Value Based Procurement

With increasing demand for healthcare set against a backdrop of limited financial resources, there remains ongoing need for procurement to deliver increased year on year savings across the NHS.

To address this challenge, NHS Supply Chain is working on a project designed to consider the potential benefits and practical application of Value Based Procurement (VBP).

Here, there is a shift in emphasis from a reduction in product costs to working with industry to consider technologies that can influence a reduction in total costs within the patient pathway.

VBP will provide an additional methodology that can be adopted by Category Tower Service Providers as a means of driving sustainable increased savings and improving patient outcomes.

We also believe this approach could offer the potential for expanding the scope of influence for procurement and industry working in partnership with NHS stakeholders to meet the needs of the health service in the 21st century.

See our Useful Links ? section for further information on how the project began and for an interview with Brian Mangan, VBP Project Lead.

See our Downloads ▼ section to read the Pilot Project Report and Findings.

What is Value Based Procurement?

At the start of our VBP project, we worked with multiple stakeholders across the healthcare industry to create clear definitions of Value Based Procurement.

VBP:

  • Generates opportunities to release capacity which offers choice for NHS organisations.
  • Is supported by finance and procurement teams in trusts with the view that it should deliver tangible, measurable benefits that make a positive impact on patient care and increase efficiency.

Benefits of Value Based Procurement

Initial NHS Supply Chain pilot tests have indicated potential benefits to the NHS in areas such as:

  • Reducing waste and the number of products used
  • Allowing patients to move from inpatient to day care 
  • Reduction in infection rates
  • Operational productivity.

Overall, VBP will help support the growth and development of NHS finance and is aligned to its strategy.

The NHS finance function will lead the way in developing a system wide understanding of value, that does not just consider cost but takes a much more rounded view of the impact of that expenditure, considering the outcomes achieved for the patient and the system.

NHS Finance, Designing our Future (December 2019)

Working with the NHS

In total, we had 27 submissions as part of our VBP project.

Originally 13 projects were selected to be pilots but due to COVID-19 this was reduced to 10. We took forward 8 pilots which all demonstrated clinical and efficiency benefits.

We have consolidated our findings in a project report. Key findings of the report include:

  • Clinical support and engagement are critical to the adoption of VBP
  • A need for common understanding of value between buyers and suppliers
  • Assurance from suppliers to substantiate claims will aid VBP adoption for NHS trusts.
Martin Shaw, CFO, Guy’s and St Thomas’ NHS Foundation Trust shares his views on Value Based Procurement.

See our Downloads ▼ section to read the full project report. Pilot Trust case studies will be published in Spring and Summer 2021.

Downloads ▼

  • Value Based Procurement Project (VBP) Report and Findings

    Find out more about the results of our VBP Pilot project in our new findings report.