The role of the NHS Purchasing and Supply Agency

1
The role of the NHS Purchasing and Supply Agency

• Neil Argyle
• Associate Director of Purchasing
• Policy and Performance
• 5 December 2001
• Neil.Argyle_at_doh.gsi.gov.uk

2
Agenda

• background to the Agency
• the NHS Plan
• Agencys Corporate Plan
• what does it mean for suppliers?

3
Background NHS Supplies

• NHS Supplies formed 1992
• born out of NAO criticisms wasted purchasing
  muscle
• part of NHS special health authority
• 3 national operating divisions
• Purchasing
• Wholesaling
• Customer services
• all income derived from customers

4
NHS Supplies scale of operation March 2000

• 4,500 national / sub-national contracts with
  1,400 suppliers
• 2.5 billion influenced spend (total NHS non pay
  expenditure 2001/2 11 billion)
• 12 warehouses
• 18,000 stock lines
• 42 million average total stockholding
• 530 million per annum stores sales
• NHS Supplies expired 31 March 2000

5
Historical view of purchasing and supply in NHS

• focus on non-pay spend in secondary health care
• historical functional role
• contracting and distribution
• process driven and low profile
• expertise in operational activities
• price focused
• unclear priorities and strategies across NHS
• fragmented, variable practice
• NOT STRATEGIC

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Cabinet Office - Procurement Review 1998

• Overall principles
• working in partnership
• instituting best practice
• organisational change
• Procurement savings of at least 3 per cent per
  annum achievable

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Trusts

• appoint board member with specific responsibility
  for procurement
• take responsibility for local procurement staff
• produce a written procurement strategy
• implement electronic information management system

8

• wholesaler to logistics provider
• manage the supply chain
• increase influence 500 million 1,500
  million
• review potential for private finance

manufacturers and importers
NHS Hospitals Clinics Community GP surgeries etc
Wholesalers and Distributors
NHS Logistics Authority
9
NHS Purchasing and Supply Agency

• works on behalf of the NHS
• executive agency of the Department of Health
• Chief Executive reports via NHS Operations
  Director to Health Minister
• Ministerial Advisory Board
• centrally funded
• framework agreement with Department of Health

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The Agencys objectives Framework Agreement
with DoH

• deliver a cost-effective supply chain
• ensure strategies reflected in ministers
  policies and priorities for the NHS
• establish overall framework for performance
  management of procurement in the NHS
• determine/control the appropriate level at which
  procurement decisions are made
• improve efficiency and effectiveness of NHS
  procurement and supply chain
• improve skills, expertise and professionalism of
  NHS procurement staff
• increase NHS boards awareness of procurement
  issues

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The NHS Plan
www.nhs.uk/nationalplan/nhsplan.htm

• A plan for investment with sustained increases in
  funding . . . . . .
• NHS to grow 50 in cash terms, 33 in real terms
  in 5 years
• 7000 extra beds in hospitals and intermediate
  care
• over 100 new hospitals by 2010 and 500 one-stop
  primary care centres
• over 3000 GP premises modernised and 250 scanners
• clean wards and better hospital food overseen by
  modern matrons
• modern IT systems in every hospital and GP
  surgery
• 7500 more consultants 2,000 more GPs 20,000
  extra nurses 6,500 extra therapists

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NHS Plan the reform agenda

• services to be redesigned around the needs of
  patients
• a new system of earned autonomy with 500
  million performance fund
• Modernisation Agency
• national standards matched by regular inspection
  (CHI)
• increased capacity for NICE
• NHS and social services to come together new
  Care Trusts
• role changes e.g. nurses able to supply some
  medicines
• patient input at all levels
• concordat with private sector

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NHS Plan direct improvement to patients

• patients to have GP appointment within 48 hours
• end of long waits in accident emergency
• maximum waiting time for an outpatients
  appointment will be three months, and six months
  for inpatients
• big expansion in cancer screening programme
• end to postcode lottery
• rapid access chest pain clinics
• improving the patient environment

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NHS Plan investmentin equipment

• 50 new MRI scanners
• 200 new CT scanners
• 80 new liquid cytology units
• 45 new linear accelerators
• 3000 new automated defibrillators in public
  places
• 450 new and replacement haemodialysis stations
• extension of patientline (bedside TVs and
  phones)
• 250 million in new IT to underpin NHS
  Information Strategy

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NHS Plan task forcesthe priorities

• improving access
• cancer
• CHD
• capital and capacity
• children
• inequalities and public health

• mental health
• older people
• quality
• workforce
• performance

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Shifting the balance of power
http//www.doh.gov.uk/shiftingthebalance/index.htm

• more responsibility to front line staff
• national standards/local delivery
• structural changes Health Authorities, Regional
  Offices

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Agencys Corporate Plan 2001-2004 (1)
www.pasa.doh.gov.uk/publications/

• Agency will have made significant contribution to
  NHS Plan
• Agency will have led on NHS procurement
  objectives flowing from wider government agenda
• Agency established and recognised as centre of
  expertise
• all non-pay NHS expenditure will be subject to
  best procurement practice
• Agency will be influencing 80 on non-pay NHS
  expenditure
• at least 30 (3.7bn) will be purchased from
  Agency contracts
• there will be full NHS commitment to Agencys
  contracts

continued..
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Agencys Corporate Plan 2001-2004 (2)

• the NHS will be trading electronically
• the NHS will be using an integrated supply chain
  for at least 1.5bn of its expenditure
• organisational structures will be in place across
  the NHS that will eliminate fragmentation and
  deliver efficiency
• all staff involved in procurement issues will
  have the required professionalism, skills and
  competencies
• all procurement activity will be subjected to
  performance management to include demonstration
  of best VFM and will be regularly part of Trust
  Board agendas

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What do the changes mean for suppliers?

• procurement firmly on the agenda, at both
  national and local level
• more inclusive NHS procurement - joined up
  purchasing and supply
• opportunity for nurturing innovation
• emphasis on value, not just price
• a once only approach where appropriate
• modern systems
• A STRATEGIC APPROACH