Procurement North East Commercial Procurement Collaborative

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Procurement North EastCommercial Procurement
Collaborative

• Chris Shore
• Commercial Director
• CONNECTING TO THE HUB - ROADSHOW
• November 19th 2008
• Falcons Rugby Centre

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Content

• NHS and funding flows
• Collaborative Procurement Hubs
• Procurement North East regional Collaborative
• Future Direction..

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NHS Reforms
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NHS structure and funding flows
Budget for 2008-9 96.4 bn rising to 109.8 bn
in 2010-11
74.2bn (80 of health budget)
Commissioning
NHS expected to deliver 3 cash-releasing
efficiency savings in 2008-9
National Standard Price Tariff (HRGs)
Non-tariff agreements
PLURALITY OF PROVISION
C140 x Trusts
Independent Sector Treatment Centres
Private sector Providers of services
83 X Foundation Trusts (of which 18 are mental
health)
1 of budget Private (10 of elective
procedures)
99 of budget Public
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The changing procurement landscape for management
of NHS non-pay expenditure (17 billion)
Commercial Agency (from 1.10.07?)
2.16 Billion
Commercial Directorate
(including Centre for Evidence-based Purchasing)
NHS Supply Chain
Collaborative Procurement Hubs x 10?
South West CPH
London LPP
1.6 Billion to grow to 3.7 Billion
South East Coast CPH
NHS Yorkshire and The Humber Commercial Procuremen
t Collaborative
To manage all 17 Billion in partnership with
PASA and NHS Supply Chain
Individual Trusts (Procurement Departments)
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CPHs what are they?

• Middle Tier of Procurement
• Strategic responsibility for all non-pay
  expenditure
• Inter-Trust collaborative within an existing SHA
  boundary
• Proactive and innovative in achieving significant
  and sustainable cost improvements through
  developing partnerships
• Provides a vehicle for Cross Government
  Collaboration
• Shares best practice, knowledge and expertise
• Provides an opportunity to support and impact
  positively upon the Health Dividend

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Collaborative Procurement Hubs SHA Boundary
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Procurement North East CPC History

• Over a year ago, we established Procurement North
  East having developed from a series of 3 previous
  confederations.
• Procurement North East (Pro-ne) established 1st
  September 2007.
• 22 stakeholders contribute to Procurement North
  East.

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List of Stakeholders
NHS Trusts/FTs City Hospitals Sunderland NHS
Foundation Trust Northumbria Healthcare NHS
Foundation Trust South Tyneside NHS Foundation
Trust Northumberland, Tyne and Wear NHS Trust
South Tees Hospital NHS Trust Tees, Esk and
Wear Valleys NHS Trust North Tees and Hartlepool
NHS Foundation Trust County Durham and
Darlington NHS Foundation Trust North East
Ambulance Service NHS Trust
PCTs Sunderland Teaching PCT Gateshead PCT
North Tyneside PCT Newcastle PCT South Tyneside
PCT Middlesbrough PCT Redcar and Cleveland PCT
North Tees Teaching PCT Hartlepool PCT
Darlington PCT County Durham PCT Northumberland
Care Trust
SHA North East SHA
Provider Trusts FT 7 PCTs - 12 Ambulance -
1 Mental Health and Care Trusts 2 SHA 1
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Our Vision

• To transform Purchasing and Supply from an
  operational base to a strategic resourcing
  function integrated within the health economy
  leading on
• Understanding patient requirements for
  procurement
• Understanding clinical requirements for
  procurement
• Delivering increasing levels of value for money
• Maximising cost efficiencies
• Developing supply chain logistics to
• Reduce process duplication
• Reduce held inventories
• Reduce working capital requirements
• Promoting race equality, disability equality and
  gender equality in procurement
• Ensuring the application of robust commercial
  practices across the widest spectrum of
  procurement related activity

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Governance

• The Hub is hosted by North Tees Hartlepool NHS
  Foundation Trust.
• Chief Operating Officer reports directly to the
  Trust Chief Executive.
• The Hub reports to the Hub Board
• The Hub Board comprises representatives from
  across the stakeholder spectrum, e.g. Chief
  Executives, Finance Directors from Acute Trusts
  (FT and non-FT), Mental Health/Care Trusts (FT
  and non-FT) and Primary Care Trusts.
• The Ambulance Service, Estates and Pharmacy are
  also represented on the Hub Board.

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The Current Landscape
Department of Health
Commercial Directorate
The Market
PROVIDERS
Darzi
CSR07
Equitable Access
World Class Commissioning
Operating Framework 08/09
INDEPENDENT/ 3rd SECTOR
National
Purchasing and Supply Agency (Pasa)

PBC
POLICY REFORM
Market Management
Regional
Equitable AccessProgramme Office
PERFORMANCE MGMT
Commercial Capability
Local
Commissioning Teams
Equitable AccessPCT Project Team
PCTs
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HUB STRUCTURE
INTERNAL CONTACTS LIST
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Procurement Directorate

• Main focus is to deliver the work plan, which
  will provide value and benefit to the sum of 4
  million during 2008/09 (over a 3 year period,
  13.7 million)
• The Procurement Team is structured into 5
  categories
• Logistics Project Lead Auxilliary Contracts
  Team
• Corporate Services Team
• PCT Commissioning Support Team
• Medical Surgical
• Each team has its own strategy that underpins the
  CSDs vision and that strategy is co-created with
  our stakeholders via our established category
  management groups

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Our key purpose is to deliver value
Financial balance priorities
Cost
Low cost, low quality
Value
Need
High cost, high quality
Quality
Health outcome priorities
Market Forces
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Benefits Wheel
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Strategy should incorporate a benefits led
journey
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Business Partnerships and Development

• Business Partnerships and Development comprises
• Account Management/change agents/procurement
  project Team
• Corporate and Finance
• Business Development Team and Communications
• The directorates role is about
• driving compliance,
• communication, marketing
• business development and opportunities,
• stakeholder relations and engagement,
• partnership opportunity development across
  Government, private sector or other government
  agencies.

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Hub relationship with One Northeast North East
Chamber of Commerce

• Over the past 6 years we, as a confederation,
  have worked with
• Gov Office N.E
• One North East
• North East Chamber of Commerce
• CELS
• And others.
• To date we have had limited success.
• However the new structure will facilitate better
  results
• Andrew Sugden, NECC, will have more detail

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Looking to the future

• There are significant opportunities as a regional
  collaborative to identify and drive commercial
  solutions that will not only benefit the
  stakeholders in delivering value but will also
  incorporate strategies such as sustainability,
  innovation, health economy objectives, economic
  growth, e.g..
• Our PHC Team is looking to identify new local
  entrants into the market who can supply the NHS
  supporting regional/local growth
• Our Estates Facilities Team are investigating
  new ways of working in respect of MES, and how we
  can support Directors of Estates agenda in
  reducing carbon emissions
• Following the launch of Research Innovation
  Alliance for Health (RIAH), the CSD and the
  Clinical team are actively involved in working
  with academia to identify innovative solutions,
  goods, services that will benefit the NHS. We
  have also committed resources to a number of
  sub-groups that have fallen from the initial RIAH
  launch.
• A further proposal is with RTC that identifies
  how NHS regional procurement can a positive
  impact on the regions economic growth

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The Commercial Solution the vision of the future
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Final Thought
We cant solve problems by using the same kind
of thinking we used when we created them! A.
Einstein