Brian Mangan, formerly of NHS Supply Chain and now CEO of Luach Consulting Group sat down with the Medical Technology Group to discuss the NHS’s new value based procurement guidelines
How did you come to be involved with value based procurement?
NHS Supply Chain said they had a lot of industry coming in to talk about “value”, so we wanted to establish a project to understand what that actually meant. I designed and led that project, based on my international and national experience of the concept.
The aim was to get people on the same page about what “value” actually means. It’s a strange word, value and quality mean different things to different people. The interpretation varies between industry and the NHS, and sometimes there’s a mismatch. You could even argue that sometimes the NHS itself doesn’t quite know what value is.
By 2024, I was engaging with David Lawson at the Department who really understood it. His attitude was very much: “Right, we need to start doing this.” We developed eight case studies – everything from a dedicated transnasal endoscopy service run from an outpatient clinic room to a supplier working with the clinical team to change the surgical technique and therefore reduce the time patients stayed in hospital. That gave us real stories to tell.
With new guidelines, there’s always uncertainty as to how well they’ll be implemented. How can we change the culture in the NHS to support the adoption of value based procurement?
“Value” in its various forms, is mentioned over seventy times in the Ten-Year Plan. Everyone talks about value-based healthcare but the real challenge is outcomes: how to define them, how to measure them, and how to link them to procurement decisions. Above all, it’s about understanding that VBP isn’t about spending more money, but about spending it differently. And to do this we have to look at the whole pathway.
Take a primary knee replacement as an example. If you get 10 percent off the price of a knee joint, you might save £70. But the bigger prize is looking at the total system cost of the pathway.
If a knee replacement procedure costs £5,000, and you can engage with industry to help make the operation more efficient – for example, reducing theatre time by 30 minutes or length of stay by a day – you’re saving money across the whole system. Suddenly you could be saving 10 percent across the pathway, not just on the product. You’ve got a lot of different opportunities to explore the tech that can help you achieve that saving across the pathway.
People will argue that the wards and theatres are still there, and that’s true. But take a broader view: if you’ve got £1 million for 700 operations, by being more efficient you could do 900 operations with the same budget. It’s not about spending more, it’s about using what we have more effectively.
The Darzi Report and the Elective Care Report both talk about the need for change. If you go into a hospital, people are under huge pressure – they can’t do it all on their own. We need to use industry in the right way: equitably, with trust, and through contracts that look at total system cost. Now that we have integrated healthcare partnerships, we’ve got the opportunity to look at the entire pathway – community and acute together. It all links up.
How can medtech suppliers and innovators collaborate with the NHS to embed this understanding of value based procurement?
At present my work is trying to support the industry to articulate what “value” really is. I work with AXREM, the trade association for diagnostic companies, and the Department of Health and Social Care is currently developing pilots, creating guidance, and engaging with industry.
Really you define value through pathway mapping, that is identifying key components and then using a stakeholder scorecard. The idea is to make propositions relevant to all stakeholders in the procurement decision making, not just clinicians, for example Industry often focuses on clinical benefits, but they don’t always articulate the benefits to the operations, finance, or the wider system.
When I work with clients, I use stakeholder scorecards. For example, in orthopaedics you might measure theatre time, length of stay, and reduction in instrumentation. We look at Patient Reported Outcome Measures, with hips and knees a really successful example of how they work effectively.The key thing is not to measure everything, but to measure the things that make a difference. Theatre time, length of stay, and PROMs are a good start in this respect.
What more does the system need to do to embed this and what will success look like over the next five or so years?
Obviously VBP is now part of the Ten Year Plan. The Department has thrown its weight behind it and is talking about integrated healthcare partnerships, multi-year budgets, and incentives to help staff work more efficiently. But above all it’s built upon the reality facing the NHS, we all know there’s increased demand and limited finance. Procurement alone can only go so far, so we have to do something different.
When I met with the Chief Executive of NHS Supply Chain back in 2019, I said, “If we don’t do this, we’ve got to do something.” We’ve reached the point where doing nothing isn’t an option and I think that message is filtering out across the system. Finance teams are on board, clinicians are supportive. But for people outside procurement, there’s still a need to explain what it actually is. Procurement is a strategic function, not just transactional buying.
Even internationally, it hasn’t really been done at scale yet. I think because of the NHS Supply Chain project, what we’ve started to do here is quite unique. There’s nothing else like it at scale anywhere in the world. We’ll see new technologies coming through, but this will be more of an evolution than a revolution. Some technologies have been around for years but were always judged on price. With VBP, we’ll start to see the value they truly bring, even if they cost a little more upfront.
