Value-based procurement: all eyes on a new methodology?

Chris Whitehouse, a political consultant and expert on medical technology policy and regulation at Whitehouse Communications, chair of the Urology Trade Association, and governor of the Anscombe Bioethics Centre, looks at the potential effects of value-based procurement. 

Little more than a conversation starter a few months ago, value-based procurement is now one step nearer to making a practical difference to patients and practitioners.

Since I last wrote about value-based procurement back in September, there has been considerable momentum, and I am heartened to see the issue gaining greater exposure across both the government and the health system.

Eight months on from Lord Hunt’s influential written question committing government ministers to the delivery of “value-based procurement” (VBP) across the NHS, and it’s safe to say that the government has not only heeded the call but is also taking major steps toward revolutionising the procurement approach in the health sector.

The DHSC’s MedTech Strategy, launched in February last year, recognises the need for procurement to deliver value for money across the NHS. The strategy acknowledges that “the value of medtech products should not be considered in isolation but across the whole patient pathway” and that “lowest price does not always translate to best value.”

Up until now it was unclear whether those promises would translate into action. At the end of last year, I was invited to attend a meeting with Lord Hunt (a long-standing campaigner and advocate for VBP) and DHSC officials to represent the voice of industry and brief Government on the importance of VBP. This meeting concluded with a commitment from the government to move forward with the concept, marking a significant step toward its proper implementation in NHS purchasing decisions.

The MedTech Directorate, led by its director David Lawson, is imminently to launch a value-based procurement (VBP) methodology. The methodology contains a new approach to VBP that would put patient experience and outcomes at the heart of purchasing decisions, taking fully into account whole system costs. Placing a renewed focus on the patient, it has the potential to deliver a paradigm shift in approaches and attitudes to purchasing, moving away from item price to true value.

This is a most welcome but long overdue step, and it is refreshing to see government truly consider industry concerns. It demonstrates the importance of government-industry engagement to ensure that policies are rooted in practical realities, drawing on the invaluable insights, experiences, and knowledge of those directly involved within the health sector.

The methodology is expected to be shared with key industry stakeholders imminently, with it being promoted to the procurement sector in March. We can then expect a wider soft launch of the toolkit in the Autumn to coincide with other regulations on procurement expected around the same time. The intention would be to make the guidance mandatory from Autumn 2025.

While this development is undoubtedly positive, the challenge now turns to those on the ground, and promoting the new approach to the individuals in charge of making budget purchasing decisions at local level. There is simply not enough understanding or a standardised uptake of VBP, and the lack of a joined-up approach across the system means that the value of whole system costs has been greatly under-appreciated for many years.

The absence of central guidance has hindered the adoption of VBP, with a prevailing focus on unit costs rather than overall value. Addressing this gap in understanding and uptake is essential, and the proposed methodology will deliver a much-needed solution to clarifying the roles and responsibilities of all parties within the health system.

A recent National Audit Office (NAO) report on NHS procurement highlights the ambitious savings target of £1 billion by NHS Supply Chain from January 2022 to 2030. It is imperative for the DHSC and the NHS to collaborate to ensure that these savings consider the entire system and do not compromise patient outcomes for immediate cost reductions.

Integrated Care Systems must place patients at the core of their pathways, and the new methodology provides a roadmap for achieving this. Successful implementation will require a concerted effort from all stakeholders involved, turning the idea of VBP into a concrete reality and fulfilling the commitment to prioritise patients in decision-making processes.