• The Future Operating Model.

38

Some of organisations involved in innovation


• NHS England• NHS Innovation• National Institute for Health Research (NIHR)• National Institute for Health and Care Excellence (NICE)• Medical Research Council (MRC)• Department of Health

39

Contact:

Joel Glover – Head of Growth and Market [email protected]

Robert Oldham – Commercial Policy [email protected]





Upcoming Masterclasses:

ü Interoperability and APIs

ü Digital health safety

ü Getting accelerator ready

ü The GDPR

ü Getting onto the NHS Apps Library

ü Pitching skills

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